LG Electronics India share falls 8% after 61% profit decline; Motilal Oswal maintains buy call

Shares of LG Electronics India fell sharply on Thursday after the company reported a weak set of December quarter results, with profit and margins coming under pressure amid subdued post-festive demand and higher input costs.

The stock dropped 8.34 per cent to Rs 1,392 in early trade, compared with its previous close of Rs 1,518.80, as investors reacted to the earnings miss.

Profit and revenue decline in Q3

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LG Electronics India posted a net profit of Rs 89.6 crore in Q3FY26, down 61.6 per cent from Rs 233.4 crore in the year-ago period.

Revenue from operations fell 6.4 per cent year-on-year to Rs 4,114.3 crore, compared with Rs 4,395.5 crore in Q3FY25. The company attributed the decline to muted consumer demand following the festive season and softer offtake across key categories.

The earnings performance was below Street expectations, leading to a sharp correction in the stock.

Margins contract on cost pressure

Operating performance also weakened during the quarter. EBITDA declined 42.6 per cent year-on-year to Rs 195.7 crore from Rs 340.7 crore.

EBITDA margin contracted 300 basis points to 4.8 per cent, compared with 7.8 per cent in the corresponding quarter last year. The margin pressure was driven by elevated raw material prices and forex volatility, which impacted input costs.

Brokerage Motilal Oswal said EBITDA missed estimates by about 23 per cent, while operating profit margin at 5.1 per cent was below its estimate of 6.5 per cent. Adjusted profit after tax declined about 50 per cent year-on-year and missed estimates by roughly 37 per cent.

Home appliances business under pressure

The Home Appliances segment remained the key drag on overall performance. Segment revenue declined to Rs 2,788 crore in Q3FY26 from Rs 3,091 crore in Q3FY25, reflecting demand softness after Diwali.

Analysts noted that the slowdown in discretionary consumption and lower replacement demand weighed on sales volumes during the quarter.

Management commentary and outlook

Despite the weak quarter, the management said the company maintained its number one position across key B2C segments. It attributed the subdued performance to external factors and cyclical demand softness.

The company guided for a stronger fourth quarter, expecting recovery in demand across both affordable and premium product categories, especially compressor-based products. It also said the introduction of its new 2026 BEE-rated portfolio has seen encouraging consumer response.

Motilal Oswal buy rating

Motilal Oswal has maintained a ‘Buy’ rating on the stock, citing an expected recovery in demand and improvement in the export environment in the coming quarters.