UBS Initiates Buy on LG Electronics, Blue Star; Havells Cut to Neutral: What Should Investors Know?
Whether it is peak summer or the festive season, every household has to decide on buying an AC, fridge, washing machine or electrical goods. That same sector is now the talk of Dalal Street. On October 9, 2026, global brokerage UBS gave separate calls on three major consumer durable companies. It initiated coverage on LG Electronics India and Blue Star with a "Buy" rating, while cutting Havells India's rating to "Neutral".
UBS Targets at a Glance
| Company | UBS Rating | Target Price | Potential Upside |
|---|---|---|---|
| Blue Star | Buy (initiation) | ₹2,000 | About 31.5% |
| LG Electronics India | Buy (initiation) | ₹2,100 | About 22% |
| Havells India | Neutral (downgraded from Buy) | ₹1,200 (earlier ₹1,440) | About 15.3% |
The upside figures are calculated on the previous closing price. LG closed at ₹1,723.10, Blue Star at ₹1,520 and Havells at ₹1,040.
LG Electronics India: Faith in a "Premium Franchise"
UBS has given LG Electronics India a "Buy" rating with a target of ₹2,100. (Source: Trade Brains) The company makes products such as TVs, refrigerators, washing machines, ACs and microwave ovens. According to UBS, the company has a strong business model, and its premium product range can help it benefit from rising demand.
The report lists four growth engines: premiumisation, localisation, exports and expansion into new product categories.Because of these, the brokerage has called LG a "structural compounder", meaning a company that can keep growing steadily over a long period.
In simple terms, premiumisation means customers are buying costlier models with better features, which carry higher margins for the company. Localisation, that is, making parts and manufacturing in India, lowers costs. UBS argues that both can improve margins. According to the report, the target price may also not fully capture the company's future growth.
Jefferies' earlier report on this sector is also worth a look. It had set a target of ₹1,895 for LG and noted that LG was trading at around 45 times one-year forward earnings, compared with 43-47 times for Voltas and Blue Star. Jefferies had flagged demand slowdown, delays at the Sri City plant, loss of market share, and raw material and rupee volatility as risks. (Source: Jefferies report, via inkl) In other words, expectations of rapid growth are already largely visible in the price.
Blue Star: Highest Upside, and a Data Centre Story
Among the three, Blue Star has the highest potential upside. UBS has set a target of ₹2,000, about 31.5% above the previous close of ₹1,520.
Blue Star is not just a home AC company. It also operates in commercial air conditioning, chillers, cold storage and commercial refrigeration, and does MEP (mechanical, electrical and plumbing) project work. UBS believes MEP demand from data centres, manufacturing plants and commercial buildings can support the company. The brokerage also counts rising demand for residential and commercial cooling, along with services and exports, among its long-term opportunities.
One thing to keep in mind here: Blue Star's business depends on both weather and infrastructure investment. A weak summer or delays in projects could show up in earnings. This remark is not a claim from any report but general sector understanding.
Havells: Why Was the Rating Cut?
The biggest change came in Havells India. UBS cut the rating from "Buy" to "Neutral" and lowered the target from ₹1,440 to ₹1,200. (Source: Zee Business) According to the report, the reasons are:
A tough road to margin improvement. The brokerage does not expect a clear margin recovery in the near term.
Doubts over the "sell-out" strategy. Havells is focusing on increasing sales to the end customer. UBS is not convinced this strategy will improve margins, as feedback from distribution channels has been underwhelming.
Persistent underperformance and capital allocation. UBS says the stock's low valuation may reflect long-term challenges rather than just a temporary slowdown.
Note that Neutral does not mean "sell". UBS still has a target implying about 15.3% upside. The difference is simply that the brokerage no longer sees as strong a case here as in the other two.
Market Reaction
On October 9, consumer durable shares were mostly trading higher. LG Electronics India rose about 1.67%, while Crompton Greaves Consumer Electricals gained 1.54%. On Groww the same day, Blue Star was at ₹1,548.90 (+1.97%) and Havells at ₹1,036.80 (+1.28%). So despite the downgrade, Havells did not see a sharp fall that day.
So, Which Is Better?
From UBS's point of view, the order from top to bottom is Blue Star, LG Electronics and then Havells. But the upside figure does not tell the whole story. The case for LG rests on its premium brand and margin expansion, for Blue Star on commercial and data centre demand, while for Havells it is about waiting for margin improvement. Investors should also consider their own risk appetite, investment horizon and valuation.
What Will Matter Next?
- Margin numbers from all three companies in the upcoming quarterly results
- Demand for durables during the festive season
- The pace of Blue Star's MEP orders and data centre projects
- Signals from Havells' distribution channels
Sources: UBS report , Jefferies report , Groww.
Disclaimer: This article is informational content based on brokerage reports and is not investment advice. The ratings and target prices are UBS's, not ours. Investing in the stock market involves risk, so consult a SEBI-registered advisor before investing.
