ICICI Securities has maintained a BUY call on LG Electronics India Ltd, setting a target price of Rs 1,800 over 12 months, implying upside of 17% from the current market price of Rs 1,545. The brokerage’s case rests on a familiar but powerful theme: short-term margin pressure may linger, but the company’s structural growth engine remains intact. LG Electronics India is riding premiumisation, stronger demand in cooling products, rising export ambitions and a deeper manufacturing footprint. Even as commodity costs, rupee weakness and channel investments weighed on quarterly profitability, the broader demand backdrop remains constructive. The house believes the setback is temporary, not thematic.

Quarterly Scorecard

LG Electronics India delivered a resilient Q4FY26 performance, with revenue rising 8% year on year to Rs 8,054 crore and jumping 96% sequentially, supported by demand recovery and strong traction in premium products. Home Appliances and Air Solutions posted Rs 6,516 crore of revenue, up 5.7% year on year, while the Home Entertainment business climbed 19.6% to Rs 1,537 crore. EBITDA margin, however, softened to 11.7% from 14.2% a year ago, hurt by higher input costs, rupee depreciation and channel investments. PAT fell 8% year on year to Rs 693 crore, though it surged sharply from the prior quarter on a low base.

What Drove Growth

The company’s growth story is being led by a broadening premium mix. RACs, premium appliances and large-screen TVs all contributed meaningfully to the quarter’s momentum, with demand improving further in April and May as heatwave conditions boosted cooling-product sales. The RAC segment was especially noteworthy, with LG crossing 1 million AC sales in the quarter for the first time. Management also pointed to low industry penetration of around 13%, which leaves ample room for long-term expansion. In plain terms, the category still has a long runway, and LG wants to keep widening its lead.

Premiumisation Takes Center Stage

Premiumisation remains the most important strategic lever in the story. The company is seeing strong traction in OLED TVs, 55-inch-and-above televisions, front-load washing machines, side-by-side refrigerators and premium RACs. Within premium categories, French-door refrigerator share rose from 5% to 14%, while 55-inch-plus TVs expanded about 47% year on year and now account for roughly 49% of TV sales. Dishwashers doubled year on year, pushing LG to the No. 2 spot in that segment. This is not just volume growth; it is value-rich growth, and that matters for both margins and brand strength.

Margins Under Pressure

The pressure point in the quarter was profitability. EBITDA declined 10% year on year to Rs 945 crore, as higher promotional spending, rupee depreciation and compliance costs squeezed operating margins. Raw material costs climbed 11%, while other expenditure rose 17%, leaving EBITDA margin at 11.7%, down 242 basis points from last year. Management expects this stress to ease as pricing actions filter through, localisation improves and operating leverage kicks in. ICICI Securities expects margins to recover in FY27, with the company targeting early double-digit EBITDA margins.

Exports And Expansion

LG is increasingly positioning India as a manufacturing and export hub under its “Global South” strategy. The company aims to lift export contribution from about 6%–7% currently to the mid-teens over the next few years, helped by wider product categories and larger geographic reach. Its Rs 5,000 crore Sri City expansion is central to that ambition, with the first RAC line expected by Q4FY27 and compressor production from Q3FY27. The new facility should strengthen production flexibility, improve supply-chain efficiency and deepen export capability. That gives the investment case a longer-duration growth story beyond domestic demand alone.

Financial Outlook

The brokerage’s numbers suggest a temporary dip in FY26 before a stronger rebound. Net sales are projected at Rs 27,999 crore in FY27E and Rs 31,311 crore in FY28E, while EBITDA is expected to rise from Rs 2,408 crore in FY26 to Rs 3,912 crore in FY28E. Net profit is estimated at Rs 2,062 crore in FY27E and Rs 2,703 crore in FY28E, with EPS rising to Rs 39.8. That implies improving efficiency and better earnings visibility as the business scales. The valuation framework remains demanding, but not unusual for a premium consumer durable franchise with growth visibility.

Levels For Investors

ICICI Securities’ stated target is Rs 1,800, which doubles as the key near-term upside marker for investors. On the downside, the current market price of Rs 1,545 becomes the immediate reference point, and sustained weakness below that level would suggest fading momentum. The brokerage values the stock at 45x FY28E earnings, reflecting confidence in premiumisation, exports and margin recovery. Investors tracking levels may watch Rs 1,600 as a psychological near-term pivot, Rs 1,800 as the official target, and any decisive move above that as a sign the market is beginning to price in the FY27–FY28 earnings ramp more aggressively.

Risks To Watch

The key risks remain straightforward: intensifying competition, higher raw material prices and dependence on the parent for R&D support. Currency volatility is also important because rupee weakness can pressure input costs before localisation benefits fully arrive. Still, the brokerage argues that LG is better placed than many peers because of its brand strength, distribution depth and manufacturing scale. For now, the story is not about flawless execution; it is about a high-quality franchise navigating a noisy operating environment without losing its strategic edge.