LG Electronics shares jump 6% to hit record high; what's fuelling the rise?

Shares of LG Electronics India Ltd surged 6.14 per cent to hit a record high of Rs 1,825 in Monday's trade, snapping a two-session decline.

The rise comes as select brokerages retained a positive view on the consumer electronics maker. Motilal Oswal Financial Services (MOFSL), in a recent report, estimated double-digit growth for the company's TV, washing machine and AC segments in the second quarter (Q2 FY27), while refrigerator growth could be in the low single digits.

The brokerage expects margins to improve year-on-year (YoY), supported by a richer product mix, premiumisation and higher localisation.

MOFSL also noted that LG Electronics has announced a 5-6 per cent price hike for air conditioners, effective October 1, to mitigate higher input cost pressure. It said no price hikes have been announced so far in other product categories, where prices are expected to remain largely stable.

"New product launches and increasing SKUs in the value-driven essential series should support portfolio expansion and market penetration," MOFSL added.

Over the medium term, the brokerage sees localisation, capacity at Sri City, B2B expansion and exports as additional growth levers. At Sri City, compressor production is expected to commence in Q3 FY27, followed by AC manufacturing in Q4 FY27 and washing machine and refrigerator production over the subsequent 18 months, it also said.

MOFSL estimates LG Electronics' revenue, EBITDA and PAT to clock CAGRs of around 14 per cent, 24 per cent and 25 per cent, respectively, over FY26-29. It reiterated its 'BUY' rating with a target price of Rs 2,080, based on 45 times September 2028 estimated EPS.

Separately, Nuvama Institutional Equities also expects LG Electronics to post another strong quarter relative to peers, driven by growth in TVs and washing machines, along with price actions to offset cost inflation. It remains among Nuvama's preferred consumer plays, with a target price of Rs 1,990.

JM Financial expects Q2 FY27 revenue to grow 15 per cent YoY to Rs 7,100 crore, primarily driven by the home appliances business. It estimates EBITDA margin at 9.5 per cent, compared with 8.9 per cent a year earlier, with EBITDA at Rs 680 crore and PAT at Rs 480 crore.

Technical view

Religare Broking said, "The stock has witnessed a multi-month breakout, surpassing its listing peak and entering fresh record high territory. One can accumulate the stock within the Rs 1,780-1,806 range, expecting an upside target of Rs 2,090 over two to four weeks. Keep a stop loss placed at Rs 1,640."