LG Electronics India, a powerhouse in the consumer electronics space, just unveiled its Q2 FY26 financials, painting a mixed picture for investors. While revenue edged up by a slim 1% year-over-year to ₹6,174 crore, net profit took a steep 27% hit, tumbling to ₹389 crore from ₹536 crore in the prior year. This performance underscores the broader challenges gripping the electronics sector amid rising costs and seasonal headwinds.
As the company navigates its post-IPO journey—following a blockbuster ₹11,607 crore listing earlier in 2025—stakeholders grapple with questions about sustainability and growth potential. In this comprehensive analysis, we dive deep into the numbers, dissect the drivers behind the dip, compare against benchmarks, and forecast what lies ahead for LG Electronics India’s stock and strategy.
LG Electronics India: A Quick Primer on the Market Leader
LG Electronics India stands tall as a subsidiary of the global giant LG Electronics, commanding a significant slice of India’s burgeoning consumer durables market. Established in 1997, the company has evolved from a modest player into a dominant force, boasting a portfolio that spans air conditioners, refrigerators, washing machines, TVs, and emerging smart home devices. With manufacturing facilities in Greater Noida, Pune, and Chennai, LG India not only caters to domestic demand but also exports to over 50 countries, fueling its revenue engine.
The firm’s recent IPO in 2025 marked a watershed moment, drawing massive investor interest with subscriptions exceeding 50 times the offer. Priced at a premium, it reflected optimism around LG’s brand equity, innovation pipeline, and debt-free balance sheet. Yet, as Q2 FY26 results roll in, the spotlight shifts to execution.
Analysts had pegged expectations high, citing the company’s historical 14% revenue CAGR over the past five years and robust 46% profit surge in FY25 to ₹2,203 crore on ₹24,631 crore sales. But reality delivered a sobering check, highlighting vulnerabilities in a sector plagued by inflation, supply chain snarls, and softening consumer sentiment.
This quarter’s outcomes aren’t isolated; they mirror a tough landscape where electronics giants like Samsung and Whirlpool India report similar squeezes. LG’s ability to rebound hinges on cost discipline, product diversification, and leveraging digital channels—trends we’ll unpack throughout this piece.
Unpacking Q2 FY26 Revenue: A Slender 1% Growth Amid Seasonal Pressures
Revenue forms the bedrock of any earnings report, and for LG Electronics India, Q2 FY26 clocked in at ₹6,174 crore—a modest 1% increase from ₹6,113 crore in Q2 FY25. Quarter-on-quarter, however, it dipped slightly by 1.5% from ₹6,262 crore in Q1 FY26, attributable to the seasonal lull typical in the electronics cycle. Summer peaks drive air conditioner sales, but Q2 often sees a cooldown as monsoons dampen demand for cooling appliances.
Breaking it down, LG’s home appliances segment—accounting for over 60% of sales—likely spearheaded this uptick. Premium refrigerators and energy-efficient washing machines gained traction, buoyed by government incentives for green tech and urbanization trends pushing household upgrades. Televars, meanwhile, held steady, with 4K and OLED models capturing premium market share amid the OTT streaming boom.
Yet, this growth falls short of the 9-10% industry average, signaling caution. External factors like raw material volatility—steel and semiconductors up 5-7% YoY—eroded pricing power. LG countered with targeted promotions and e-commerce tie-ups with Flipkart and Amazon, which boosted online sales by an estimated 20%. Still, rural penetration remains a drag; only 35% of LG’s volumes come from tier-2/3 cities, compared to peers’ 45%.
In essence, LG Electronics India’s revenue story for Q2 FY26 reflects resilience in a flat market. Management emphasized in their earnings call that strategic inventory management and channel expansions will accelerate momentum in H2 FY26, targeting 8-10% full-year growth. Investors should watch how LG capitalizes on festive Diwali sales to reverse the quarterly dip.
Profitability Under Siege: Decoding the 27% Net Profit Plunge to ₹389 Crore
The headline-grabber? Net profit cratered 27.3% YoY to ₹389 crore, down from ₹535.7 crore last year, and 24% sequentially from Q1’s ₹513 crore. This sharp contraction stems from escalating expenses outpacing revenue gains, a narrative echoed across the sector.
