Buy LG Electronics India; target of Rs 1890: Motilal Oswal

Motilal Oswal's research report on LG Electronics India

LG Electronics India’s (LGEIL) 2QFY26 revenue inched up ~1% YoY to INR61.7b. However, EBITDA declined ~28% YoY to INR5.5b. OPM contracted 3.5pp YoY to 8.9% due to external factors (under absorption of fixed cost, rising commodity prices, and higher recycling costs). PAT declined ~27% YoY to INR3.9b. We cut our EPS estimates ~13% for FY26E to factor in margin pressure in 2Q and ~7% for FY26-FY27E (each). The stock is trading at 45x/39x FY27/FY28E EPS. We value LGEIL at 45x FY28E EPS to arrive at our TP of INR1,890. Reiterate Buy.

Outlook

The stock is trading reasonably at 45x/39x FY27/FY28E EPS. We value LGEIL at 45x FY28E EPS to arrive at our TP of INR1,890. Reiterate BUY.