LG Electronics Shares Can Zoom 58% Says Motilal Oswal As It Initiates Coverage

Motilal Oswal expects LG to trade at higher multiples, given the strong return ratios, higher operating cash flow conversion, a strategic focus on localization, targeted growth in high-margin B2B and AMC revenues, and a leadership position across key product categories..Blockbuster Listing! LG Electronics Shares List at 50% Premium; Should You Buy? Check Target Price.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. .Motilal Oswal Report.LG Electronics India Ltd. has consistently generated operating cash flows (cumulative OCF of Rs 154 billion over the past 10 years; ~69% of the same was used for dividend payout) and has a high Ebitda-to-OCF conversion ratio (average of ~70% over FY19-25; expected to reach ~74% over FY26-28). The company’s planned capex of Rs 50 billion for the new plant in Sri City (spread over FY26-29E) is expected to result in lower FCF (cumulative FCF of ~Rs 41 billion) over FY26-28. Significant investments in the new plant at Sri City are expected to initially reduce the asset turnover ratio. Along with lower dividend payouts (assumed at 35% vs the average payout of ~69% over FY16-25), this will likely moderate return ratios. RoE is estimated to be ~30% in FY28E vs 45% in FY25 and an average of ~36% over FY16-25. We also believe that the company could target the mass category segment (~19% of the industry in H1 CY25) through premiumization of mass products as part of its global strategy. This strategy may also help improve the asset turnover of the Sri City plant, which in turn could enhance return ratios. We initiate coverage on LG Electronics with a Buy rating and a target price of Rs 1,800, premised on 40 times FY28E EPS. We expect LG to trade at higher multiples, given the strong return ratios, higher OCF conversion, a strategic focus on localization, targeted growth in high-margin B2B and AMC revenues, and a leadership position across key product categories..Click on the attachment to read the full report:.Swiggy Shares Can Zoom 26% Says Motilal Oswal, Maintaining 'Buy' — Here's Why.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 Shares Can Zoom 58% Says Motilal Oswal As It Initiates Coverage

Motilal Oswal is bullish on LG Electroncis as it sees strong fundamentals to support growth, thus initiates coverage with 'Buy' call.

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