You could say LG Electronics India Ltd has found some new legs. The stock is 35.30 percent higher than what it was at the offering, and that’s even after a quarter where the margins were chipped away. The brokerages think there is still room to run. They point to the export side and the kind of visibility you get from capacity building as enough to make up for any cost headwinds and keep the earnings going.
Case in point: on May 25, 2026, the shares were up 3.2 percent in the afternoon to Rs 1,538.7. We saw them as high as Rs 1,542.40 for a bit, or 3.53 percent in the day. Of course, the counter had given back 2.6 percent on Friday when the numbers came out. Over the last 12 months it’s off some 9 percent, which is not bad considering the Nifty 50 has only dropped 4.1 percent.
Why the stock is moving up on a soft quarter
Q4 FY26 was a record for LGEL in terms of top-line. Operations brought in Rs 8,054 crore, an 8.1 percent jump from the year-ago figure of Rs 7,448 crore. You can thank the demand for the bigger TV sets, the French-door fridges, 5-star ACs and the fully automatic washers for that.
The bottom line is another story. Net profit was down 8.2 percent to Rs 693 crore. EBITDA was 9.8 percent lower at Rs 945 crore, with the margin coming in at 11.7 percent instead of 14.1 percent. A weaker rupee and the price of commodities didn’t help.
Nomura had put the consolidated revenue for the quarter at about Rs 8,050 crore, so the 8 percent growth is right where they thought it would be. But they did note the adjusted EBITDA margin of 11.7 percent was below their 13 percent call and the 12.3 percent the rest of the market was on. APAT was 8 percent in the hole year-on-year.
What the brokerages are saying
For the most part, the houses are in a constructive frame of mind. They’ll tell you the miss on margin is just a blip and the plan for growth is fine. Nomura sees the current 35x multiple on FY28F EPS as a good entry, with an EPS CAGR of around 32 percent through FY28 to be had if you look at the premium and export stories.
Key target prices at a glance
This is where we stand with the analysts on LGEL:
– Nomura: Buy, TP Rs 1,763; 40x P/E; some upside from the export side.
– MOFSL: Buy, TP Rs 1,750; 45x on FY28E; expect margins to even out.
– JM Financial: Buy, TP Rs 1,730; 45x on Mar’28E; Sri City is where it should be.
– Nuvama: Buy, TP Rs 1,820; has made a 4/3 percent trim to FY27/28E EPS.
– Elara Capital: Accumulate, TP Rs 1,750; the capex will show in FY28.
If you want some context on the valuation, MOFSL has it at 44x/38x for FY27/FY28E but is valuing it at 45x. Nuvama is seeing 47.4x/39.2x. And while Nomura has reined in its target to Rs 1,763 from 1,836, it’s still a 40x P/E and a Buy in their book.
Where the visibility is coming from
Then you have the execution on capacity, which is a big part of the bull case. JM says the work in Sri City is on schedule and they should be making compressors by Q3 of next year. They haven’t moved their EPS view and are sticking with a Buy at Rs 1,730.
Elara is looking at a sizeable Rs 5,000 crore in capex, some of it starting in Q4, which gives you a handle on FY28 revenues. Add in the export side and the kind of margins and returns they have, and it’s an easy call to reiterate an Accumulate with a 1,750 target.
The way the products are set up is also a plus. Between cost control, localisation and being efficient, management is trying to take the sting out of currency and raw material swings while they push the premium end of the business.
On the radar
Nomura thinks you’ll see some help from the season and from exports in the near term, and maybe some price increases here and there. The question is whether the margins come back after the letdown in March.
It’s been a resilient stock. After the dip on Friday, it was at Rs 1,538.7 on Monday, having been as high as 1,542.40. Since it was put on the board in mid-October at Rs 1,140, it’s up 35.30 percent. Market cap is in the neighbourhood of Rs 1.05 lakh crore.
So what do investors have their eyes on? Margin normalisation, the compressor build-out in Q3 and the capex from Q4. With a preponderance of Buys and one or two Accumulates, the Street is in a positive place, costs and all.
