Synopsis: LG Electronics India is undergoing a strategic transformation beyond traditional appliance sales, focusing on premium products, exports, services, and manufacturing expansion. While short-term challenges persist, multiple growth engines are emerging. The key question now is whether this shift can drive sustainable high-margin growth in the coming years.
The current business environment has been impacted by multiple external factors, including US tariffs, currency volatility, GST-related purchase deferments, geopolitical uncertainty, and softening consumer demand due to rising prices. Despite these pressures, LG Electronics India has continued to gain market share and strengthen its position, particularly in premium categories such as OLED TVs, side-by-side refrigerators, and five-star air conditioners.
In Q3FY26, demand started on a strong note, supported by GST rate rationalization, festive season traction, wedding demand, and attractive financing options, especially in premium products like large-screen and OLED televisions. However, post the festive period, demand slowed down, particularly in compressor-based categories such as air conditioners and refrigerators, impacted by a cooler-than-expected summer and cautious consumer sentiment. Even in this environment, the company managed to expand its year-to-date market share, despite taking price hikes in select categories to offset rising input costs and currency pressures.
Financially, revenue declined to Rs. 41.14 billion from Rs. 43.96 billion year-on-year, while EBITDA stood at Rs. 1.96 billion with margins falling to 4.8 percent from 7.7 percent. The margin pressure was driven by weaker sales impacting operating leverage, higher raw material costs, foreign exchange headwinds, and the impact of the new Labour Code. Working capital increased to Rs. 11.3 billion due to higher inventory build-up in compressor-led products ahead of the summer season and extended credit support to trade partners, while cash balances remained strong at Rs. 45 billion.
Despite lower-than-expected performance, the company maintained leadership across key categories, with market share at 33 percent in washing machines, 30 percent in refrigerators, and 17.3 percent in air conditioners, while premium segments such as side-by-side refrigerators saw further gains. Management believes the current phase is temporary, with long-term fundamentals remaining intact.
The Big Shift: From Product Seller to Multi-Engine Business
LG Electronics India is clearly shifting its long-term strategy from being just a product-led company to building a broader, multi-engine business. Under its vision of “Make for India, Make in India, Make India Global,” the company is focusing on product innovation, expanding manufacturing, and improving global competitiveness. On the product side, it is combining global technology with local insights, which is visible in initiatives like the LG Essential series. This range is aimed at first-time buyers and customers in underpenetrated markets, helping the company expand beyond its traditional premium base while still maintaining product quality and brand positioning.
At the same time, LG is strengthening its overall portfolio by balancing premium and mass segments. While premium categories continue to remain a key growth driver, the company is also entering new product areas such as chest freezers and expanding its presence in categories like air conditioners and washing machines. Price increases driven by new BEE energy norms are being managed carefully, with GST reductions helping offset the impact for consumers. Alongside this, LG has started Q4 on a strong note with improving demand, supported by better category recovery and consistent execution across product lines.
Beyond products, the company is building new growth engines to support long-term profitability. This includes expanding its B2B business in areas like HVAC and information displays, growing its AMC services to create recurring high-margin income, and increasing exports from its upcoming Sri City plant. Localization has also improved significantly, rising from 45.1 percent in FY22 to 54.6 percent in Q3FY26, helping reduce costs and manage input volatility. Together, these initiatives are aimed at creating a more diversified, resilient, and high-margin business model over the next few years.
Manufacturing + Localization
Manufacturing and localization are becoming a key foundation for LG Electronics India’s long-term strategy. The company recently secured incentives worth Rs. 705 crore from the Government of Maharashtra, which supports its ongoing investments and strengthens its manufacturing base in the country. At the same time, LG continues to focus on product innovation and efficiency, becoming one of the first companies to launch 2026 BEE-compliant air conditioners, reinforcing its leadership in energy-efficient technology.
A major part of this strategy is the new Sri City plant in Andhra Pradesh, where LG is investing around Rs. 5,000 crore to expand its manufacturing capabilities. The facility is progressing as planned and is expected to begin room air conditioner production in the last quarter of calendar year 2026, followed by compressor manufacturing in later phases. This plant is expected to improve production capacity, enhance logistics efficiency, and support both domestic demand and exports. Importantly, the entire investment is being funded through internal accruals over the next four to five years, highlighting the company’s strong financial position.
Alongside expansion, LG is also increasing localization to reduce costs and manage volatility in raw material prices such as copper and aluminium. Its global procurement scale, long-term supplier contracts, and backward integration help in controlling input cost fluctuations. The company has also entered into a nine-year Advance Pricing Agreement with the tax authorities, removing contingent liabilities of nearly Rs. 487 crore and improving earnings visibility. With normalized inventory levels, early adoption of new BEE-rated products, and strong channel confidence, LG has also moved to the number one position in the air conditioner segment and expects a strong upcoming summer season.
Export Play
Exports are emerging as a key growth lever for LG Electronics India, with the company aiming to significantly scale its global presence. Currently, exports contribute around 6 to 7 percent of total revenue, with products being shipped to over 50 countries across regions such as the Middle East, Southeast Asia, Nepal, and Bangladesh. Going forward, the company plans to double its export revenue, driven primarily by premium products manufactured in India and targeted at developed markets like the US and Europe, subject to external conditions.
