LG Electronics Gets ICICI Securities' 'Buy' Initiation; Sees Upto 35% Potential Upside

LG commands one of the largest in-house manufacturing capacities in white goods in India and its in-house manufactured goods as a percentage of net sales increased from 84.2% in FY22 to 86.1% in FY25..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .ICICI Securities Report.We initiate coverage on LG Electronics India Ltd. with a Buy rating as: It has developed strong competitive advantages such as LG brand with premium positioning, established distribution network, and multiple manufacturing units in India with strong backward integration capabilities. Its share-of-voice is higher than that of peers, indicating potential for market share gains. LG is also investing in strengthening its distribution network and we model this to act as a key competitive advantage and growth driver. It has generated strong return ratios and free-cash-flow over FY14-25. Core RoE (ex-cash and tax adjusted other income) is >90%. It is market leader in most white goods it operates in and is beneficiary of premiumisation trend.Revenue contribution of LG India to parent’s revenue rose from 3.5% in CY21 to 4.3% in CY24, highlighting the growing importance of the Indian business to the parent. .We also believe recent reduction in GST rates, income tax and interest rates augurs well for growth of most categories in FY27-28E and model LG to be a beneficiary. We model LG India to report revenue/PAT CAGR of 9.3%/7.9% over FY25–28E. We initiate coverage on the stock with a BUY rating and a DCF-based target price of Rs 1,700 (implying 45x FY27E and 42x FY28E earnings). .Key risks: Steep competition, delay/ failure in launch of new products, and rapid technological changes..Click on the attachment to read the full report:.LG Electronics Shares Can Zoom 58% Says Motilal Oswal As It Initiates Coverage.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

LG Electronics Gets ICICI Securities' 'Buy' Initiation; Sees Upto 35% Potential Upside

ICICI Securities initiate coverage on LG Electronics India with a Buy rating on sustained market leadership across major categories.

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