LGโ India โฃSurpasses Parent Company in Valuation Following Record-Breaking IPO
MUMBAI: LG India has rapidly ascended to become a $13 billion entity, exceeding the valuation of itsโ South koreanโ parent company following a blockbusterโ debut on the Indian โคstock market. The initial โpublic offering (IPO) sparked a frenzy of investor confidence, accompanied by a record eight ‘buy’ ratings from leading brokerages within โhours of listing.
The surge โคreflects optimism surrounding LG โคIndia’s strong fundamentals and โฃthe โฃgrowth potential of India’s consumer durables sector. Over the past three decades, LG has established a leading โfranchise in key appliance categories, leveragingโค global research and growth, brand recognition, and efficient execution. Analysts projectโฃ a robust 13% revenue CAGRโข and 14% EPS CAGR over FY26-28.
Emkay โGlobal Financial Services initiated coverage with the highest โprice target of Rs โ2,050, representing an 80%โ upside. “LG has,โข over the last three decades,โฃ built a formidable โfranchise, leading in key large appliance categories with premium positioning, leveraging itsโ global R&D strength, brand power, andโ superior execution,” Emkay analysts stated.
Nomura forecasts a post-tax โROE/ROIC of 31%/56% in FY28F, alongside EBITDA margin expansion from 12.8% in โคFY25 to approximately 14.1% in FY28F. ICICI Securities highlighted LG’s “commanding โฃmarketโ position” and core return on equity exceeding 90% when adjusted โfor cash and other income.
Further โbullish assessments came from โPrabhudas Lilladher (target Rs 1,780), Ambitโ Capital โ(Rs 1,820), Motilal Oswal (Rsโฃ 1,800), Antiqueโ Stock Broking (Rs โฃ1,725), and equirus Securities (Rsโฃ 1,705). Common themes among analysts include LG’s dominance in the premium segment, growth opportunities stemming from low market penetration, strong return ratios, and increasing โคstrategic importance to its korean parent.
India’s contribution toโ the parent company’s revenue has steadily increased, rising from 3.5% โฃin CY21 to 4.3% in CY24, according to ICICI Securities. Under LG’s “Global South” strategy, Indiaโข is projected โto contribute one-third of the company’s global growth over the next five years. Ambit โคCapital โanticipates exports to increase โfrom 6% toโ 10% by FY28, driven by a doubling of capacity at the Sri City plant.