LG Electronics India on Wednesday reported a sharp drop in consolidated net profit, hit by weaker demand in home appliances, especially in the post-festive period. The company posted a 61.6% year-on-year (y-o-y) fall in net profit to nearly Rs 90 crore in Q3FY26, below Street estimates of Rs 205 crore for the period.
Revenue from operations fell 6.4% y-o-y to Rs 4,114 crore, against a Bloomberg consensus estimate of Rs 4,330 crore. Earnings before interest, tax, depreciation and amortisation (Ebitda) declined 42.4 per cent y-o-y to Rs 196 crore as operating expenses remained elevated, sector analysts said. Street estimates had pegged Q3 Ebitda at Rs 323 crore.
Strategic Trade-off
Ebitda margins nearly halved to 4.8% in Q3 from 7.7% a year earlier, the results showed.
Demand for room air conditioners remained subdued for most of the December quarter as cool weather conditions dampened sales. Air conditioners have remained under pressure as a category since the April–June period, when unseasonal weather dampened sales and sentiment, analysts said.
LG said demand in its home appliances segment softened after Diwali, when Indians typically splurge on big-ticket items, but it chose not to cut prices in order to protect long-term profitability.
Analysts at ICICI Securities had expected a weaker third quarter for LG India. However, they said the company is prioritising margin protection over volume growth in a soft demand environment, positioning it well when demand normalises.
Summer Outlook
The company maintained a positive outlook for Q4FY26, saying it has received a good response to its energy-efficient cooling products. It also expects strong summer-led demand in calendar year 2026 for its cooling products, reversing weak demand trends seen in the past few quarters in this segment. The company added that it will continue to focus on innovation, cost discipline and export growth.