Goldman Sachs initiates coverage on LG Electronics India with Buy rating. Check target price and upside scope

Shares of LG Electronics India will be in focus in trade on Wednesday, February 18, after Goldman Sachs initiated coverage on the stock with a Buy rating, citing robust growth prospects in the coming quarters.

With a target price of Rs 1,750, the international brokerage implies an upside of around 15% from current market levels. The brokerage highlighted the company’s leadership across key categories and its strong premium positioning, which it believes will drive faster-than-industry growth amid rising incomes and increasing product penetration.

It also pointed to LG’s track record of innovation and its Global South strategy as factors that could support exports and scale. While rising competitive intensity and an uptick in commodity prices may limit margin expansion, Goldman Sachs believes LG Electronics India Ltd deserves a premium valuation within the consumer durables space. Its leadership in relatively under-penetrated categories, strong R&D support from the parent to stay ahead on innovation, established brand strength and incremental growth opportunities from the B2B segment underpin this view. The brokerage values the company at 44x FY28E EPS.

LG Electronics Q3 snapshot

LG Electronics India reported a sharp 61% year-on-year (YoY) decline in third-quarter profit, impacted by higher operating expenses despite some easing in input costs.

The company posted a consolidated net profit of Rs 89.7 crore for Q3FY26, compared with Rs 320 crore in the same quarter last year. Revenue from operations fell 6% YoY to Rs 4,114 crore. On a sequential basis, revenue declined sharply from Rs 6,174 crore reported in Q2FY26.

Total income for the quarter stood at Rs 4,190 crore, down from Rs 4,474 crore a year ago. Profit before tax (PBT) came in at Rs 151 crore, significantly lower than Rs 320 crore in Q3FY25. Total expenses were reported at Rs 4,038 crore versus Rs 4,153 crore in the year-ago period. Cost of materials consumed remained the largest expense component at Rs 2,988 crore, slightly higher than Rs 2,929 crore last year, while elevated operating expenses weighed on overall profitability.

Commenting on the outlook, Managing Director Hong Ju Jeon said the company is preparing to tap into the upcoming seasonal demand. He noted that with the onset of summer, LG is positioned to benefit from demand for compressor-based products through a dual strategy of expanding its premium portfolio and strengthening the ‘LG Essential’ range. He also highlighted a focus on scaling the higher-margin AMC business and leveraging B2B infrastructure opportunities.

Jeon added that rationalisation of US tariffs could further support the company’s “Make India Global” strategy by optimising production for domestic demand while enhancing export opportunities.

LG Electronics India shares have risen 13% over the past month.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)