Shares of LG Electronics India Ltd (LGEL) have seen a significant climb, reaching Rs 1,542.40 in recent trading, marking a 35.30 percent increase from its initial public offering (IPO) price of Rs 1,140 in mid-October last year. This surge comes despite the company reporting a softer-than-expected performance in the March 2026 quarter (Q4 FY26).
Several leading brokerages, however, have retained a positive outlook on LGEL's stock, projecting further upside. Their optimism stems from the company's long-term growth visibility, anticipated margin recovery, and strategic capacity expansion plans.
Q4 FY26 Performance Overview
For Q4 FY26, LGEL reported consolidated revenue of Rs 8,050 crore, an 8 percent year-on-year increase, largely meeting market estimates. However, the company's profitability faced pressure. Adjusted EBITDA margin stood at 11.7 percent, falling short of brokerage and consensus estimates (13 percent/12.3 percent), leading to an EBITDA of Rs 950 crore, a 10 percent decline year-on-year. Adjusted Profit After Tax (APAT) also saw an 8 percent year-on-year decrease.
Brokerages Maintain Bullish Stance
Despite the muted quarterly results, financial analysts are largely constructive on LGEL's future:
- Nomura: While trimming its target price slightly to Rs 1,763 (from Rs 1,836) due to the decline in EBITDA and profit, Nomura maintained its "Buy" rating. The brokerage highlighted LGEL's attractive valuation at approximately 35x FY28F EPS, forecasting a 32 percent EPS CAGR over FY26-28F, with potential gains from a stronger recovery in export markets.
- Motilal Oswal Financial Services Ltd (MOFSL): MOFSL noted that Q4 earnings were below expectations, primarily due to weaker margins across both the home appliances & air solution (H&A) and home entertainment (HE) segments. However, the firm expects margins to normalize and reiterated a "Buy" rating with a target price of Rs 1,750, valuing LGEL at 45x FY28E EPS.
- JM Financial: The brokerage emphasized LG Electronics' ongoing expansion initiatives, particularly the Sri City capacity expansion, with compressor manufacturing expected by Q3 FY27E. JM Financial maintained its "Buy" rating and a target price of Rs 1,730 based on 45x Mar'28E EPS.
- Nuvama Institutional Equities: Nuvama slightly lowered its FY27/28E EPS estimates by 4 percent/3 percent to account for margin headwinds. Nevertheless, it maintained a "Buy" recommendation with a Mar-27E target price of Rs 1,820, based on 48x Mar-28E EPS.
- Elara Capital: Describing the quarter as subdued but the FY27 outlook as positive, Elara Capital reiterated its "Accumulate" rating with a target price of Rs 1,750. The brokerage cited LGEL's healthy growth outlook, industry-leading margin and return ratios, robust export potential, and a substantial Rs 5,000 crore capex plan that will boost FY28 revenue visibility.
The consensus among brokerages points towards a belief in LGEL's underlying fundamentals and future growth drivers, despite recent profit pressures.