LG Electronics India Ltd Q4 FY26 Results Analysis: Revenue Surges 8%, Margin Compresses 295 bps

LG Electronics India Ltd's Q4 FY26 numbers came in mixed, with revenue of Rs. 8,053.55 Cr (+8.10% YoY) and PAT growth of -8.20% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Q4 FY26 showed strong revenue recovery (+8.1% YoY, +95.7% QoQ) driven by seasonal AC demand and Cricket World Cup-led premium TV sales, with HE segment growing 19.6% YoY. However, FY26 PAT declined 23.5% and EBITDA margin compressed 295 bps to 9.8%, as cost growth outpaced revenue. Market share gains across categories and a healthy balance sheet (net cash, CFO/PAT >1) are positive, but margin recovery to prior year levels remains a work in progress.

Key Investment Insights

Key Positives

• Q4 revenue grew 8.1% YoY to Rs.80,535.52 Mn, with HE segment up 19.6% YoY driven by premium TV demand from Cricket World Cup.
• EBITDA margin recovered 800 bps QoQ from Q3 trough of 5.0% to 13.0% in Q4, validating summer demand pickup and pricing actions.
• Market share gains across categories: TV +0.7%, Refrigerator +0.5%, RAC +0.4% YTD Dec 2025; OLED TV dominant at 62.4% share.
• Operating cash flow of Rs.17,212.48 Mn exceeded PAT (CFO/PAT = 1.02x), with strong cash conversion.
• Cash and equivalents at Rs.44,762.65 Mn (32.9% of total assets), virtually debt-free (Debt/Equity 0.06x).
• Capex of Rs.11,722 Mn (+245% YoY) for Sri City plant, on track for October 2026 operational target.

Risk Factors

• FY26 PAT declined 23.5% YoY to Rs.16,850.93 Mn, with normalized PAT down 24.9% after adjusting for one-offs.
• EBITDA margin compressed 295 bps for full year to 9.8% from 12.8%, driven by other expenses (+117 bps) and material costs (+54 bps).
• Total expenses grew 4.5% YoY vs revenue growth of 1.0%, a 350 bps gap indicating operating deleverage.
• Q4 EBITDA margin of 13.0% still below Q4 FY25's 14.1%, suggesting margins have not fully recovered to prior year levels.
• Finance costs jumped 32.4% YoY to Rs.405.84 Mn, though still small at 0.2% of revenue.