Buy LG Electronics India; target of Rs 1875: ICICI Securities

ICICI Securities's research report on LG Electronics India

LG Electronics India (LG) delivered a steady Q2FY26 despite an unfavourable summer, and geopolitical tensions. Takeaways: (1) LG maintained its industry-leading market share in washing machines, gained in RACs, refrigerators and TVs; thus, reflecting strong brand pull. (2) Margins in Q2FY26 were impacted due to elevated ad-spend, GTM investment and strong channel support, which we believe would normalise in H2FY26. (3) The company aims to increase localisation by 200–300bps annually, expecting it to be ~70%. Localisation shall reduce FX impact by 3–4%; thereby, enabling it to expand margins. (4) With Sri City plant’s commencement, LG would have better control over product quality and supply chain. (5) The company took 1.5–2% price hikes in Oct’25 to counter input cost pressures.

Outlook

We model LG to report revenue and PAT CAGRs of 10.1% and 8.8%, respectively, over FY25–28E. Maintain BUY with a DCF-based revised TP of INR 1,875 (earlier INR 1,700; implied target P/E at 45x FY28E EPS).