LGEINDIA Q3 FY26 earnings call.
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Revenue
₹4,114 Cr
verification pending
Revenue YoY
-6.4%
reported change
EBITDA
₹196 Cr
latest reported figure
Source
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record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
LG Electronics India reported Q3 FY26 revenue of INR 4,114 crore, down 6.4% YoY, as post-festive demand softened particularly in compressor-based products. EBITDA margin compressed to 4.8% from 7.7% in Q3 FY25, a decline of 290bps, driven by revenue softness impacting operating leverage, elevated copper and aluminum prices, forex headwinds, new labor code costs, and higher e-waste recycling obligations (70% target vs. 60% prior). Home appliance segment revenue fell to INR 2,788 crore from INR 3,091 crore; home entertainment grew 1.7% to INR 1,326 crore. Despite these headwinds, management highlighted YTD market share gains: washing machine 33%, refrigerator 30% (+0.5pp), room AC 17.3% (+4pp), side-by-side refrigerator 43.3% (+2.9pp), and OLED TV 62.4% (+2.7pp). Q4 guidance calls for double-digit revenue growth with mid-teen EBITDA margins, while FY27 targets double-digit revenue growth with margins returning to FY25 levels. Key risks include commodity inflation, FX volatility, and working capital build (INR 11.3 billion, up 39% YoY) ahead of the summer season.
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Guidance to track
- Management expects double-digit revenue growth in Q4 with EBITDA margins better than last year's Q4, targeting mid-teen digits, driven by seasonal recovery and new B-norm product launches.
- Full year FY26 guidance maintained at early single-digit revenue growth with double-digit EBITDA margin, despite Q3 being below internal targets.
- FY27 guidance is to deliver double-digit revenue growth and sustain early digit margins in line with FY25 levels, supported by premium launches, diversified portfolio, and export expansion.
- Management aims to double export sales from approximately $160 million (FY25 baseline) to $320 million in FY27, leveraging US tariff rationalization to 18% and India-EU FTA, primarily serving US and European markets.
Risks flagged
- Rising copper and aluminum prices continue to pressure margins. Combined with 7-10% price hikes required for new B-star ACs, there is risk of demand destruction if price increases are not fully absorbed by GST relief.
- Working capital increased 39% YoY to INR 11.3 billion, driven by incremental compressor inventory for summer season with new B-norms and extended payment terms to trade partners. This creates inventory risk if summer demand disappoints or B-norm transition is slower than expected.
- Analyst questioned sharp TV margin decline Y-o-Y and sequentially despite GST rate cut benefit. Management attributed pressure to chip and panel price inflation but declined to disclose import cost as percentage of BOM, limiting visibility into recovery timeline.
- E-waste recycling target increased to 70% for FY26-27 (from 60%) and 80% from FY28, creating incremental compliance costs. Management quantified incremental impact at 0.15% of revenue, but as volumes grow, this becomes a structural cost headwind.
Key quotes
- Q3 is traditionally the smallest quarter in our sales cycle which is around 16 to 17% of our total revenue and the revenue softness during this period had a direct impact on operating leverage. This is a temporary phase. Our long-term fundamentals remain unchanged.
- We are confident to deliver double-digit revenue growth and a better margin than last year Q4 in mid-teen digits. Our overall outlook for FY26 is also to deliver early single-digit revenue growth with a margin in double digit.
- Subject to external factors we are aiming to double our exports from the next financial year fiscal year 27. These exports will not only drive revenue growth but also elevate premium production in India and improve margins firmly positioning LG India as a future global exporter.
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