LG Electronics: Antique maintains 'Buy' despite weak Q2; here's why
LG Electronics: Profitability metrics weakened sharply. EBITDA declined 27.5 per cent YoY to Rs 550 crore, while the operating margin contracted 350 basis points (bps) to 8.9 per cent.
- Nov 17, 2025,
- Updated Nov 17, 2025 9:14 AM IST
LG Electronics India Ltd reported a soft performance in the September quarter (Q2) of FY26, as adverse weather conditions and rising input costs weighed on profitability. Revenue for Q2 FY26 stood at Rs 6,170 crore, showing a 1 per cent year-on-year (YoY) increase.
Profitability metrics weakened sharply. EBITDA declined 27.5 per cent YoY to Rs 550 crore, while the operating margin contracted 350 basis points (bps) to 8.9 per cent.
Antique Stock Broking attributed the margin pressure to higher commodity prices and incremental spending on festive-season go-to-market activities. Profit after tax (PAT) for the quarter stood at Rs 390 crore, down 27 per cent YoY.
Gross margin slipped 240 bps to 29.4 per cent, reflecting the cost impact of rising raw material prices. Despite the weaker margin profile, the domestic brokerage noted that the company gained market share across key product categories within its home appliance and air solution segment.
The home appliance and air solution (H&A) division posted revenue of Rs 3,950 crore, broadly unchanged from the previous year. EBIT for the segment stood at Rs 320 crore, marking a 32.5 per cent YoY decline and the segment's margin fell 400 bps to 8.2 per cent.
The home entertainment (HE) segment reported revenue of Rs 2,230 crore, a 3 per cent YoY rise. Although, EBIT came in at Rs 280 crore, down 10 per cent YoY, with segment margins reducing 180 bps to 12.6 per cent.
With that being said, Antique highlighted that premium categories in home entertainment continued to grow faster than entry-level products.
The brokerage said GST reduction, festive demand and the wedding season are expected to support a recovery in the second half of FY26. It maintained its 'BUY' rating on the stock, revising the target price to Rs 1,940, based on 45x its H1 FY28E EPS, compared with the earlier target of Rs 1,725.
LG Electronics India Ltd reported a soft performance in the September quarter (Q2) of FY26, as adverse weather conditions and rising input costs weighed on profitability. Revenue for Q2 FY26 stood at Rs 6,170 crore, showing a 1 per cent year-on-year (YoY) increase.
Profitability metrics weakened sharply. EBITDA declined 27.5 per cent YoY to Rs 550 crore, while the operating margin contracted 350 basis points (bps) to 8.9 per cent.
Antique Stock Broking attributed the margin pressure to higher commodity prices and incremental spending on festive-season go-to-market activities. Profit after tax (PAT) for the quarter stood at Rs 390 crore, down 27 per cent YoY.
Gross margin slipped 240 bps to 29.4 per cent, reflecting the cost impact of rising raw material prices. Despite the weaker margin profile, the domestic brokerage noted that the company gained market share across key product categories within its home appliance and air solution segment.
The home appliance and air solution (H&A) division posted revenue of Rs 3,950 crore, broadly unchanged from the previous year. EBIT for the segment stood at Rs 320 crore, marking a 32.5 per cent YoY decline and the segment's margin fell 400 bps to 8.2 per cent.
The home entertainment (HE) segment reported revenue of Rs 2,230 crore, a 3 per cent YoY rise. Although, EBIT came in at Rs 280 crore, down 10 per cent YoY, with segment margins reducing 180 bps to 12.6 per cent.
With that being said, Antique highlighted that premium categories in home entertainment continued to grow faster than entry-level products.
The brokerage said GST reduction, festive demand and the wedding season are expected to support a recovery in the second half of FY26. It maintained its 'BUY' rating on the stock, revising the target price to Rs 1,940, based on 45x its H1 FY28E EPS, compared with the earlier target of Rs 1,725.