This strategy is supported by improving global trade conditions, including the rationalization of India-US tariffs and progress on the India-EU free trade agreement, which have strengthened the export outlook. LG has also set up a dedicated export organization to improve scale, cost competitiveness, and global reach, particularly in North America. India is increasingly becoming a central part of LG Group’s global production strategy, with the company preparing its manufacturing lines to cater to international markets and identifying new export destinations, especially through its upcoming Sri City plant.
Importantly, LG has already developed the capability to manufacture premium products such as large-capacity refrigerators and side-by-side models in India, which meet US market standards in terms of quality and design. This not only enables entry into new geographies but also supports higher-value product exports, improving margins. With exports expected to scale from around USD 160 million currently to nearly double in FY27, the company is positioning India as a long-term global export hub, while remaining mindful of external risks such as tariff changes and market conditions.
Premiumization + Mass Margin
LG Electronics India continues to strengthen its position in premium segments while also expanding into the mass market, creating a balanced growth strategy. In Q3, the Home Appliance and Air Solution segment maintained leadership, supported by festive demand, although momentum slowed after Diwali, especially in air conditioners and refrigerators. Despite this, premium product launches such as French door refrigerators and AI-enabled washing machines helped reinforce its market position. The company is further strengthening its premium portfolio with new launches, including five-star air conditioners, expanded BEE-rated refrigerator range, and new premium models.
At the same time, LG is widening its presence across price segments by entering new categories like chest freezers and launching more accessible products such as sub-one ton air conditioners, new washing machine variants, and additional refrigerator models. In air conditioners, the company is also entering previously unaddressed segments like two-ton five-star ACs and fixed-speed models, allowing it to cover a broader customer base. This approach helps LG capture both premium and entry-level demand, while benefiting from structural drivers such as low AC penetration, rising preference for energy-efficient products, and expectations of a stronger summer season.
In the Home Entertainment segment, premium demand remains strong, with OLED TVs continuing to lead. The company’s OLED market share rose to 62.4 percent, supported by higher demand for large-screen televisions, which now account for a significant portion of industry sales. LG’s strong brand positioning allows it to maintain premium pricing even in a competitive environment, helping offset input cost pressures. Additionally, increased localization in TV manufacturing, with over 55 percent of modules sourced locally, is improving cost efficiency by reducing import duties, logistics costs, and currency risks.
Overall, LG is following a dual strategy of driving premium growth while expanding into the value segment through its Essential series. This range is aimed at first-time buyers and customers in Tier 2 and Tier 3 markets, offering more affordable products without compromising on quality or technology. Rather than focusing only on volume, the company is using this approach to bring new customers into its ecosystem while maintaining its premium brand strength. This balanced strategy positions LG to improve market share, support margins, and drive long-term sustainable growth across categories.
B2B + Services (AMC)+ New Segments
Beyond its core consumer business, LG Electronics India is actively building new growth engines through B2B segments and service-led revenue streams. The company is expanding its presence in areas such as information displays and commercial air conditioning, where demand is being supported by growth in sectors like education, corporate investments, and infrastructure. Even in Q3, while overall demand softened after the festive season, B2B growth, especially in information displays, continued to contribute positively and helped provide some stability to the business.
At the same time, LG is focusing on building a high-margin, recurring revenue stream through its AMC (annual maintenance contract) business. The company has set up a dedicated AMC organization to scale this segment, improve profitability, and strengthen customer relationships over the long term. While the revenue impact of AMC builds gradually after the standard product warranty period, the company is already seeing strong growth, with current costs reflecting early investments and partner incentives, creating a temporary timing gap in profitability.
In addition, LG is exploring new opportunities in emerging areas such as data center cooling, although this remains at an early stage with pilot projects and ongoing evaluations. To support these long-term initiatives, the company has also introduced a Chief Strategy Officer role to better align its growth plans and build a more diversified business portfolio. Overall, B2B expansion, services like AMC, and new segment opportunities are expected to play an important role in improving margins and reducing dependence on traditional product sales over time.
What Should Investors Track?
Investors should closely monitor demand recovery trends in the near term, particularly in Q4, which is seasonally the strongest quarter for the company. Early indicators suggest a pickup in demand across categories, supported by the transition to new BEE energy norms and improving traction in home appliances. Premium segments such as large-screen televisions continue to see strong consumer preference, while B2B demand in areas like information displays is being driven by government spending in education and continued investments from multinational companies.
At the same time, margins remain a key variable to watch. While demand is stabilizing, profitability continues to face pressure from elevated raw material costs and currency volatility. The company has responded with selective price increases across categories such as washing machines and refrigerators, while maintaining competitive positioning. The ability to balance pricing discipline with demand recovery will be critical in determining margin trajectory over the coming quarters.
From a forward-looking perspective, management has guided for double-digit revenue growth and mid-teen EBITDA margins in Q4, with FY26 expected to deliver early single-digit revenue growth and double-digit margins. More importantly, FY27 outlook remains strong, with expectations of double-digit growth and stable early-teen margins, supported by premium product expansion, portfolio diversification, and strong brand positioning. Investors should track execution across these levers to assess whether the company can sustain its transition toward a higher-margin, multi-engine business model.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
The post What is LG Electronics India doing differently compared to its competitors? appeared first on Trade Brains.