LGEINDIA

India Balances Weak Q3 with Expansion Plans

. reported a subdued Q3FY26 performance, with revenues declining 6.4% YoY to ₹99,754 crore and margins contracting due to raw material inflation, currency volatility, and higher festive-related investments. Despite near-term softness, LG maintained strong market leadership in key categories and is pursuing a dual strategy of expanding premium offerings while scaling its Essential line. Strategic capex in Sri City and rising localisation are expected to support long-term growth and margin recovery. Financial & Margin Performance - Revenue: -6.4% YoY, impacted by post-festive demand softness. - Operating margin: -290 bps YoY, due to copper/aluminium costs, FX volatility, and festive investments. - PAT margin: -310 bps YoY, hit by labour code exceptional item and tax settlement. - Company avoided aggressive price cuts to protect brand positioning. Home Appliances & Air Solutions - Revenue: -9.8% YoY, post-Diwali demand normalisation. - Market share leadership: - Washing machines: 33.4%. - Refrigerators: 30%, +50 bps YTD. - Room ACs: 17.3%. - Side-by-side refrigerators: 43.2%, +4.5% YoY. - EBIT margin: -310 bps YoY, pressured by commodity costs and compliance expenses. - Price hikes: +1.5–2% across refrigerators and washing machines. Home Entertainment - Revenue: +1.7% YoY, aided by GST cuts and Cricket World Cup demand. - TV market share: 27.3%, +70 bps YoY. - Premium segment: >42-inch TVs now 1/3rd of revenue; OLED share 62.4%, +2.7% YoY. - EBIT margin: -390 bps YoY, due to input costs and higher go-to-market spends. Strategic Expansion - New Sri City plant: ₹5,000 crore capex, RAC production from Oct’26, compressors FY27, other appliances thereafter. - Capacity expected to double by FY29; localisation to rise from 55% to 70%. - Exports: Currently 7% of revenue, targeted to double by FY27. Valuation & Outlook - Stock trades at 37x FY28E earnings, offering steady compounding potential backed by premiumisation, localisation, and brand leadership.