LG Electronics India share price at Rs 2,050! Emkay Global sees 80% upside; here's why

Ahead of its IPO listing today, Emkay Global has initiated coverage on LG Electronics India (LG) with a ‘Buy’ rating and a target price of Rs 2,050, implying an 80 per cent upside from current levels. The brokerage values the LG stock at 50x Sep-27E earnings, at a 10 per cent premium to Havells, citing LG’s strong brand equity, diversified category leadership, and growing strategic importance within the parent’s global expansion plans.

Over the past three decades, LG has built a dominant franchise in India, leading major appliance categories such as refrigerators (34 per cent market share), washing machines (30 per cent), televisions (20 per cent), and room air-conditioners (18 per cent). The company’s premium positioning remains a key differentiator, with nearly 25 per cent of revenue coming from premium segments, compared with the industry’s 15 per cent share. Emkay expects this mix to rise to around 40 per cent for LG over the next five years, versus 27 per cent for the industry.

Under the parent’s ‘Global South’ strategy, announced in July 2025, India, LG’s largest market outside the US and Korea, is expected to contribute about one-third of the company’s global growth over the next five years. India is also being positioned as a key export hub for markets such as Brazil and Mexico. Expansion into mass-premium categories, rising exports, a growing B2B presence in HVAC and information displays, and improving localisation of raw materials (54 per cent in FY25, expected to rise by 2–3 per cent annually) are expected to drive strong operational leverage. The third manufacturing plant, to begin operations in FY27E, will further support exports and innovation-led product launches.

Emkay forecasts a 13 per cent CAGR in revenue and 14 per cent CAGR in EPS over FY26E–28E, supported by stable margins of around 13 per cent, strong free cash flows, and a net cash balance sheet. LG is expected to maintain robust return ratios with average RoE of 32 per cent and RoCE of 44 per cent. Net cash is projected to rise from Rs 3,700 crore in FY25 to about Rs 5,000 crore in FY28E, with an average dividend payout ratio of 65 per cent over FY27E–FY28E. The free cash flow to equity (FCFE) yield is estimated at 7.6 per cent by FY28E.

After a relatively muted 6 per cent EPS CAGR between FY19 and FY26E, Emkay expects a sharp revival in earnings, supported by product expansion and steady execution. The brokerage believes LG deserves a premium valuation multiple of 50x, given its category leadership, high RoE profile (31–33 per cent over FY26E–28E) versus peers such as Havells (14–20 per cent) and Blue Star (18–21 per cent), and sustained growth visibility.

Key risks include an industry-wide demand slowdown and intensifying competition in the mass-premium appliance segment. Nevertheless, Emkay expects LG Electronics India to play a pivotal role in the parent’s Global South strategy, with robust earnings growth, superior return metrics, and a strong balance sheet supporting its investment appeal ahead of the IPO listing.