LG Electronics India (LGEL IN) – Q2FY26 Result Update – Muted quarter due to demand deferment – BUY
Published on 14 Nov 2025
Home Appliances & Air Solutions reported flat revenue as purchases were temporarily deferred due to GST rate-cut announcement while margins were impacted by rising commodity costs and incremental festive go-to-market investments to support distributors and retailers, while the company continued to gain market share across major categories. Working capital increased sequentially due to higher inventory in compressor-led products and additional channel support. GST impact has eased, leading to normal channel inventory and an improving demand outlook. A strong push on premiumization, B2B expansion, and the new Essential series is expected to support medium-term growth. Sri City plant to begin RAC production by Oct’26, followed by compressors in Q4FY27 and other lines thereafter. LGEL’s RM localization stood at 55.8% in Q2FY26 and company expects to improve this by 2–3% annually and will support margin improvement over the next few years. We estimate FY25-28E revenue/EBITDA/PAT CAGR of 9.6%/10.0%/9.2%. Maintain ‘BUY’ rating with revised TP of Rs1,920 (earlier Rs1,780) based on 45x (Earlier 42x) FY28 EPS.
