Buy LG Electronics India; target of Rs 1820: ICICI Securities

Buy

ICICI Securities research report on LG Electronics India

We visited LG Electronics India’s (LG) plant in Pune, Maharashtra. We note that it remains well positioned to capitalise on a strong RAC-led upcycle, supported by favourable summer conditions, premiumisation and capacity expansion. Other takeaways: (1) Management indicated LG has performed relatively better in Jan–Feb’26 YoY. (2) It reiterated its revenue guidance of INR 24.3bn for FY26 (implying ~6% YoY growth in Q4FY26) with double-digit EBITDA margin (implied margin of ~12.5% in Q4FY26). (3) It expects RAC industry could grow > 40% YoY in CY26, driven by strong summer season and favourable inventory. (4) Despite near-term headwinds from geopolitical disruptions and gas availability, LG appears well placed to manage costs through alternate fuel options. (5) We model mid-single-digit price hikes in RAC and select categories in Apr–May’26, which could support margins amid elevated input costs.

Outlook

We model LG to report revenue and PAT CAGRs of 8.3% and 5.0%, respectively, over FY25–28E. Maintain BUY with a DCF-based revised TP of INR 1,820 (earlier INR 1,746; implied target P/E at 48x FY28E EPS).

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LG Electronics India - 1803026 - icici