LG Electronics India is targeting double-digit revenue growth and double-digit EBITDA margins in FY27 despite rising commodity prices, currency volatility and concerns over slowing consumer demand amid geopolitical tensions linked to the Iran war.
Sanjay Chitkara, director and co-chief sales and marketing officer at LG Electronics India said strong summer demand, premiumisation and deeper localisation would help cushion the impact of higher crude-linked input costs even after multiple price hikes across cooling products.
“We strongly believe the market is gradually shifting from just price-based competition to value, technology, energy efficiency and premium features,” he said in a post-results interaction with FE on Thursday.
The company on Thursday reported an 8% year-on-year drop in consolidated net profit for Q4 to Rs 693 crore even as revenue surged by 8% to a record Rs 8,054 crore versus last year. Ebitda margins slipped 240 basis points to 11.7% in Q4 amid inflationary pressures. The company took two rounds of price hikes between January and April to mitigate some of these pressures.
But that hardly seems enough as consumer goods makers including durable manufacturers brace for higher logistics and raw material costs due to persistent tensions in West Asia. Rising crude oil prices have increased pressure on plastics, metals, compressors and freight rates—key inputs for appliance makers.
AC, Large-Screen TV Sales
Chitkara said air conditioners remained the biggest growth driver during the March quarter, with the company selling one million AC units in Q4 alone. “Air conditioners are increasingly becoming a necessary household product now,” he said, pointing to India’s still-low AC penetration of 12-13%.
The company implemented a 6-7% price increase in January after revised BEE energy-efficiency norms came into effect, followed by another 5-6% hike in April due to commodity inflation and currency volatility. Combined price increases on ACs have reached nearly 12% in four months, he said.
Despite this, LG said demand has remained resilient because consumers are increasingly upgrading to premium and energy-efficient products.
“Being a premium brand, we are deriving benefits when consumers upgrade,” he said.
Televisions emerged as another strong growth segment, with LG reporting more than 20% growth in TV sales during the March quarter. Demand for 55-inch and larger televisions rose 47%, helped by cricket tournaments including the T20 World Cup and start of the IPL season.
“We have seen a trend of consumers moving towards large screen sizes,” Chitkara said, adding that 55-inch-and-above televisions now contribute nearly half of the company’s TV business.
The company also saw strong traction in washing machines, particularly in tier-2 and tier-3 markets through its “Essential Series” range, where it sold 100,000 units during the quarter.
Local Manufacturing
Executives said LG’s manufacturing footprint in India remains a key strategic advantage at a time of global uncertainty. Nearly 95% of products sold by the company are manufactured locally.
“Our three strategic pillars—Make in India, Make for India and Make India Global—will continue to actively shape our future growth,” Chitkara said.
LG is also expanding into newer premium categories such as French-door refrigerators, where its market share rose from 5% in November to 14% by March.
The company expects exports and B2B operations to become additional growth drivers in FY27. Its B2B business recorded its highest-ever quarterly turnover in Q4.