Morgan Stanley sees multi-year growth runway for LG Electronics as it initiates coverage; stock jumps 3%

Shares of LG Electronics India rose as much as 3.3% to Rs 1,678 on Wednesday after Morgan Stanley kicked off coverage with an overweight rating and a forward-leaning view that the company “stands out across many categories in a highly competitive consumer durables market with industry-leading margins and best-in-class capital efficiencies.”

The brokerage set a target price of Rs 1,864, implying room for further gains in a stock that has already delivered a volatile, but resilient, post-listing run.

Morgan Stanley’s initiation argued that the next leg of growth will be shaped by new manufacturing capacity and a rising contribution from exports and B2B operations. It expects revenues and margins to be supported by these shifts, even as it forecasts earnings to drop 9% year-on-year in FY26, led primarily by the air-conditioner segment.


The brokerage projected a 16% earnings CAGR over FY26–28 and said it valued LG Electronics India by applying a 50x price-earnings ratio on September 2027 earnings estimates.

Shares steady after choppy debut

The stock has seesawed since its October 14 debut, listing at around Rs 1,710–1,715, a 50% premium to its issue price of Rs 1,140, before briefly touching Rs 1,749 and pulling back. As of Wednesday, the stock is still as much as 47% above the IPO price despite bouts of volatility.

Earlier this week, Motilal Oswal maintained its constructive stance, noting that “margin recovery will be led by localisation and premium mix” as it reaffirmed a buy call with a target price of Rs 1,890.

While LG Electronics India reported a muted Q2 FY26, the brokerage highlighted the company’s category leadership and management’s pivot toward a “Make for India, Make in India, Make India Global” strategy as it strengthens its premium lineup, expands B2B offerings, and ramps up new capacity.

Also read | LG Electronics India shares may rally up to 17%, Motilal Oswal says flagging margin comeback, other triggers

While the near-term earnings dip flagged by Morgan Stanley reflects pressure in the AC business, both brokerages expect medium-term expansion in margins and a steadier earnings trajectory as the company deepens localisation, scales its Sri City plant, and pushes into exports and B2B channels.