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Informist, Friday, Aug. 14, 2026

 

--LG Electronics: Price hikes offset high costs impact with no hit on demand 

--CONTEXT: Comments by LG Electronics mgmt in post-earnings analyst call 

--LG Electronics: Began festive stocking, see strong demand going ahead 

--LG Electronics: Aim to increase export pdts, enter new nations going ahead 

--LG Electronics:Demand in FY27 to be broad based, not on select pdt category 

--LG Electronics: Target to reach localisation rate of 65% in 3-4 years 

 

By Avishek Rakshit and Adithya Aji

 

KOLKATA/MUMBAI – LG Electronics India Ltd., which is focussing on growing its exports from the country in the coming quarters, plans to increase the level of localisation in its products to 65% in the next three-four years from the current level of 55.2%, a senior company official said on Friday.

 

"Over the past year, we have consistently improved our localisation rate by 2-3% every (financial) year, and we expect this to maintain as we go forward. Our target is to reach the localisation rate to 65% over the next 3-4 years," Chief Accounting Officer Atul Khanna told sector analysts in a post-earnings conference call. 

 

Khanna said that localisation, or sourcing of input materials locally, in this case India, will not only be restricted to raw materials, but will also encompass components and sub-assemblies for products. He said that LG Electronics has started in-house compressor production for room air conditioners, one of its biggest localisation initiatives which improves margins. 

 

"Localisation is one of our most powerful and structural margin levers. Every percentage point improvement in localisation reduces the import dependency and currency exposure, directly improving our cost structure," he said. "In an environment where the rupee has faced depreciation pressure, our localisation rate acts as a natural hedge, protecting our margins from the currency headwinds."

 

In the June quarter, the company's earnings before interest, tax, depreciation, and amortisation margin expanded by 106 basis points on year to 12.5%, primarily on account of better operating leverage on higher volumes, pricing, and the growing benefit of deeper localisation. 

 

In the June quarter, LG Electronics, in line with its peers, increased prices of consumer durables and appliances due to cost pressures. However, consumers absorbed the price hike and demand for its white goods remained healthy. 

 

The company has now started stocking up its products with distributors and retailers in anticipation of the demand surge that usually happens in the festive season. Usually, demand for white goods surges in the festive months of September-October.

 

"The monsoon is lifting washing machine sales, festive stocking has already begun, and prices across the industry have held firm as higher input costs were passed on in a calibrated way," Aditya Bhasin, head of the company's investor relations said. "For LG, the next leg of growth is already underway."

 

LG Electronics plans to launch new higher capacity top-load washing machines in the coming months and its premium range of French door refrigerators and artificial intelligence direct drive washing machines are doing well in terms of sales currently, Bhasin said. 

 

In the June quarter, television sales were extremely good for the company, aided by demand during the FIFA World Cup. Larger screen televisions and premium technologies like organic light emitting diode televisions and quantum nano-emitting diode televisions sold well in the June quarter.

 

LG Electronics expects consumer demand in the current financial year to be broad-based across product categories, and not limited to any particular category. 

 

At a time when the company is increasingly aiming to increase localisation of its products, it is also focussing on increasing its export volumes from India and entering new countries in the coming months as well with products made in India. 

 

On Friday, shares of LG Electronics India closed 1% higher at INR 1,729.70 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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