LG Electronics India Q2 Results: Profit Falls 27% Year-on-Year
LG Electronics India has revealed its Q2 results, showcasing a significant dip in profitability and stable revenue figures. The financial highlights include:
– Net Profit: Dropped 27% year-on-year (YoY) to Rs 389 crore, down from Rs 536 crore in the same quarter last year.
– Revenue: Remained nearly unchanged, with a modest increase of 1% YoY, reaching Rs 6,174 crore.
– EBITDA: Declined by 28% YoY, amounting to Rs 547 crore, reflecting ongoing financial pressures.
– Margins: Contracted by 350 basis points, settling at approximately 8.9%.
This quarter marks LG’s first report following a highly successful IPO, which saw a subscription of over 50% and impressive listing gains.
Segment Performance and Analyst Outlook
– Home Appliances and Air Solutions: Revenue slipped slightly to Rs 3,948 crore; this segment dominates LG’s portfolio.
– Home Entertainment Division: Experienced growth, with revenue rising to Rs 2,226 crore.
Analysts are optimistic about LG Electronics following the IPO. PL Capital has assigned a Buy rating with a target price of Rs 1,780, citing LG’s robust position in the consumer electronics market.
– Future Growth Projections: A revenue, EBITDA, and PAT CAGR of approximately 10% is expected as LG capitalizes on market opportunities, including capacity expansion and increasing focus on after-sales and B2B services.
– Market Potential: The home appliances and air solutions segment, which accounts for 75% of LG’s revenue, is projected to grow nearly 14% annually through FY22-25, with the room air conditioner category expanding by 22.6%.
As India’s overall appliances and electronics market is anticipated to grow at a CAGR of 13.8% to Rs 6.19 lakh crore by CY29, LG stands poised to take advantage of this trajectory.
On the stock market, LG Electronics India’s shares closed just under 1% higher at Rs 1,672 on the NSE, reflecting investor confidence amidst evolving market dynamics.