Why Did LG Electronics India's Profit Plummet by 27% in Q2?
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Synopsis
Discover the reasons behind LG Electronics India's staggering 27.3% profit drop in Q2 FY26. Despite a slight revenue increase, pressures in the market and operational challenges have raised concerns. Explore the company's strategy and outlook in a changing economic landscape.
Key Takeaways
- 27.3% YoY decline in PAT to Rs 389 crore.
- Revenue rose by 1% to Rs 6,174 crore.
- EBITDA fell by 28% YoY to Rs 547 crore.
- Home appliances revenue dipped to Rs 3,948 crore.
- Strong IPO response with 54.02 times oversubscription.
New Delhi, Nov 13 (NationPress) LG Electronics India disclosed a significant 27.3% year-on-year (YoY) drop in its profit after tax (PAT), amounting to Rs 389 crore for the second quarter of the ongoing fiscal year (Q2 FY26). In the same quarter last year, the company had reported a PAT of Rs 536 crore.
While revenue from operations saw a slight increase of 1%, reaching Rs 6,174 crore in Q2 FY26, this was a marginal rise from Rs 6,113.8 crore in the corresponding quarter of the prior year.
Nonetheless, the company faced challenges with its operating performance, as EBITDA fell by 28% YoY to Rs 547 crore, and margins shrank by 350 basis points to 8.9%.
Segment-wise, the home appliances and air solutions division experienced a slight decline to Rs 3,948 crore, while the home entertainment division posted an increase to Rs 2,226 crore during the quarter.
Across the industry, electronics and consumer goods firms in India encountered weakened demand throughout most of the quarter, as consumers delayed purchases until late September, coinciding with the GST rate reduction affecting various categories, including electronics.
Hong Ju Jeon, Managing Director of LG Electronics India Limited, remarked, "The first half of 2026 faced numerous macroeconomic challenges, such as a cooler summer, geopolitical uncertainties, tariffs, and forex fluctuations. Despite these hurdles, our Indian team showed remarkable sales growth, gaining market share and ensuring stable profitability."
He added, "This performance highlights our operational strengths and the profound trust consumers have in our brand. It reflects our robust fundamentals and strengthens our ongoing commitment to growth in India."
This announcement marks LG Electronics India's first quarterly results following its impressive stock market debut on October 14, 2025.
The company’s shares were listed at a 50% premium on the National Stock Exchange (NSE) at Rs 1,710 per share, compared to the IPO price of Rs 1,140, closing the day at Rs 1,682.8, up 48%.
The IPO, which was available for subscription from October 7 to 9, garnered an overwhelming response with a 54.02 times oversubscription.
Point of View
It is crucial to approach LG Electronics India's recent financial results with a balanced perspective. While the decline in profits may raise concerns, it is essential to consider the broader economic context and the company's resilience in a challenging market. Their commitment to maintaining profitability and market share showcases a strong foundation for future growth.
NationPress
13/11/2025
Frequently Asked Questions
What caused the decline in LG Electronics India's profit?
The decline was attributed to various macroeconomic challenges, including a cooler summer, geopolitical issues, tariffs, and fluctuating foreign exchange rates.
How did LG Electronics India's revenue perform in Q2 FY26?
The company's revenue from operations increased by 1% to Rs 6,174 crore, compared to Rs 6,113.8 crore in the same quarter last year.
What are the expectations for LG Electronics India moving forward?
Despite current challenges, LG Electronics India is focused on operational execution and strengthening consumer trust to drive growth in the future.
