LGEINDIA

LG Electronics India Limited (LGEIL) celebrated a major milestone with its successful initial public offering, receiving bids worth INR 4.4 lakh crore and achieving 54x subscription, the highest in India's IPO market since 2008. This strong participation from local shareholders reinforces the company's identity as an India-rooted and national corporation. The IPO was not just a financial event but a moment of pride, reflecting deep trust placed in the company.

LGEIL's long-term strategic direction is centered on 'Make for India,' 'Make in India,' and 'Make India Global.' The 'Make for India' initiative focuses on creating products tailored for Indian lifestyles, exemplified by the newly launched LG Essentials series for aspirational and first-time buyers. 'Make in India' involves expanding manufacturing footprint, while 'Make India Global' leverages India's productivity for LG's Global South strategy, with exports contributing 5-6% of revenue in H1 FY26, up from 6% in FY25.

In Q2 FY26, LGEIL delivered a resilient performance with revenue from operations of INR 61.74 billion, marking a 1.0% year-on-year growth over INR 61.14 billion in Q2 FY25. However, EBITDA for the quarter was INR 5.48 billion, with a margin of 8.9%, down from 12.4% in Q2 FY25. This margin impact was attributed to rising commodity prices and incremental investments in festive go-to-market initiatives, alongside temporary deferrals of purchases due to GST rate cut timing. Net profit stood at INR 3.89 billion with a 6.2% margin.

The Home Appliance and Air Solution segment reported INR 39.48 billion in revenue, with an EBIT margin of 8.2%. The Home Entertainment segment recorded INR 22.6 billion in revenue, a 3% YoY increase, with an EBIT margin of 12.6%. Despite challenging conditions, LGEIL improved its market share, maintaining leadership in washing machines (33.4%), refrigerators (29.9%, +1% YoY), RAC (17.4%, +0.5% YoY), and premium OLED TVs (62.6%, +4.2% YoY). The company's brand strength is at its peak, creating significant gaps with competitors.

LGEIL is expanding its manufacturing footprint with a third factory in Sri City, Andhra Pradesh, involving a total investment of INR 5,000 crore over four to five years, funded by internal accruals at INR 1,000-1,200 crore annually. The facility will significantly boost production capacity, improve logistics, and strengthen the supply chain. Room air conditioners are expected to be operational by October 2026, followed by the aircon compressor line in Q4 FY27, with the plant fully operational by FY29, doubling capacity.

The company's localization rate increased to 55.8% in Q2 FY26, with a target to reach 70% in the next three to four years by localizing glass items, resins, raw materials, and in-house production of compressors and sub-assemblies. This effort is expected to improve margins by mitigating FX impacts (estimated 3-4%) and duties. Post-GST rate cut normalization, LGEIL implemented price increases of 1.5-2% for washing machines and refrigerators and rationalized promotional intensity to support margin recovery.

The B2B business currently contributes roughly 6% of total sales, primarily driven by HVAC and information display panels. While this segment faced pressure from U.S. tariffs and geopolitical issues, leading to low-infra spending, management expects momentum to return as micro conditions stabilize. LGEIL is also focusing on additional revenue sources like Annual Maintenance Contracts (AMC) and tapping into the data center cooling market, leveraging India's IT capabilities, which offer high growth potential and better margins.