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Elara Securities initiates coverage on LG Electronics India with an ‘Accumulate’ rating and ₹1,750 target, implying nearly 14% upside, citing localisation, capex-led expansion and growth from the LG Essential series.
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Elara Securities has initiated coverage on LG Electronics India (LGEIL) with an ‘Accumulate’ rating and a target price of ₹1,750, implying an upside of about 14% from Monday’s closing price of ₹1,534.20.
The brokerage said the company remains the undisputed leader in India’s consumer durables market, with decade-long dominance across key product categories. It expects revenue growth to accelerate to 14–16% over the next five years, driven primarily by the rollout of the LG Essential series aimed at the economy segment in tier II and III markets.
According to Elara, the strategy mirrors the playbook used by competitors such as Haier and Bluestar, which expanded aggressively in the economy and mass-premium segments through pricing, capex and localisation.
The brokerage expects earnings to compound at a CAGR of 18% between FY26E and FY28E, supported by rising localisation levels, strong support from the parent company in research and technology, and continued leadership in premium product categories.
Localisation is expected to rise to 63% from the current 54% over the next four years, aided by backward integration into components such as compressors and printed circuit boards.
LGEIL is also planning a ₹50 billion capex investment at its Sri City facility in Tamil Nadu over the next four years to expand capacity in room air conditioners, washing machines, refrigerators and compressors. Elara estimates the investment could generate ₹200–250 billion in additional revenue once fully ramped up.
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The brokerage also expects EBITDA margins to improve to above 12% by FY28E from 11.4% in FY26E, while exports could double to 10–12% of revenue over the next five years, supported by the reopening of the US market.
However, Elara flagged risks including a potential slowdown in consumer durable demand, intensifying competition, challenges in passing on price increases and contingent liabilities related to royalty payments to the parent company.
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Shares of LG Electronics India were trading at ₹1,577.40, up ₹43.20 or 2.82%, as of 2:09 pm on Tuesday.
