Shares of LG Electronics India Ltd (LGE India) traded around 3% higher on Friday, recovering losses from the previous session following weak December-quarter (Q3FY26) performance, where both revenue and profit fell short of expectations.
Investors appear to be taking a longer-term view, encouraged by management’s relatively upbeat outlook. The company expects double-digit revenue growth in the March quarter (Q4FY26), and a year-on-year improvement in Ebitda margin. Growth is likely to be led by shifting consumer preferences following the rollout of the new 2026 BEE ratings portfolio and healthy demand across affordable and premium segments for compressor-based products. Product innovation and cost discipline are also expected to support profitability.
Even so, a stronger Q4 may not materially lift FY26 performance. Revenue declined 2% year-on-year in the nine months ended December (9MFY26), while Ebitda margin contracted 330 basis points to 8.8%. Management expects FY26 revenue growth in the early single digits, and Ebitda margin in double-digit territory.
However, FY26’s lower base and a likely stronger summer season in 2026 could support growth in FY27. Management expects double-digit revenue growth next year, with margins sustaining in the early teens, broadly in line with FY25 levels of 12.8%. Exports, which currently account for 6-7% of revenue, are likely to double in FY27, aided by opportunities arising from India-US tariff rationalization and the conclusion of the India–EU free trade agreement.
Some analysts remain cautious. JM Financial Institutional Securities has cut its FY26 earnings per share (EPS) estimates by 5% to factor in the weak Q3, although it raised FY27-28 EPS forecasts by 1-3%. “That said, we bake in a slightly conservative estimate versus guidance; prefer not to rule out potential risks emanating from competitive intensity and rising input costs,” JM analysts said in a 12 February report.
In Q3FY26, LGE India’s Ebitda declined 42% year-on-year to ₹196 crore, and margin contracted about 300 bps to 4.8% due to muted sales hurting operating leverage, increased input costs in copper and aluminium, and currency-related headwinds.
Revenue fell 6.4% to ₹4,114 crore, reflecting softer post-festive demand in compressor-led products, although the company retained market share across categories.
The home appliances and air solutions segment’s performance was weaker than the home entertainment division. Home appliances revenue declined 10% to ₹2,788 crore amid softer demand post-Diwali, and Ebit (earnings before interest and tax) declined as much as 49% to ₹111 crore. To that extent, LGE India avoided price cuts to protect earnings. A continued focus on fundamentals and premium positioning helped support overall average selling prices.
In the home entertainment division, the cut in GST rates provided an initial boost, enabling marginal revenue growth of nearly 2%. However, Ebit still declined 28% to ₹127 crore.
For now, investor sentiment remains supported, with many analysts maintaining a ‘Buy’ rating on the stock. “We maintain BUY as LGE India (parent)’s ‘Global South’ strategy positions India as a key export hub alongside its sustained domestic leadership,” said a 13 February report by Emkay Global Financial Services.
After hitting a peak of ₹1,749 apiece on its listing day on 14 October 2025, the stock now trades around ₹1,512 but remains above its issue price of ₹1,140. At current levels, the stock trades at about 44x FY27 estimated earnings, as per Bloomberg. Investors are likely to watch the trajectory of revenue growth closely before giving out more brownie points.
