Avendus has initiated coverage on LG Electronics’ India-listed arm with a reduce rating and a target price of ₹1,536 per share, cautioning that competitive intensity in the consumer durables market could challenge the company’s dominant position in premium and super-premium categories. The brokerage noted that LG continues to retain one of the most extensive distribution and service networks in the country, which remains a key structural moat even as consumer choices widen.
According to Avendus, LG’s strong in-house manufacturing capabilities and a planned third manufacturing facility position it to cater more effectively to south India, support export ambitions and reduce logistics costs. However, the brokerage said the company’s bargaining power is moderating as newer entrants aggressively target categories where LG has historically enjoyed greater brand strength.
Avendus expects the company to face selective market share erosion and revenue headwinds in niche high-end segments as competition scales up. The brokerage added that while LG’s operational depth and reach remain meaningful advantages, the near-term trajectory may be pressured by both pricing dynamics and a shifting consumer preference landscape.
The coverage launch with a reduce rating reflects Avendus’ view that the stock’s valuations do not fully account for these competitive challenges despite LG’s solid execution capabilities and long-term franchise strength.
Disclaimer: The views and recommendations above are those of Avendus. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
