LG India’s margin fell 3 percentage points sequentially as costs outpaced revenue
Year-on-year growth remained firm, but operating margin was 2.25 percentage points below the Consumer Discretionary peer median.
Filed 05 Nov 2026, 10:56 IST · LG Electronics India Ltd (LGEINDIA)
Key takeaways
- Q2FY27 revenue grew 19.53% year on year, but operating margin improved only 0.63 percentage points to 9.50%.
- Sequentially, expenses grew 5.53% against revenue growth of 2.03%, narrowing operating margin by 3.00 percentage points.
- Other income contributed 13.07% of profit before tax, while a 0.55-percentage-point decline in the tax rate supported the 25.66% year-on-year net-profit growth.
Price around the results
Year-on-year growth held, but quarterly momentum weakened
LG Electronics India reported standalone revenue growth of 19.53% year on year in Q2FY27, with expenses growing slightly slower at 18.71%; this lifted operating margin by 0.63 percentage points. Sequentially, however, revenue rose only 2.03% while expenses increased 5.53%, causing operating profit to fall 22.49% and net profit to decline 25.05%. The company’s operating margin was 9.50%, below the 11.75% median for 231 Consumer Discretionary peers that had reported.
Cost inflation drove the sequential margin contraction
The 3.00-percentage-point sequential margin decline reflects costs growing faster than revenue, rather than a fall in sales. Depreciation also rose 9.76% sequentially, while interest fell 1.20%, so financing costs did not drive the profit decline. Other income was 13.07% of profit before tax, making reported profit partly dependent on non-operating income; year on year, the tax rate fell 0.55 percentage points to support net-profit growth.
Management points to appliances, premium categories and new channels
Management said Home Appliances and Air Solution recorded their highest growth since listing, led by washing machines, refrigerators and room air conditioners. The company told analysts that festive and wedding-season consumption is expected to support appliance demand, while premium French Door refrigerators and dishwashers are expected to sustain momentum in Q3FY27. Management also said B2B and non-hardware AMC businesses are scaling as higher-margin diversified growth engines, and that Mini LED TVs broaden the television offering alongside large-screen, QNED and OLED products.
Margin recovery remains the key quarterly test
Operating margin has now fallen from 12.50% in Q1FY27 to 9.50% in Q2FY27, after rising from 4.77% in Q3FY26 to 11.74% in Q4FY26. This is the first sequential decline after two quarters of improvement, although the year-on-year margin remains above Q2FY26’s 8.87%. In the last four result-related sessions, the stock rose once and fell three times, with a median absolute move of 3.31%.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹7,380 cr | ₹7,233 cr | +2.03% | +19.53% |
| Other income | ₹86 cr | ₹95 cr | -9.68% | +7.24% |
| Expenses | ₹6,679 cr | ₹6,329 cr | +5.53% | +18.71% |
| Operating profit | ₹701 cr | ₹904 cr | -22.49% | +28.00% |
| Operating margin (%) | 9.50% | 12.50% | — | — |
| Interest | ₹9 cr | ₹9 cr | -1.20% | +0.44% |
| Depreciation | ₹123 cr | ₹112 cr | +9.76% | +31.27% |
| Profit before tax | ₹655 cr | ₹878 cr | -25.44% | +24.73% |
| Tax | ₹165 cr | ₹225 cr | -26.59% | +22.08% |
| Net profit | ₹489 cr | ₹653 cr | -25.05% | +25.66% |
| EPS (₹) | ₹7.21 | ₹9.62 | -25.05% | +25.61% |
Operating margin of 9.50% compares with a Consumer Discretionary sector median of 11.75% across 231 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Home Appliances and Air Solution delivered its highest growth since listing, led by Washing Machines, Refrigerators and RAC.
Guidance & outlook
- The festive and wedding season is expected to drive strong consumption across appliance categories.
- The company expects premium French Door Refrigerators and Dishwashers to sustain momentum in Q3 FY27.
- The festive season is expected to be the key demand driver for televisions in Q3 FY27.
New products
- The addition of Mini LED TVs expands the offering alongside large-screen, QNED and OLED technologies.
New initiatives
- B2B and high-profit non-hardware AMC businesses are scaling as diversified, high-margin growth engines.
What to watch
- Whether operating margin moves back from 9.50% after the 3.00-percentage-point sequential decline.
- Whether expense growth stays below revenue growth after the 5.53% versus 2.03% sequential gap.
- Whether other income remains near 13.07% of profit before tax or becomes less significant to reported profit.