Motilal Oswal Financial Services Ltd (MOFSL) has affirmed its 'Buy' rating on LG Electronics India Ltd, projecting a significant 22% potential upside for the company's stock. The domestic brokerage firm has set a target price of Rs 2,080 per share, citing a robust strategy centered on diversification, premiumization, and manufacturing expansion.
Driving Growth Through Diversification and Premiumization
MOFSL's optimistic outlook for LG Electronics India stems from anticipated healthy growth across its core businesses, including televisions, washing machines, and air conditioners. The company's focus on premium product offerings, coupled with new product launches and a broader range of Stock Keeping Units (SKUs), is expected to fuel revenue expansion. Notably, LG Electronics India announced a 5-6% price increase for air conditioners effective October 1, 2026, while prices for other product categories are projected to remain largely stable.
Strategic Manufacturing and Market Expansion
In a move to strengthen its operational capabilities, LG Electronics India is actively expanding its manufacturing footprint. Plans are underway to boost compressor capacity at its Sri City facility, with compressor manufacturing anticipated to commence in the third quarter of fiscal year 2027. On the export front, MOFSL highlights the company's successful expansion into over 60 countries, forecasting approximately 30% year-over-year growth in export revenue. Furthermore, the business-to-business (B2B) segment is poised for increased contribution, with estimates suggesting it could grow from around 8% to approximately 10% of total revenue.
Positive Financial Outlook and Valuation
The brokerage firm anticipates strong financial performance for LG Electronics India in the coming years. Over the FY26-FY29 period, revenue, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), and PAT (Profit After Tax) are projected to achieve Compound Annual Growth Rates (CAGR) of approximately 14%, 24%, and 25%, respectively. MOFSL also expects mid-teens revenue growth in the medium term, supported by sustained demand across its product categories, alongside a margin expansion of 70 to 130 basis points in FY28-29.
As of October 1, 2026, LG Electronics India shares were trading at Rs 1,734.15, marking a 0.78% increase. The stock opened at Rs 1,720, slightly above its previous close of Rs 1,720.80, and observed intraday highs and lows of Rs 1,743.55 and Rs 1,704, respectively. MOFSL's valuation of the stock is based on 45 times its September 2028 estimated EPS, leading to the Rs 2,080 target price.
Disclaimer: This article provides stock market news for informational purposes only and should not be construed as investment advice. Readers are strongly encouraged to consult with a qualified financial advisor before making any investment decisions.