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ICICI Securities Report
ICICI Securities has reiterated its Buy rating on LG Electronics India Ltd. following a visit to the company's manufacturing facility in Pune, Maharashtra, citing strong positioning to capitalise on a RAC‑led upcycle and multiple growth drivers. The brokerage has raised its target price to Rs 1,820 from Rs 1,746, based on a discounted-cash-flow valuation.
According to ICICI Securities, LG remains well placed to benefit from favorable summer conditions, premiumisation trends, and ongoing capacity expansion in room air conditioners (RACs). Management indicated that LG has performed relatively better on a YoY basis during January–February 2026.
The company reiterated its FY26 revenue guidance of Rs 24.3 billion, implying around 6% YoY growth in Q4 FY26, along with a double‑digit Ebitda margin, with Q4 FY26 margins estimated at about 12.5%. ICICI Securities expects the RAC industry to grow over 40% YoY in CY26, supported by a strong summer season and favourable inventory levels.
While near‑term headwinds persist from geopolitical disruptions and gas availability, the brokerage notes that LG is well positioned to manage costs through alternate fuel options. It has also factored in mid‑single‑digit price hikes across RACs and select categories during April–May 2026, which could help support margins amid elevated input costs.
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