LG continues to strengthen its position in the room AC market, particularly in 5-star inverter ACs. It now holds leadership position in the 5-star RAC category. The refrigerator category saw some demand softness due to weaker consumer sentiment.
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ICICI Securities Report
ICICI Securities remains positive on LG Electronics India Ltd. given its sustained market leadership across categories and backward integration.
While near-term demand is expected to remain soft due to weak primary and secondary sales post-festive season, the brokerage sees structural strengths supporting medium-term growth.
Recent GST cuts in air conditioner, television and dishwashers have helped to drive volumes, but demand has slowed down after festivals.
The brokerage highlights-
Price hike of 8–10% in 5-star ACs could happen due to new BEE norms.
LG gained market share in 5-star RACs and refrigerators, even in a weak demand environment.
The company’s channel inventory is relatively placed better than peers, although higher YoY.
LG has rationalised various promotional schemes to support margin.
The Essential series is gaining traction and supports revenue visibility.
The company plans to launch chest freezers by H1 FY27 and would leverage its existing distribution network.
The brokerage remains positive on the back of the company’s premium positioning, sustained market share and backward integration.
ICICI Securities maintains Buy with a DCF-based target price of Rs 1,875; implied target P/E at 45x FY28E earnings per share.
Key risks:
Steep increase in commodity prices; and material increase in competitive pressures.
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