LG Electronics India Research Report

Key Highlights

We visited LGEL's Pune plant in Maharashtra and observed steady demand momentum led by Refrigeration Air Conditioners (RACs), with premium-led value growth and entry-level segments supporting volumes. RAC inventory normalized in Q3FY26, but Q4FY26 performance remains contingent on summer intensity.

Business Strategy

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The company is strengthening its portfolio through localization and exports, with component manufacturing for washing machines commencing at Noida. Exports are targeted to reach ~12% of revenue by FY27. The Pune plant remains focused on premium products, while the Noida plant caters to the mass and essential segments.

Operational Efficiency

The transition to Pipe Natural Gas (PNG) is underway with negligible disruption risk, supported by minimal LPG dependency and alternative fuel availability. Growth visibility is supported by improving B2B traction (9-10% of revenue), premiumization, and a strong distribution network.

Financial Projections

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

We tweak our FY27/28 earnings estimate and maintain a 'BUY' rating, with a revised Target Price (TP) of Rs1,813 (earlier Rs1,808) based on 45x FY28 EPS. We estimate FY26-28E revenue/EBITDA/PAT CAGR of 11.5%/24.2%/21.1%.