It’s been over one year since LG Electronics made its bumper debut in the Indian markets. The share price of LG Electronics India has appreciated nearly 8% in the last 1 year. Most brokerages see 11% to 20% upside for the stock after the Q2 results. They see exports as a key driver and are betting big on the Sri City expansion for the company.
Here is a detailed insight into the investment rationale driving the price target call given by three key brokerage houses after the Q2 results announcement –
Jefferies has Buy rating on LG Electronics India with a target price of Rs 1,950 per share. This implies nearly 15% upside from current levels. They believe that the company “is managing volatility (currency, commodity) via localisation, calibrated price hikes and operational efficiency.” and consider “exports a key driver.”
Additionally, Jefferies highlighted that “industry sentiment is positive heading into peak season. Sri City plant likely to start operations in Q3FY27 with compressor manufacturing. They sees “strong festive and wedding season positioning, with GTM promotion invested in Q2 can aid channel readiness in key markets.”
The global investment bank pointed how LG Electronics “expanded TV line-up,” including mini LED TVs along with large-screen, QNED & OLED range and “energy-efficient ACs are contributing to growth.”
Motilal Oswal has a Buy on LG Electronics India as well. They have set a target price of Rs 2,100 per share for the LG share price implying over 20% upside from current levels. The company reported strong revenue growth and healthy margins and has a “diversified product portfolio, strong brand franchise, multiple avenues for sustainable revenue growth and a better margin profile than peers,” Motilal Oswal added.
According to them, the “company is well-positioned to benefit from structural premiumisation across TVs, refrigerators, washing machines and ACs, while the expanding LG Essential portfolio provides an additional growth driver by broadening its addressable market.”
The brokerage house estimates “cumulative capex of Rs 4,300 crore over FY27-FY29, mainly for the Sri City expansion.” As per their estimates, the cumulative FCF during FY27-29 is estimated at Rs 3,950 crore.”
Axis Direct has a Buy rating on LG Electronics India with a target price of Rs 1,965 per share. This implies an upside of nearly 11% from current levels. The brokerage house believes that the premiumisation and expanding exports provide a long growth runway. They believe that the “company is well positioned to benefit from rising disposable incomes, low household appliance penetration and increasing consumer preference for premium products.”
Premium refrigerators, fully automatic washing machines, larger-screen televisions and dishwashers are seeing strong demand. They pointed out that the “LG Essential Series is also gaining traction by targeting first-time buyers and affordability-conscious consumers while contributing positively to profitability.”
Additionally, LG Electronics has expanded its export presence from 50 to 68 countries, with distribution partners increasing from 112 to 151. “The combination of premiumisation, first-time household penetration and export expansion provides multiple avenues for sustained revenue growth,” they added.
Key brokerages have retained their ‘Buy’ rating on LG Electronics. Though most have a positive sector view, most see demand slowdown, delay in Sri City plant execution and the loss of market share are some of the key risks that investors must watch out for.
Raw material price and rupee volatility are the other risk elements that brokerages see as a potential concern areas that could derail the upside in the stock going forward.