Lenskart, Meesho among top picks as value retail leads India's consumption story: Siddhartha Khemka

Organised retail is heading into the festive season at two speeds. Value-focused formats are growing comfortably ahead of the pack, while premium and traditional categories depend more on stock availability, store location and execution.

Store visits and conversations with sales staff and managers in Nashik in early October, spanning value fashion, department stores, branded apparel, footwear and eyewear, offer a ground-level read.

Demand was healthy in July and improved in August on end-of-season sales and early festive buying. It then softened in September and October as the festive calendar shifted and the Pitrupaksha period kept shoppers away.


Retailers expect traction to pick up from mid-October, with the bulk of festive spending in early November, when salaries are credited. They remain cautious. Regional checks may also not extrapolate nationally.

Value fashion is the clear leader, with double-digit like-for-like growth at select stores and high single digits at others. Beauty is a major draw, featuring in 30-40% of bills at some formats and causing frequent stock-outs, while kidswear contributes about 35% of sales at one chain.

Eyewear is the standout, with top stores growing 20-25% on a like-for-like basis. Free lens replacement brings customers back, and cannibalisation from expansion has been limited.

The drags are mostly operational. Some premium apparel brands are held back by warehouse delays and by franchisee-run stores struggling to source merchandise.

Footwear is mixed, with mall stores doing better than high-street outlets. In college-heavy catchments, strong walk-ins do not convert into purchases at the same rate.

Drought and water shortages in nearby villages are the key downside risk to rural incomes and discretionary spending.

Growth is increasingly coming from value formats, even inside department stores, where freshness and beauty are pulling in footfalls. Inventory and location now explain performance as much as demand does.

Company-owned stores are outperforming franchisee-run ones, and malls are beating high streets. Catchment matters: newer retail corridors may take one to one-and-a-half years to reach optimal footfalls.

Over FY26-29, sales in value retail are seen compounding at about 22%, against roughly 13% for traditional retailers and 10% for footwear. Profit growth over the same period is seen at about 29%, 24% and 16% respectively.

The edge appears to lie with businesses that combine store-level traction with sound inventory management. Near-term upside will hinge on how well festive demand converts, with rural purchasing power the key variable to watch.

Lenskart TP: INR 800

Lenskart’s vertically integrated manufacturing, automated production, omnichannel presence and house-of-brands strategy provide a differentiated competitive advantage in an underpenetrated eyewear market.

Strong unit economics, with sub-10-month store payback and over 33% store EBITDA margins, support expansion toward approximately 4,500 India stores by FY29.

International profitability is improving despite higher marketing expenditure, while operating leverage should drive further margin expansion. We estimate revenue, EBITDA and PAT CAGRs of 27%, 46% and 59%, respectively, over FY26–29E.

Meesho TP: INR 240

Meesho operates a multi-sided e-commerce marketplace connecting consumers, sellers, logistics providers and content creators through a self-reinforcing ecosystem. Its asset-light model, supported by zero seller commissions, low-cost logistics and negative working capital, has enabled it to scale to 274m annual transacting users and over 2.8b last twelve months placed orders while delivering industry-leading unit economics.

It has built a strong value-commerce franchise catering to Bharat through a wide seller base, vernacular shopping experience and technology-led platform.

Its logistics network (Valmo), content commerce, artificial intelligence-driven capabilities and expanding monetization through advertising, Meesho Mall and financial services are expected to strengthen platform engagement, improve seller productivity and support long-term scalability.

We expect Meesho to deliver a 25% CAGR in marketplace Net Merchandise Value over FY26–31, driven by customer acquisition and rising platform adoption.

Higher advertising monetization, normalization in logistics spreads and operating leverage are expected to expand contribution margin to ~7.5% and drive adjusted EBITDA to ~₹48b by FY31.

(The author is Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd)

(Disclaimer: The reporter was invited to the event. Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)