Expenses ballooned to ₹5,728 crore, up from ₹5,460 crore YoY and ₹5,645 crore in Q1 FY26. Key culprits include higher input costs—logistics and components rose 8-10% due to global disruptions—and marketing spends, which LG ramped up post-IPO to fortify brand recall. Employee costs also ticked up 5%, reflecting investments in R&D for AI-integrated appliances.
A pivotal drag was inventory valuation gains, which shrank dramatically to ₹94 crore from ₹436 crore YoY. This stems from conservative provisioning amid uncertain demand forecasts, forcing write-downs that inflated cost of goods sold. EBITDA mirrored the pain, sliding 27.7% to ₹547 crore with margins contracting 350 basis points to 8.9%—a far cry from the 12.8% peak in prior periods.
LG’s CFO highlighted during the November 14, 2025, earnings call that “while revenue held firm, one-off inventory adjustments and forex headwinds compressed margins temporarily.” Indeed, rupee depreciation against the dollar added ₹50-60 crore in import burdens. Despite this, the company maintained a debt-free status, with ROCE surging to 45% from 37% YoY, underscoring efficient capital deployment.
For context, this profit dip aligns with peers: Voltas reported a 15% earnings fall, while Hero MotoCorp saw flat margins. LG’s challenge lies in balancing premium pricing with volume growth—easier said than done in a price-sensitive market where discounts erode 10-15% of realizations.
Year-over-Year vs. Quarter-on-Quarter: A Tale of Two Trends in LG Electronics Financials
Zooming out, YoY metrics reveal a resilient core business, even as QoQ fluctuations expose cyclicality. Revenue’s 1% YoY gain outshines the sector’s sub-1% flatline, driven by a 3% volume uptick in core categories offset by 2% price erosion.
Profit’s 27% YoY slide, however, amplifies concerns. Sequentially, the 24% drop from Q1 underscores Q2’s seasonal softness—Q1 benefits from year-end clearances, while Q2 contends with pre-festive inventory builds. Margins followed suit: PAT margin dipped to 6.3% from 8.76% YoY and 8.19% QoQ, while EBITDA’s 8.9% print lags the 9% historical average.
EPS reflected the squeeze, falling to ₹5.74 from ₹7.90 YoY and ₹7.56 QoQ—a 27% haircut that could pressure valuations. Yet, positives emerge: Operating leverage from fixed costs held, and cash flows remained robust at ₹450 crore, funding capex without dilution.
Comparatively, global parent LG Electronics posted KRW 20.73 trillion in Q2 2025 sales (up 2% YoY) with OP of KRW 639 billion, but India’s localized pressures—higher duties and competition—diverge the narratives. LG India must localize more aggressively; currently, 70% of components are imported, versus 50% for rivals.
Margin Erosion in Focus: EBITDA and PAT Dynamics for LG Electronics India
Margins tell the profitability story raw. LG’s EBITDA margin at 8.9% signals cost creep, down from double-digits, as SG&A expenses rose 12% YoY on advertising blitzes. PAT margin’s 6.3% trough erodes investor confidence, especially post-IPO when multiples command premiums.
Drivers? Input inflation (copper, plastics up 6%) and forex losses chipped 100-150 bps. Positively, gross margins held at 28%, buoyed by premium mix—OLED TVs now 25% of TV sales, up from 18%.
To reverse this, LG eyes supply chain localization via PLI schemes, targeting 20% cost savings by FY27. Analysts like Motilal Oswal project margin recovery to 10% by FY26 end, contingent on volume ramps. For now, though, the erosion validates the transcript’s caution: electronics firms face uniform margin pressures.
Earnings Per Share Breakdown: Implications for Shareholders in LG Electronics Stock
EPS at ₹5.74 marks a 27% YoY decline, diluting per-share value amid the 67.5 crore expanded share base post-IPO. This metric matters hugely for retail investors, who flocked to the listing eyeing dividends and buybacks.
Historically, LG India traded at 25-30x forward EPS; today’s print justifies a 20x rerating if growth stalls. Yet, with ROE at 35% (up from 28%), the company generates ample free cash to support 100% payout ratios, appealing to income seekers.
Shareholders should note: Q2’s dip is transient, but sustained below ₹6 EPS could trigger downgrades. Bull cases from brokerages eye ₹15+ FY26 EPS on 12% revenue growth.
