Onto the big listing today- LG Electronics shares are making a debut on D’Street today, and Motilal Oswal Financial Services has initiated coverage on LG Electronics India with a ‘Buy’ rating even before listing on the bourses. The brokerage has a target price of Rs 1,800, implying that the stock may rise by 58% in the next 12 months.
Here are 3 reasons why the brokerage house initiated coverage and predicts the stunning 58% rally-
Motilal Oswal on LG Electronics India: Favourable tailwinds
Motilal Oswal stated that the Indian consumer durables market is expected to experience robust expansion. India’s home appliances and consumer electronics market is estimated to record a compounded annual growth rate (CAGR) of around 14% over CY24-CY29.
LG Electronics is considered well-positioned to capitalise on this growth opportunity as the company has a leadership position across key product categories.
Motilal Oswal on LG Electronics India: Leadership across key segments
The home appliance giant is established as a strong player and multi-category leader in various consumer electronics categories that include TVs, refrigerators, washing machines, and air conditioners (ACs). The company holds significant offline market shares across major categories, such as 34% in washing machines, 30% in refrigerators, 28% in panel televisions, and 21% in inverter AC. Also, the company commands strong market shares in premium segments, which include 63% in OLED TVs, 37% in front-load washing machines, and 43% in side-by-side refrigerators.
Motilal Oswal on LG Electronics India: Localisation driving profitability
LG Electronics’ strategic focus on premiumisation is evident in innovative launches like OLED TVs, inverter ACs, and advanced smart appliances. Furthermore, the company is increasing localisation. It has bought 54% of raw materials domestically in FY25. The company aims to increase this to 63% over the next four years. The brokerage said that this increased localisation is expected to lead to an improvement in gross margin.
Motilal Oswal on LG Electronics India: Extensive distribution network
The company’s distribution remains a key competitive strength, with 35,640 B2C touchpoints, 777 exclusive brand shops, and 463 B2B trade partners in Q1 FY26.
The company also operates one of India’s largest after-sales networks, comprising 1,006 service centres. “It allocates 4.5% of its revenue to advertising and promotion (A&P) expenses, which we expect to continue until FY28,” said Motilal Oswal.