LG Electronics Q2 FY27 Results (NSE: LGEINDIA)
Signal: Growth reaccelerated
The read
The trajectory is a recovery in YoY profitability rather than a fresh sequential acceleration: revenue rose 19.5% YoY and PAT 25.7%, but EBITDA margin fell 301bps QoQ to 9.5% after Q1's 12.5%. The key issue is mix and cost execution, with Home appliances result down 35.2% YoY despite 20.9% segment-revenue growth, while the large CWIP build points to a significant upcoming capacity and diversification cycle.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹7,380.05 Cr | 19.5% | 2.0% |
| EBIT | ₹578.15 Cr | 27.3% | |
| Net profit | ₹489.35 Cr | 25.7% | |
| EPS | ₹7.21 | 25.6% | |
| EBIT margin | 9.5% |
P&L walk
Revenue from operations rose 19.5% YoY to ₹73,800.45 million, while EBITDA rose 28.0% to ₹7,008.65 million and PAT rose 25.7% to ₹4,893.48 million; the YoY margin improvement was partly offset by a 301bps sequential EBITDA-margin contraction.
Segments
Home appliances and air solution remained the largest segment at ₹47,716.90 million revenue but its result fell 35.2% YoY to ₹4,164.08 million, while Home entertainment revenue rose 57.2% YoY to ₹26,083.55 million and result increased 6.4% to ₹3,369.52 million, making the appliances division the main earnings drag.
Key positives
- Revenue from operations rose 19.5% YoY to ₹73,800.45 million, extending the recovery from Q3FY26's ₹41,140 million revenue base.
- PAT rose 25.7% YoY to ₹4,893.48 million and EPS rose 25.6% to ₹7.21, with EPS tracking PAT and no dilution signal.
- Employee benefits expense rose 10.2% YoY and other expenses rose 13.5% YoY versus 19.5% revenue growth, helping EBITDA margin expand 63bps YoY to 9.5%.
- Operating cash flow was ₹16,347.04 million in H1FY27 versus ₹10,268.59 million in H1FY26, while cash and cash equivalents reached ₹50,510.00 million.
- The company approved entry into vehicle solutions, including infotainment, digital cockpit, ADAS, connectivity and automotive software, with manufacturing planned at its third plant in Sri City, Andhra Pradesh.
Key concerns
- EBITDA margin fell 301bps QoQ to 9.5% from 12.5%, showing that the Q1FY27 margin recovery did not sustain sequentially.
- Home appliances and air solution segment result declined 35.2% YoY to ₹4,164.08 million despite segment revenue growth of 20.9%, indicating concentrated earnings pressure in the largest division.
- Gross margin declined 49bps YoY to 28.9% as raw materials, purchases and inventory cost rose to 71.1% of revenue from 70.6%; management did not disclose the cause.
- H1 capex outflow rose to ₹11,628.17 million from ₹5,892.27 million and CWIP increased to ₹17,858.80 million, raising execution and returns-on-capital requirements for the expansion cycle.
- The vehicle-solutions investment amount has not been estimated and will be undertaken in phases based on operations, technology, equipment and market conditions.
Research and educational content only. Not investment advice.