LG Electronics India IPO Draws Strong ‘Subscribe’ Calls as Issue Priced at Big Discount to Peers

Mumbai: The upcoming ₹11,607-crore initial public offering (IPO) of LG Electronics India Ltd has generated rare consensus among market analysts — it’s being hailed as one of the most attractively priced big-ticket issues in recent memory. Despite leading the consumer durables industry across multiple product categories, LG’s IPO is coming to market at a steep discount compared to rivals like Havells India, Blue Star, and Voltas.

Attractive Valuation Sparks Investor Interest

At the upper price band of ₹1,140 per share, the issue values LG Electronics India at approximately ₹77,400 crore, translating to around 35 times FY25 earnings and 25 times EV/EBITDA.
In contrast, listed peers such as Havells, Blue Star, and Voltas trade at 63–68 times earnings, while Whirlpool of India commands multiples in the 40x range.

Brokerages including SBI Securities, Geojit, Choice Broking, Elara Capital, and Anand Rathi have issued ‘Subscribe’ or ‘Must Subscribe’ recommendations, citing undemanding valuation and strong fundamentals.

Financial Strength and Margin Leadership

Between FY23 and FY25, LG’s revenue grew at a CAGR of 10.8%, while EBITDA and PAT expanded 28% and 27.8%, respectively.
In FY25, the company reported:

• Revenue: ₹24,367 crore
• EBITDA: ₹3,110 crore
• Net Profit: ₹2,203 crore
• Operating Margin: 12.8%
• Net Margin: 9%

Those numbers comfortably outpace peers — Havells reported 9.8% EBITDA margin, Blue Star 7.3%, Voltas 7.2%, and Whirlpool around 7%.
The balance sheet remains virtually debt-free, with Return on Capital Employed (ROCE) between 42–50% and Return on Equity (ROE) near 37%, both well above industry averages.

Analyst View: “Highly Attractively Priced”

Elara Securities described the IPO as “highly attractively priced”, implying nearly a 50% discount to peers despite superior profitability and efficiency metrics.
Choice Broking and Geojit echoed similar optimism, emphasizing LG’s premium product mix, cash-rich balance sheet, and efficient working capital management.

Analysts attribute LG’s margin edge to its higher share of premium appliances, advanced technology features, and growing localization, which is expected to further enhance margins in the coming years.

Operational Scale and Market Dominance

LG Electronics India operates at a formidable scale, producing around 1.45 crore units annually across its Noida and Pune plants, running at nearly 84% capacity utilization.
The company also maintains India’s largest distribution and service network, spanning 35,000+ touchpoints, 1,000+ service centres, and a 13,000-member technical team.

LG commands leading market shares across key product categories:

• Washing Machines: 33.5%
• Refrigerators: 29.9%
• Panel Televisions: 27.5%
• Inverter Air Conditioners: 20.6%
• Microwaves: 51.4%

Such dominance, analysts say, ensures both pricing power and resilience across cycles.

Risks and Outlook

While the fundamentals appear robust, brokerages have flagged raw-material cost volatility as a key risk, with inputs historically accounting for 70–75% of total costs. A sharp rise in metal or semiconductor prices could pressure margins.

Nonetheless, analysts maintain that the issue’s pricing leaves ample margin of safety for investors, combining scale, profitability, and low leverage in a premium brand.

Valuation Takeaway

At 35x FY25 earnings, LG Electronics India’s valuation is well below the sector average of 60x, presenting a compelling entry point for long-term investors. With superior margins, high returns, and market leadership, the IPO offers a rare mix of growth and value in the consumer durables space.