Axis Direct sees 17% upside in LG Electronics India — Why the brokerage is bullish now

Axis Direct has initiated coverage on LG Electronics India with a ‘Buy’ rating and a target price of Rs 1,815 per share, signalling an upside of 16.6 per cent from current levels. The brokerage said the company’s strong brand recall, leadership across key product categories and wide distribution footprint position it well for consistent growth and profitability over the medium term.

According to the brokerage, LG Electronics India is expected to post a compound annual growth rate (CAGR) of 9 per cent in revenue, 19 per cent in Ebitda and 14 per cent in profit after tax (PAT) over FY26–FY28E. Axis Direct has valued the company at 44 times FY28E earnings per share, citing visibility on earnings growth and margin stability driven by scale and operating leverage.

On Thursday, LG Electronics India shares were trading at Rs 1,556.90 at around 12:15 pm IST, down Rs 4.30 or 0.28 per cent from the previous close. The stock’s performance was largely in line with the broader market trend during the session.

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Leadership across categories, premium mix to deepen

Axis Direct said LG continues to enjoy strong market shares across major consumer durable segments and is steadily gaining traction in premium categories. The company remains a leader in segments such as side-by-side refrigerators, while its presence in higher-end appliances continues to expand. The brokerage expects increasing penetration of consumer durables in tier-2 and tier-3 cities to drive category growth, where LG’s extensive dealer and service network could help it further strengthen its position. It also flagged capacity expansion, supply-chain improvements and the planned launch of LG Essentials, an entry-level brand, as potential drivers of incremental volumes.

India-focused innovation supports brand strength

The report highlighted LG’s long track record of tailoring global technologies to Indian consumer preferences. Early adoption of OLED, 4K and Smart TVs, energy-efficient inverter air conditioners, washer–dryer solutions suited to local climatic conditions and microwave ovens designed for Indian cooking habits were cited as examples of this approach. Axis Direct said a strong after-sales service network and localisation in product design continue to reinforce brand loyalty.

Localisation seen improving cost efficiency

Axis Direct expects LG’s focus on localisation to remain a key competitive advantage. The company works with 287 long-standing suppliers, and local sourcing accounted for 54 per cent of procurement in FY25. This, the brokerage said, helps reduce input costs, limit currency-related risks and shorten supply timelines. The upcoming facility at Sri City is expected to further improve logistics efficiency and localisation levels. The report also noted the Rs 705 crore incentive received under a government manufacturing scheme, reflecting LG’s participation in expansion-led manufacturing initiatives.

Integrated model and multiple growth triggers

The brokerage said LG’s integrated operating model—spanning manufacturing, product development and distribution—supports cost discipline, scale benefits and margin stability. A return on capital employed (RoCE) of 41 per cent in FY25 was cited as evidence of strong capital efficiency. Looking ahead, Axis Direct identified expansion in B2B segments, plans to double exports by FY27, entry into new product categories and rising localisation under the ‘Make in India’ initiative as key growth drivers for LG Electronics India.