BOB Capital Markets has initiated coverage on LG Electronics India with a ‘Buy’ rating and a target price of ₹1,980 per share, implying an upside potential of around 20%. The brokerage has valued the company at 50 times the September 2028 estimated earnings per share (EPS).
According to BOB Capital Markets, LG Electronics India’s nearly three-decade presence in the country has helped it establish a strong position across key consumer appliance categories, including inverter air conditioners, automatic washing machines, refrigerators and televisions.
The brokerage expects LG’s market leadership to remain intact over the next three years, supported by strong brand recall, premiumisation, an expanding distribution network and a steady pipeline of new products across premium as well as value segments.
LG’s deeper reach into smaller markets and continued product launches are also expected to help the company outperform overall industry growth, the brokerage said.
Backward integration, localisation to support margins
BOB Capital Markets expects increasing localisation and backward integration to provide structural support to LG Electronics India’s margins.
The brokerage highlighted the company’s manufacturing scale and upcoming Sri City facility, which could enable deeper in-house production of key components such as compressors. This is expected to improve control over input costs and provide some cushion against higher copper and aluminium prices and currency volatility.
The brokerage also expects greater localisation to position LG favourably as quality control order (QCO) norms become more stringent.
Exports, B2B to reduce seasonal dependence
While domestic sales of products such as air conditioners and refrigerators remain seasonal, BOB Capital Markets expects exports and B2B businesses to provide additional growth engines.
LG’s manufacturing facilities in Sri City, Noida and Pune are expected to support the parent company’s “Global South” strategy and increase the contribution from exports.
On the B2B side, the company is expanding its Information Display and HVAC businesses, including VRF and cassette AC systems. Its annual maintenance contract (AMC) business also provides exposure to relatively higher-margin revenue streams.
Together, exports and B2B are expected to create a more diversified revenue mix and reduce the company’s dependence on seasonal domestic demand.
Revenue, EBITDA and PAT CAGR estimates
BOB Capital Markets estimates LG Electronics India’s revenue, EBITDA and PAT to grow at compound annual growth rates (CAGR) of 13%, 23% and 20%, respectively, over FY26–FY29E.
The brokerage expects this growth to be driven by rising demand for consumer appliances in India, excluding mobile phones, along with LG’s ability to gain market share through new product launches, stronger distribution and its established brand franchise.
Why BOB Capital Markets is bullish on LG Electronics India
The brokerage’s investment thesis rests on three key factors:
Strong market leadership and brand recall across major consumer appliance categories.
Higher localisation and backward integration, particularly in components such as compressors, supporting margin expansion.
Exports and B2B expansion, which could diversify revenue and reduce domestic seasonality.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
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