Synopsis:
The company’s shares gained 50% on IPO listing, reflecting strong investor confidence. Robust FY24-25 performance, extensive distribution and after-sales network, advanced manufacturing, and strategic localization position it to capture India’s growing home appliance market, supporting sustained profitability and long-term growth.
India’s household appliances sector is thriving, estimated at USD 22.45 billion in 2024 and projected to grow at a 7.2% CAGR through 2030 . Growth is driven by rising incomes, urbanization, rural electrification, and smart appliance adoption. Increasing online retail and government manufacturing incentives like “Make in India” continue to uplift demand and domestic production .
With a market capitalization of Rs 1,15,116.40 crore, the shares of LG Electronics India Ltd were trading at Rs 1,696.00 per share, decreasing around 1.11 percent as compared to the issue price of Rs 1,140.00 per share.
Brokerage Recommendation
Motilal Oswal, one of the well-known brokerages in India, in its “bull case” scenario, gave a ‘Buy’ recommendation on this stock with a target price of Rs 2,085 apiece, indicating a potential upside of 23 percent from Tuesday’s price of Rs 1,696.00 per share.
India’s home appliances and consumer electronics market is projected to grow at a 14% CAGR from 2024–2029. With strong leadership across major product categories, LG Electronics India is well-positioned to benefit from this expansion, leveraging its brand presence and operational strengths to capture market share and drive growth.
Furthermore, Motilal Oswal expects LG Electronics India to maintain high valuation multiples, driven by robust return ratios, with RoE and RoIC projected at 30% and 66% by FY28. Strong operating cash flow conversion, strategic localization, and focus on high-margin B2B and AMC segments are set to enhance gross margins. Coupled with its leadership across key product categories, the company is well-positioned for sustained profitability and investor confidence.
Additionally, Motilal Oswal highlights distribution as LG Electronics India’s key strength, supported by over 1,000 after-sales service centers nationwide. The company’s commitment to brand promotion is evident, allocating around 4.5% of topline to advertising, a strategy expected to continue through FY28, reinforcing market presence and driving long-term growth.
Also read: Auto Ancillaries Stock in Focus After FII Offloads 3.8 Lakh Shares via Bulk Deal
Financial & Operational highlights
The company delivered strong FY24-25 results, with revenue rising 14% to Rs 24,367 crore and net profit surging 46% to Rs 2,203 crore. Robust profit growth outpaced revenue expansion, reflecting improved operational efficiency, effective cost management, and stronger business performance across key segments.
LG Electronics is a global player in home appliances and consumer electronics, with a strong presence in India. It offers a wide range of products, including washing machines, refrigerators, televisions, air conditioners, and microwaves.
LG Electronics India has built the country’s largest distribution network among home appliance and consumer electronics brands, operating 36,401 B2C touchpoints, including BrandShops, modern trade, online, and traditional outlets as of June 2024. Its extensive after-sales network, with 949 service centers and 12,590 engineers, ensures prompt installations, maintenance, and repairs, strengthening customer trust, enhancing service quality, and supporting the company’s competitive positioning in the Indian market.
Additionally, the company leverages strong manufacturing capabilities through its Noida and Pune units, supported by advanced automation, including smart monitoring systems and auto-guided vehicles, enhancing efficiency and capacity utilization. A phased approach to local sourcing reduces costs, import duties, and inventory expenses, boosting competitiveness. This combination of technology-driven operations and strategic supply chain management positions the company to maintain high productivity, cost efficiency, and market responsiveness.
Today, LG Electronics’ IPO listed on BSE at Rs 1,710.10, securing a strong 50% listing gain for investors over the Rs 1,140 issue price. With a hefty Rs 11,607 crore issue size, the minimum investment stood at Rs 14,040 for 13 shares. The enthusiastic response and sharp listing premium highlight investor confidence in LG’s growth prospects.
Written by Abhishek Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
