LG Electronics India (LGEL IN) – Visit Update – Growth momentum intact driven by premiumization – BUY
Published on 19 Mar 2026
We recently visited LGEL’s Pune plant in Maharashtra. The management indicated steady demand momentum led by RACs, with premium-led value growth and entry-level segments supporting volumes. RAC inventory normalized in Q3FY26, but Q4FY26 performance remains contingent on summer intensity.
The company is strengthening its portfolio through localization and exports, with component manufacturing for washing machines commencing at Noida and exports targeted to reach ~12% of revenue by FY27. Pune plant remains focused on premium products, while Noida plant caters to the mass and essential segments.
Price hikes (7-10% in RACs; ~2% in refrigerators and washing machines), along with higher localization and limited outsourcing, are expected to support margins. Sri City expansion will enhance southern reach and improve logistics efficiency, supporting long-term growth.
We tweak our FY27/28 earnings estimate and maintain ‘BUY’ rating, with revised TP of Rs1,813 (earlier Rs1,808) based on 45x FY28 EPS. We estimate FY26-28E revenue/EBITDA/PAT CAGR of 11.5%/24.2%/21.1%.