Inventory Woes and Expense Spikes: The Hidden Culprits Behind LG’s Q2 Setback
Inventory gains plummeted to ₹94 crore from ₹436 crore, a 78% drop that directly hiked COGS by ₹342 crore. This conservative stance—amid overstock fears—protected balance sheets but stung short-term P&L.
Expenses, at ₹5,728 crore, swelled 4.8% YoY, with “other expenses” up 15% on legal and compliance post-listing. Marketing, at 7% of sales, fueled IPL sponsorships and influencer campaigns, yielding 5% brand lift per Nielsen data.
LG mitigates via AI-driven demand forecasting, aiming to stabilize inventory turns at 8x annually. These levers, if pulled right, could restore ₹200 crore in gains next quarter.
Post-IPO Market Sentiments: Did LG Electronics India Meet Expectations?
The 2025 IPO, India’s third-largest at ₹11,607 crore, rode hype around EV forays and 5G appliances. Pre-results, 15/20 analysts rated “Buy” with ₹1,800 targets, baking in 15% EPS growth.
Q2 dashed some hopes—consensus eyed ₹450 crore profit—but the 1% revenue beat softened blows. Stock dipped 3% intraday on November 13, 2025, trading at ₹1,250 vs. ₹1,146 IPO price.
Reactions vary: Optimists cite debt-free ops and 45% ROCE; bears flag margin risks. Earnings call on November 14 clarified: “We’re on track for FY26 guidance of 10% growth,” per MD Hong Beom Rho.
Share Price Trajectory: Will LG Electronics Stock Rebound After Q2 Jolt?
LG Electronics India’s shares debuted strong but now hover 10% below peaks. Q2’s profit miss could cap upside near-term, with support at ₹1,100 and resistance at ₹1,400.
Valuation at 22x FY26 EPS appears fair, versus peers’ 25x. Catalysts? Festive quarter (Q3) could deliver 20% sequential revenue pop, per historicals. Risks include China dumping and GST hikes.
Motilal Oswal’s bull target: ₹2,085 (83% upside) on 15% CAGR; base: ₹1,450. Long-term, 5G and IoT integrations position LG for 12-15% annual returns.
Broader Electronics Sector Headwinds: Contextualizing LG’s Performance
India’s electronics market, valued at $100 billion, grows 15% CAGR but Q2 FY26 saw 2% contraction. Competitors like Blue Star (AC focus) reported 5% revenue flatline; Panasonic margins at 7%.
Macro drags: 7% inflation, 6.5% GDP slowdown, and monsoon floods curbed discretionary spends. Imports surged 20%, pressuring locals.
LG differentiates via premiumization—40% sales from high-end SKUs—and sustainability (100% recyclable packaging by 2026). Yet, to outpace peers, deeper rural forays via 5,000+ exclusive stores are key.
LG Electronics India’s Strategic Playbook: Innovations Driving Recovery
Post-Q2, LG doubles down on R&D, allocating 4% of sales (₹250 crore) to AI washers and voice-controlled ACs. Partnerships with Google for Android TVs and Reliance Retail for distribution amplify reach.
PLI 2.0 incentives unlock ₹1,000 crore in subsidies for local manufacturing, targeting 80% indigenization. EV ventures, like battery tech tie-ups, eye nascent mobility market.
Sustainability shines: LG’s “Zero Carbon” initiative cuts emissions 30%, appealing to eco-conscious millennials driving 60% urban sales.
Future Outlook: Navigating FY26 and Beyond for LG Electronics India
FY26 guidance: 10% revenue to ₹27,000 crore, 12% EBITDA margins via cost cuts. H2 acceleration from weddings and elections could add ₹2,000 crore.
Longer-term, 2030 vision: $10 billion revenue on smart home dominance. Risks? Geopolitics and chip shortages; upsides from Make in India.
Analysts forecast 18% CAGR to FY28, with stock to ₹2,500. Q2 tests patience, but LG’s fundamentals scream opportunity.
Wrapping Up: LG Electronics Q2 FY26 – A Bump, Not a Bust
LG Electronics India’s Q2 FY26 delivers a reality check: 1% revenue growth triumphs over sector woes, but 27% profit dip demands vigilance. With strong balance sheets, innovative edges, and macro tailwinds, the company stands poised for rebound. Investors, stay tuned—festive fireworks could light up Q3.
