LG Electronics India Sees Target of Rs 1690: Prabhudas Lilladher

LG Electronics India Reports Strong Revenue Growth, Downgrades Earnings Estimates

LG Electronics India's latest research report by Prabhudas Lilladher highlights a robust revenue growth in the Home Appliances & Air Solutions segment, which grew 5.7% Year-over-Year (YoY) to Rs65.2 billion. This increase is attributed to a broad-based demand recovery and premiumization across categories, with significant traction in fully automatic washing machines. Additionally, dishwashers emerged as a key growth driver in the segment.

The Home Entertainment segment recorded a strong 19.6% YoY revenue growth to Rs15.4 billion, driven by healthy demand for large-screen premium TVs and robust growth in the Information Display business. This growth was supported by commercial signage order inflows.

However, the company's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin contracted by 250bps YoY due to several factors, including elevated commodity prices, rupee depreciation impacting approximately 1.0%, strategic channel investments affecting approximately 1.1%, and higher e-waste compliance costs affecting margins by approximately 0.2%.

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In light of these developments, Prabhudas Lilladher has downward revised its earnings estimates for FY27 and FY28 by 8.0% and 7.7%, respectively. This revision is based on continued pressure from elevated commodity prices, higher import-led input costs, and increased marketing expenses.

Revenue and Earnings Growth Estimates

The research firm has downgraded its rating to 'Accumulate' from 'BUY', with a revised Target Price (TP) of Rs1,690 (earlier Rs1,813) based on 45x FY28 Earnings Per Share (EPS).

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