ET Intelligence Group: LG Electronics India (LGEI), a home appliances and consumer electronics manufacturer, plans to raise ₹11,607 crore through an offer for sale. The promoter stake will fall to 85% after the IPO from 100%. The company's revenue, Ebitda and Ebitda margin are higher than peers. In addition, its return on net worth for FY25 at 37.1% stands out compared with 9-19% for peers. The IPO valuation also looks attractive. Given these factors, investors may consider the IPO with a long-term view.
Business
LG Electronics India, incorporated in 1997 as a wholly owned subsidiary of Korea's LG Electronics, has been a leader in terms of market share by revenue in major home appliances and consumer electronics excluding mobile phones, according to Redseer, a management consultancy. It estimates the Indian consumer durables sector excluding mobile phones to grow 14% annually between CY24 and 29, which augurs well for LGEI.
It has manufacturing facilities in Noida and Pune with capacity utilisation of 81% and 73%, respectively. The company is setting up a new manufacturing unit in Andhra Pradesh, which is expected to become operational by FY27, initially focusing on the production of air conditioners and air conditioner compressors, followed by the manufacturing of washing machines and refrigerators in the future. It also exports products to 47 countries across Asia, Africa and Europe, as of June 2025.
Financials
The company's revenue and net profit grew 10.8% and 28% annually between FY23 and FY25 to ₹24,366.6 crore and ₹2,203.4 crore respectively. The operating margin before depreciation and amortisation (Ebitda margin) increased to 12.8% in FY25 from 9.5% in FY23. The company pays royalty to the parent for the brand name, which has remained below 2% in each of the three years to FY25. Companies typically pay 2-3% royalty to parents.
Valuation
The company demands a price-earnings multiple of 35, significantly lower than 48-65 for peers including Whirlpool of India, Havells India, Voltas and Blue Star.
Business
LG Electronics India, incorporated in 1997 as a wholly owned subsidiary of Korea's LG Electronics, has been a leader in terms of market share by revenue in major home appliances and consumer electronics excluding mobile phones, according to Redseer, a management consultancy. It estimates the Indian consumer durables sector excluding mobile phones to grow 14% annually between CY24 and 29, which augurs well for LGEI.
It has manufacturing facilities in Noida and Pune with capacity utilisation of 81% and 73%, respectively. The company is setting up a new manufacturing unit in Andhra Pradesh, which is expected to become operational by FY27, initially focusing on the production of air conditioners and air conditioner compressors, followed by the manufacturing of washing machines and refrigerators in the future. It also exports products to 47 countries across Asia, Africa and Europe, as of June 2025.
Financials
The company's revenue and net profit grew 10.8% and 28% annually between FY23 and FY25 to ₹24,366.6 crore and ₹2,203.4 crore respectively. The operating margin before depreciation and amortisation (Ebitda margin) increased to 12.8% in FY25 from 9.5% in FY23. The company pays royalty to the parent for the brand name, which has remained below 2% in each of the three years to FY25. Companies typically pay 2-3% royalty to parents.
Valuation
The company demands a price-earnings multiple of 35, significantly lower than 48-65 for peers including Whirlpool of India, Havells India, Voltas and Blue Star.
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