LG Electronics India Limited faced a challenging third quarter of fiscal year 2026, reporting revenue decline and margin compression amid subdued consumer demand and input cost pressures. The company held its earnings conference call on February 12, 2026, to discuss the quarterly performance and strategic outlook.

Financial Performance Overview

The company's financial results for Q3 FY26 reflected the challenging operating environment. Revenue from operations declined year-over-year, while profitability metrics came under pressure from multiple headwinds.

The margin compression was attributed to subdued sales impacting operating leverage, increased input costs including copper and aluminium, currency-related headwinds, and the impact of new Labour Code regulations. Working capital increased to ₹11.3 billion as of December 31, 2025, compared to ₹8.1 billion in the previous year, primarily due to incremental inventory in compressor-led products for the upcoming summer season.

Market Share Performance

Despite revenue challenges, LG Electronics India maintained its leadership positions across key product categories. The company demonstrated resilience in market share performance on a year-to-date basis through December 2025.

The company's premium segment performance remained particularly strong, with OLED TV market share reaching 62.4% and side-by-side refrigerator share at 43.3%, reinforcing its leadership in high-value categories.

Segment-wise Business Performance

Home Appliance & Air Solution Segment

The Home Appliance & Air Solution segment generated revenue of ₹27.88 billion compared to ₹30.91 billion in the previous year, with EBIT margin of 4%. The segment faced challenges from post-festival demand softness in compressor-led products, though premium launches including French door refrigerators and AI-enabled washing machines supported the portfolio.

Home Entertainment Segment

The Home Entertainment segment showed resilience with revenue of ₹13.26 billion, up 1.7% year-over-year from ₹13.05 billion in Q3 FY25. The segment benefited from festive season demand and GST rate cuts, particularly in televisions, though margins were impacted by post-festival demand slowdown and input cost pressures.

Strategic Initiatives and Government Incentives

LG Electronics India secured significant government support for its expansion plans. The company received an eligibility certificate from the Government of Maharashtra for incentives worth ₹705 crores under the Electronics Policy 2016.

The company also entered into a nine-year Advance Pricing Agreement with the Central Board of Direct Taxes, covering the period from FY14 to FY23, which eliminates contingent liabilities of ₹4.87 billion related to direct taxes and royalty payments.

Manufacturing Expansion and Export Strategy

LG Electronics India is advancing its manufacturing capabilities with a ₹5,000 crores investment in its third manufacturing facility at Sri City, Andhra Pradesh. The project will be funded entirely through internal accruals and deployed in phases over 4-5 years. Production of room air conditioners is expected to commence in the last quarter of calendar year 2026.

The company plans to double its export value in FY27, leveraging India-US tariff rationalization to 18% and the India-EU Free Trade Agreement. Current exports represent 6-7% of total revenue, reaching 54 neighboring countries. The export strategy focuses on premium products manufactured in India, including side-by-side refrigerators and large capacity refrigerators.

Outlook and Strategic Direction

Management expressed confidence in Q4 FY26 performance, expecting double-digit revenue growth and improved EBITDA margins compared to the previous year's fourth quarter. The company targets early single-digit revenue growth for FY26 with double-digit EBITDA margins.

For FY27, LG Electronics India guides for double-digit revenue growth and early-teen digit margins, supported by premium product launches, diversified portfolio expansion, and the new LG Essential series targeting tier 2 and tier 3 markets. The company continues to focus on localization, which increased from 45.1% in FY22 to 54.6% in Q3 FY26, while expanding into new categories such as chest freezers and strengthening B2B opportunities in HVAC and information display solutions.

LG Electronics India Limited reported challenging third quarter results for FY26, with revenue from operations declining 6.4% year-on-year to ₹41.14 billion amid soft demand conditions following the festive season. The company's EBITDA margin compressed significantly to 4.8% from 7.7% in the corresponding quarter of the previous fiscal year.

Financial Performance Overview

The company's consolidated performance showed pressure across key metrics during Q3FY26. Revenue declined from ₹43.96 billion in Q3FY25 to ₹41.14 billion, while profit after tax dropped to ₹0.90 billion from ₹2.33 billion in the year-ago period.

The margin compression was attributed to subdued sales impacting operating leverage, increased input costs for copper and aluminum, and currency-related headwinds that pressured profitability.

Segment-wise Performance

Home Appliance & Air Solution Segment

The H&A segment, comprising air conditioners, refrigerators, washing machines, and other appliances, recorded revenue of ₹27.88 billion, down 9.8% year-on-year. The segment's EBIT margin declined to 4.0% from 7.1% in Q3FY25.

Home Entertainment Segment

The HE segment, covering televisions, audio-visual products, and monitors, showed resilience with revenue growing 1.7% to ₹13.26 billion. However, EBIT margin compressed to 9.6% from 13.5% in the previous year.

Market Leadership Maintained

Despite revenue pressures, LG Electronics India strengthened its market leadership positions across key categories. The company achieved market share gains in televisions (27.3%, up 0.7%), refrigerators (30.0%, up 0.5%), and air conditioners (17.3%, up 0.4%), while maintaining its leadership position in washing machines at 33.0%.

The company's OLED market share in televisions increased to 62.4%, representing a 2.7% improvement year-on-year, demonstrating strength in the premium segment.

Strategic Developments

LG Electronics India announced several significant developments during the quarter:

• Advance Pricing Agreement: Successfully concluded an APA with CBDT, eliminating ₹487.74 crore contingent liability • Government Incentives: Secured a 15-year incentive package worth ₹705.74 crore from Maharashtra state government • Manufacturing Expansion: Groundbreaking of third factory in Sri City, Andhra Pradesh to boost production capacity • Product Launches: Introduced premium portfolio including French door refrigerators and AI-enabled washing machines

Earnings Call Audio Recording Available

Following the Q3FY26 results announcement, LG Electronics India Limited has made available the audio recording of its earnings call presentation held on February 12, 2026. The recording provides detailed insights into the company's quarterly performance and management commentary on business outlook.

Outlook and Strategy

For Q4FY26, the company expects demand recovery supported by new BEE rating portfolio introduction and favorable summer season conditions. LG Electronics India is implementing a two-track strategy focusing on expanding premium portfolio while strengthening the Essential Series lineup for volume segments.

The company launched new product lineups aligned with latest BEE norms and is witnessing healthy demand across categories, with compressor-based products expected to pick up during summer season. Management remains optimistic about maintaining market leadership while focusing on continuous product innovation and cost discipline to support sustainable profitable growth.