The shares of LG Electronics India rose around 2 percent on November 25 after Jefferies initiated coverage on the stock with a 'Buy' call and a target price implying strong upside potential. The newly-listed stock has now snapped a two-session losing streak.
LG Electronics India shares rose to Rs 1,648.60 apiece in the morning trading hours of Tuesday.
Here's what Jefferies said about LG Electronics India:
Jefferies initiated coverage on the shares of LG Electronics India with a 'Buy' call and a target price of Rs 1,980 apiece. This implies an upside potential of around 22.5 percent from the stock's previous closing price of Rs 1,616.40 apiece.
The international brokerage views LG Electronics India as a strong play on Indian discretionary consumption, given its diversified product mix. It added that the company's market leadership in multiple products, premium brand recall, new launches, entrenched distribution and backward integration result in industry-leading margins and high return ratios.
Jefferies estimates LG Electronics India's sales to rise 13 percent over FY26-28, and operating margin rising to 12.8 percent by FY28.
JPMorgan, Morgan Stanley also bullish on LG Electronics India:
The stock has received bullish calls from several brokerages recently. JPMorgan and Morgan Stanley last week initiated coverage on the stock with an 'Overweight' rating, with target prices implying upside potential of 18 percent and 15 percent respectively from November 18's closing levels.
JPMorgan said that India remains one of LG Electronics' key overseas markets, contributing 4.3 percent to global revenue in 2024 and accounting for a significantly higher share of profits due to stronger margin performance.
The appliance & consumer electronics maker's penetration into both value and premium market segments, wide distribution channels and a well-entrenched service network will provide a long runway for growth, it said.
Morgan Stanley meanwhile noted that LG Electronics stands out across categories in a competitive consumer durables market. Its revenue and margin will be driven by new capacity, exports and B2B business.
While near-term FY26 earnings may dip, medium-term expansion and localisation efforts are expected to drive revenue, margins, and steady earnings growth through FY28, the international brokerage said.
LG Electronics Q2 results:
LG Electronics India on November 13 reported a net profit of Rs 389 crore for the July-September quarter of FY26. This marks a 27 percent year-on-year (YoY) decline from the Rs 535.7 crore net profit reported in the corresponding quarter of the previous financial year.
The firm's revenue from operations meanwhile rose less than 1 percent YoY to Rs 6,174 crore during the quarter under review. Expenses grew 5 percent YoY to Rs 5,728.95 crore, while EBITDA fell nearly 28 percent to Rs 548 crore. EBITDA margin dropped to 8.9 percent.
LG Electronics share price history:
LG Electronics India shares made a bumper stock market debut on October 14, listing at a premium of 50 percent over its IPO price at Rs 1,710.10 per share on the NSE. This comes after the Rs 11,607-crore IPO of the company saw strong investor interest during its three days of public bidding, being subscribed more than 54 times between October 7 and October 9.
The stock has so far fallen nearly 3 percent since then.
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(With inputs from Reuters)
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