LG Electronics India has been in the spotlight after its disappointing quarterly earnings. However, leading domestic brokerage firm Motilal Oswal has reiterated its Buy call on the newly listed consumer electronics company. The brokerage has set a target price of Rs 1,890, indicating nearly 17% upside from current levels.
According to the brokerage report, the rating indicates the company’s long-term earnings outlook despite near-term margin pressure.
Let’s take a look at the key factors why the brokerage is bullish on the stock and what is the rationale behind it –
Motilal Oswal on LG Electronics India: Tough quarter, but revenue holds steady
LG Electronics India reported a modest revenue growth of about 1% year-on-year, reaching Rs 6,170 crore in the second quarter of financial year 2025-26. However, earnings before interest, taxes, depreciation and amortisation (EBITDA), a measure of operating performance slipped by around 28% year-on-year to Rs 550 crore.
Profit after tax (PAT) also dropped almost 27% year-on-year, settling at Rs 390 crore for the quarter.
According to the brokerage report, the weakness came primarily from cost pressures. Operating profit margin (OPM) fell sharply by 3.5 percentage points to 8.9%, affected by “under absorption of fixed cost, rising commodity prices, and higher recycling costs.”
Motilal Oswal on LG Electronics India: Why the brokerage cut earnings estimates
Motilal Oswal has trimmed its earnings-per-share (EPS) estimates for the company by around 13% for FY26 and nearly 7% for FY26-FY27.
The brokerage highlighted in its report, “We cut our EPS estimates ~13% for FY26E to factor in margin pressure in 2Q and ~7% for FY26-FY27E (each).”
Despite this revision, the firm maintained its valuation based on future potential. The stock is currently trading at 45 times FY27 earnings per share and 39 times FY28 estimated earnings per share. Motilal Oswal values the company at 45 times FY28 earnings, arriving at a target of Rs 1,890.
“We value LG Electronics India at 45x FY28E EPS to arrive at our target price of Rs 1,890. Reiterate Buy.”
Motilal Oswal on LG Electronics India: What could improve ahead
Although the company posted a weak quarter, Motilal Oswal expects the company’s profitability to gradually recover. The brokerage said the company is focusing on higher localisation, improving operational efficiency, and increasing the share of premium products.
According to the report, management is confident that margin expansion will come from these operational changes. “LG electronics expects margin expansion to be driven by higher localisation, enhanced operational efficiencies, and a higher premium products mix.”
Motilal Oswal on LG Electronics India: Future earnings outlook
The brokerage highlighted the company’s approach of running two parallel lines. These include the regular LG Essentials range and a growing premium product portfolio aimed at niche buyers.
“We anticipate a recovery in operating profit margin in FY27/28, driven by increased domestic sourcing of components, a focus on B2B and export markets, and growth in AMC (annual maintenance contract) revenue,” added the report.
The brokerage estimates that revenue, EBITDA and PAT may grow at a compounded rate of 8%, 8% and 9% respectively between FY25 and FY28.
LG Electronics India’s stock market debut recap
LG Electronics India was listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on October 14, 2025, after its initial public offering (IPO) held between October 7 and October 9. The IPO was priced at Rs 1,140 per share. On listing day, the stock opened at Rs 1,715 on the BSE, a premium of 50.44%. It is down 4% from its listing price.
