Key Points:
- Market Leader: Top shares in appliances (18–34%).
- Expansion: Premium focus, B2B growth, new plant by FY27.
- Strong Finances: 13% revenue CAGR, high RoE/RoCE, 50x valuation.
New Delhi, Oct. 14—Emkay Global has initiated coverage on LG Electronics India IPO with a Buy rating and a target price of Rs 2,050, indicating an 80 per cent upside from current levels ahead of the company’s IPO listing today.
The brokerage valued the stock at 50 times September 2027 earnings, a 10 per cent premium to Havells, citing LG’s brand strength, diversified category leadership, and strategic role in its parent company’s global expansion.
Emkay said LG’s premium positioning is a key growth driver. Nearly 25 per cent of LG India’s revenue comes from premium segments, compared with the industry’s 15 per cent. The brokerage expects this share to rise to 40 per cent in five years, outpacing the industry’s projected 27 per cent.
Market leadership across categories
Over the past three decades, LG has established a strong foothold in India’s consumer appliance market. The company leads major categories, holding a 34 per cent share in refrigerators, 30 per cent in washing machines, 20 per cent in televisions, and 18 per cent in room air-conditioners, according to Emkay’s report.
India remains LG’s largest market outside the US and Korea, and is expected to contribute about one-third of the company’s global growth over the next five years. Under LG’s Global South strategy, announced in July 2025, India is also being positioned as a key export hub for Brazil, Mexico, and other emerging markets.
Expansion and financial outlook
The brokerage highlighted several growth drivers, including LG’s push into mass-premium categories, an expanding business-to-business (B2B) presence in HVAC and information displays, and increasing localisation of raw materials — from 54 per cent in FY25 with plans to rise by 2–3 per cent annually.
A third manufacturing plant, expected to start operations in FY27, will strengthen exports and enable more innovation-led product launches, supporting growth ahead of the LG Electronics India IPO.
Emkay projects a 13 per cent compound annual growth rate (CAGR) in revenue and 14 per cent CAGR in earnings per share between FY26 and FY28, supported by steady margins of around 13 per cent. LG’s net cash position is expected to rise from Rs 3,700 crore in FY25 to about Rs 5,000 crore in FY28, with an average dividend payout ratio of 65 per cent during FY27–FY28.
The brokerage estimates a free cash flow to equity yield of 7.6 per cent by FY28. LG’s return on equity (RoE) is forecast to average 32 per cent, while return on capital employed (RoCE) may reach 44 per cent.
Premium valuation justified
After a subdued 6 per cent EPS CAGR between FY19 and FY26, LG’s earnings are expected to rebound sharply on the back of product expansion and consistent execution. Emkay believes LG warrants a premium valuation of 50 times earnings, given its leadership position and superior RoE profile (31–33 per cent) compared with peers such as Havells (14–20 per cent) and Blue Star (18–21 per cent).
However, Emkay cautioned that a slowdown in consumer demand or rising competition in the mass-premium segment could affect performance. Despite these risks, the brokerage said LG’s strong financials, category leadership, and alignment with the parent company’s global growth strategy position it well for long-term success.
“LG Electronics India IPO is set to play a pivotal role in the Global South strategy, with robust earnings growth and superior return metrics,” Emkay said in its report.
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