LG Electronics share price extends gains a day after blockbuster listing. Should you buy, sell, or hold?

LG Electronics India share price: Shares of LG Electronics extended gains for the second consecutive day on Wednesday, October 15, a day after a robust listing. The home appliances and consumer electronics seller stock rose as much as 1 per cent to ₹1708.35.

LG Electronics stock made a bumper stock market debut on Tuesday, listing at a 50 per cent premium over the IPO price. The stock got listed at ₹1715 on the BSE and at ₹1,710.10 on the NSE.

LG Electronics IPO was entirely an offer for sale of 10.18 crore shares, with a price band fixed at ₹1,080 to ₹1,140 per share.

LG Electronics’ ₹11,607 crore IPO became the most oversubscribed public offering in the Indian stock market, attracting bids totalling nearly ₹4.5 lakh crore.

The segment reserved for qualified institutional buyers (QIBs) was massively oversubscribed at 166.51 times, while the non-institutional investors’ portion saw 22.44 times subscription. The retail individual investors (RIIs) category received 3.54 times subscription.

LG Electronics share price: Should you buy, sell or hold?

Brokerage firm Motilal Oswal initiated coverage on LG Electronics stock ahead of the listing with a ‘buy’ rating and a target price of ₹1,800 apiece, implying 58 per cent upside potential.

“We initiate coverage on LGEIL with a BUY rating and a TP of INR1,800, premised on 40x FY28E EPS. LGEIL should trade at a higher multiple, given the strong return ratios, higher OCF conversion and a strategic focus on localisation.”

Meanwhile, brokerage firm Emkay Global Financial Services sees an upside potential of over 20 per cent from current levels. The brokerage firm assigned a ‘buy’ rating with a target price of ₹2,050 in its coverage initiation report yesterday.

“Following a relatively muted ~6% EPS CAGR over FY19–26E, we expect a growth revival, with revenue/EPS CAGR of ~13/14% over FY26E–28E on the back of stable margins (~13%) and a net-cash B/S, leading to robust return ratios (32% RoE /44% RoCE), and an FCFE yield (basis sales) of ~7.6% by FY28E. We believe LG deserves a premium multiple given its diversified category leadership and renewed focus on growth via masspremium product expansion, coupled with high RoEs (~31-33% over FY26E-28E) vs peers like Havells (~14-20%) and Blue Star (~18-21%) justifying a ~50x multiple,” it said.

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