JM Financial bets on LG Electronics India but share price target lowest among analysts saying 'buy'

Brokerage firm JM Financial has initiated coverage on LG Electronics India with a 'Buy' rating and a price target of ₹1,630, citing its market leadership, strong margins and robust fundamentals.

JM Financial said that LG Electronics India commands over 25% market share across most product categories, excluding air conditioners, and enjoys an industry-leading margin of 12.8% in FY25.

The brokerage points out strong support from the parent company, which provides a competitive edge, along with the breadth of in-house manufacturing, with 95% of products made locally.

Among India's leading home appliance brands, LG Electronics India has retained its pole position in the offline channel across categories such as refrigerators, air conditioners, washing machines and televisions.

This dominance, JM Financial believes, is driven by strong brand recall, technological and innovation leadership, solid parentage and a wide distribution network.

The company's leadership in the premium segment, extensive in-house manufacturing capabilities and exposure to higher-margin businesses such as B2B products, service contracts and exports have helped it sustain a margin profile superior to peers.

In addition, LG Electronics India has launched the LG Essential series to address the mass-premium segment, aimed at a large base of Indian households.

The brokerage expects scaling up of these initiatives, along with macro tailwinds, to support sustained revenue and PAT growth.

JM Financial also points to the benefits LG Electronics India derives from its parent's global scale, strong focus on technology and R&D, with annual spends of $2 billion, and manufacturing excellence.

These factors are seen as critical in maintaining category leadership amid intense competition and rapidly evolving consumer preferences.

LG Electronics India manufactures 95% of its products at its Noida and Pune facilities, giving it greater control over the supply chain and enabling scale benefits.

The company has also announced plans for a third manufacturing unit at Sri City in Andhra Pradesh, with an investment of ₹5,000 crore, which is expected to become operational by FY27E.

Currently, 20 analysts track LG Electronics India, with two recommending a 'Sell' and the rest maintaining a 'Buy' rating on the stock.

Shares of LG Electronics India were trading 1.35% lower on Tuesday at ₹1,352.50. The stock is down 23% from its post-listing high of ₹1,749.

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