LG Electronics India Ltd expects to ride out the current shortage of liquefied petroleum gas (LPG) stemming from the West Asia conflict, management said at a recent analysts’ meet.
Existing LPG inventories, used for brazing in refrigerators and room air-conditioners (RACs), are sufficient to meet requirements till March-end for RACs and the first week of April for refrigerators. If shortages persist, the company can switch to alternate fuels at its plants, albeit at a higher cost.
Operationally, the company is seeing strong momentum in the March quarter (Q4FY26). In the first two months, its B2B segment (HVAC and information displays) grew 20%, while television sets and washing machines recorded double-digit growth. Even so, full-year FY26 revenue is likely to remain flat or see only marginal growth, weighed down by performance in the nine months ended December (9MFY26). Revenue declined 2% year-on-year to ₹16,550 crore during the period due to channel destocking in Q3, while Ebitda fell a sharper 28% to ₹1,470 crore, hit by elevated copper and aluminium prices and higher other expenses.
A recovery is expected in FY27, supported by price hikes of 2-9% across products and stronger revenue growth. Centrum Broking estimates earnings per share (EPS) growth of 40% and 23% for FY27 and FY28, respectively, while JM Financial Institutional Securities pegs growth at 31% and 13%.
Revenue growth is expected to be driven by portfolio expansion, premiumisation and exports. The company is addressing gaps in its portfolio, including fixed-speed air-conditioners, which account for 12-15% of the RAC market, with three models launched in February, and chest freezers, a ₹3,000 crore segment where it plans to launch its first product in April. It is also doubling down on premium products, which account for 28–29% of its revenue versus 14-15% for the industry.
Exports are another focus area, with plans to expand into markets such as the US and Europe, primarily for premium offerings. The company aims to double the share of exports in FY27 from the current 6-7%.
To support medium-term growth, LG is setting up a third manufacturing plant at Sri City, in addition to its existing facilities in Noida and Pune. The Sri City plant will commence its first RAC production line in FY27, with additional product lines to follow. Given that about 40% of revenue comes from southern markets, the facility is expected to reduce logistics and warehousing costs.
The stock has risen 36% from its issue price of ₹1,140 since listing in October and currently trades at about 45x FY27 estimated EPS, according to Bloomberg consensus. The pace of earnings recovery in the coming quarters will be key to further stock performance.