LG Electronics India Coverage Begins With Strong 'Buy' Calls Ahead Of Listing

Multiple brokerages including Nomura, Motilal Oswal and Ambit have initiated coverage on LG Electronics India Ltd. with a ‘Buy’ rating and a target price of Rs 1,800, implying a 58% upside from its IPO price of Rs 1,140 ahead of its listing on Oct.14. The brokerages sees LGI as a strong play on India’s mass premiumisation trend, export potential, and B2B expansion.

“India’s demographics provide structural growth visibility for large appliances,” Nomura stated in its note, highlighting the low penetration levels of white goods such as air conditioners (12%), washing machines (22%), and refrigerators (35%) compared to global standards.

• Initiates 'Buy' with a price target of Rs 1,800.

• Focus on mass premiumisation, exports, and business-to-business initiatives to drive growth with improving profitability.

• India's demographics provide structural growth visibility for large appliances. The firm estimates Ebitda margins will improve from 12.8% in FY25 to ~14.1% in FY28F.

• This improvement is led by a better mix, operating leverage, and localisation.

• Expects the company to trade at the mid-point of the trading band of 30-45x.

• Initiates coverage with a target price of Rs 1,800.

• It holds a leadership position with high industry growth potential.

• Premiumisation and localisation are expected to drive profitability.

• Expects LG to trade at higher multiples given its strong return ratios.

• Consistently generated operating cash flows over Rs 154 billion.

• Initiates coverage with a 'Buy' rating and a target price of Rs 1,820.

• Export could be a key component with the new Sri City plant doubling capacity.

• Increased localisation and premiumisation are expected to drive margin expansion.

• GST cuts are expected to help growth revival.

LG Electronics India will list on the exchanges on Tuesday after the company's initial public issue eceived bids for 385 crore shares against 7.13 crore shares on offer, resulting in an overall subscription of 54.02 times. The total bid amount stood at Rs 4.4 lakh crore, making it the most subscribed IPO in terms of value.

One of the biggest IPOs in India’s consumer electronics market was looking to raise Rs 813.07 crore through a book-built issue.