Axis Securities has maintained its BUY recommendation on LG Electronics India Ltd with a target price of Rs 1,815, implying a potential upside of nearly 22% from the current market price of Rs 1,490. The brokerage believes LG Electronics India is entering a structurally stronger growth phase, supported by deeper localisation, aggressive export expansion, premium product demand, and manufacturing scale-up initiatives. Despite near-term margin pressure caused by commodity inflation and currency volatility, the company’s long-term earnings outlook remains robust due to expanding market leadership across air conditioners, refrigerators, washing machines, and televisions.

Axis Securities Reaffirms BUY Call Amid Strong Growth Visibility

LG Electronics India continues to consolidate its dominance in India’s consumer durable market, and Axis Securities believes the company remains strategically positioned to outperform the broader industry over the medium term. The brokerage retained its valuation multiple of 44x FY28 estimated earnings and maintained its target price of Rs 1,815 per share following the company’s Q4FY26 earnings announcement.

The brokerage highlighted that LG’s strongest competitive advantages remain its premium product positioning, deep brand recall, expansive dealer network, and increasing penetration across Tier-2 and Tier-3 markets. Premium categories such as OLED televisions, French-door refrigerators, and energy-efficient air conditioners continue to witness accelerating demand, helping improve overall product mix and profitability.

Q4FY26 Performance Reflects Resilient Consumer Demand

LG Electronics India delivered its highest-ever quarterly revenue during Q4FY26, showcasing sustained demand momentum across categories despite a volatile consumption environment.

The company reported consolidated quarterly revenue of Rs 8,054 crore, registering an 8.1% year-on-year increase. Revenue remained broadly in line with Axis Securities’ expectations. EBITDA stood at Rs 945 crore, down 10.4% YoY, while EBITDA margins contracted by 242 basis points to 11.7%. Profit after tax came in at Rs 693 crore, reflecting an 8% decline compared to the previous year.

Axis Securities noted that revenue growth was primarily driven by robust traction in the Home Appliances and Home Entertainment segments. The Home Appliances division posted 6% growth, while the Home Entertainment segment surged 20% YoY due to strong event-led television demand.

Export Expansion and Localisation Become Core Strategic Drivers

One of the biggest long-term catalysts identified by Axis Securities is LG’s localisation strategy, which is expected to materially improve profitability and reduce import dependence over the next several years.

The company plans to invest nearly Rs 5,000 crore in its upcoming Sri City manufacturing facility. This plant is expected to become a critical export and production hub for room air conditioners and compressors. Compressor production is scheduled to commence in Q3FY27, while RAC production is expected to begin in Q4FY27.

Localisation levels already improved to 55.2% during FY26, and management aims to enhance localisation by another 1–2 percentage points annually. This strategy is expected to shield margins from foreign exchange fluctuations while strengthening supply-chain efficiency.

Export growth is also becoming increasingly meaningful for the company’s earnings profile. LG currently exports premium refrigerators, front-load washing machines, and Essential Series products to 22 countries. Axis Securities believes the export-led operating leverage could significantly improve margin stability over the medium term.

Premiumisation Trend Continues to Support Margin Expansion

LG Electronics India is rapidly benefiting from India’s ongoing premiumisation cycle, particularly in white goods and consumer electronics.

The brokerage pointed out that French-door refrigerators witnessed a substantial jump in market share, rising from 5% to 14% by March 2026. Simultaneously, Essential Series products recorded strong traction across semi-urban and emerging markets, with quarterly sales touching nearly 1 lakh washing machines and 80,000 refrigerators.

Management also highlighted strong momentum in new categories such as:

• Dishwashers
• Chest freezers
• Fixed-speed ACs
• Large-capacity refrigerators
• Commercial air-conditioning solutions
• Information display systems

Axis Securities believes these adjacent categories could create additional high-margin revenue streams and diversify the company’s earnings profile over time.

FY27 Guidance Suggests Strong Earnings Recovery Ahead

Management remains optimistic about FY27 growth prospects, supported by favourable summer demand, low AC penetration levels in India, and increasing consumer preference for energy-efficient appliances.

LG Electronics India expects mid-teen revenue growth during FY27 while targeting early double-digit EBITDA margins. The company also crossed the milestone of selling more than 1 million room air-conditioner units during Q4FY26, reflecting strong market demand during the heatwave-driven season.

The company’s balance sheet also remains healthy, supported by a strong cash position of approximately Rs 4,476 crore, giving management substantial flexibility for future expansion initiatives.

Key Risks Investors Should Monitor

Despite the optimistic outlook, Axis Securities highlighted several risks that could impact future performance.

The most significant concern remains intensifying competition from Chinese consumer durable brands, which continue to expand aggressively through competitive pricing and rapid product launches. Additionally, raw material inflation and supply-chain disruptions could pressure operating margins in the near term.

The brokerage also pointed to LG Electronics India’s dependence on its parent entity for branding, royalties, and technological support. Any adverse change in that relationship could negatively affect the company’s operations and profitability.

Valuation Outlook Remains Constructive

Axis Securities believes LG Electronics India offers a compelling long-term consumption play within India’s expanding premium appliance market.

The brokerage maintained its BUY recommendation with a target price of Rs 1,815, based on 44x FY28 estimated earnings. Given the company’s manufacturing expansion, export ambitions, premiumisation strategy, and strengthening localisation profile, Axis Securities sees meaningful long-term earnings visibility despite near-term operational volatility.