LG Electronics India Stock Drops as Profit Falls 8% Amid Margin Squeeze

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AuthorAarav Shah|Published at:
LG Electronics India Stock Drops as Profit Falls 8% Amid Margin Squeeze
Overview

LG Electronics India shares dropped sharply Friday after the company reported an 8% year-on-year fall in net profit to ₹692.7 crore for the March quarter. Revenue grew 8% to ₹8,053.6 crore, but margins were squeezed by a weaker rupee and rising commodity costs.

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LG Electronics India's stock fell 4.4% in early trading on the BSE Friday, following the company's fourth-quarter earnings report. Net profit for the March quarter declined 8% from the previous year to ₹692.7 crore, down from ₹754.5 crore.

Margin Pressures Emerge

Despite an 8% increase in revenue from operations to ₹8,053.6 crore, earnings before interest, tax, depreciation, and amortisation (EBITDA) were ₹945 crore. The EBITDA margin narrowed to 11.7%, largely due to the depreciating rupee and increased commodity prices. The company is focusing on cost discipline, greater localization, and operational efficiency to improve margins.

Segment Performance and Outlook

The Information Display business saw strong growth in the business-to-business (B2B) sector during the quarter. In the heating, ventilation, and air conditioning (HVAC) segment, LG Electronics India is expanding its Variable Refrigerant Flow (VRF) and Cassette AC systems. Their HVAC solutions were recently installed at the new Prime Minister's office building.

The Home Appliance division reported revenue of ₹6,516 crore, a 5.7% year-on-year increase. The Home Entertainment segment's revenue rose 19.6% year-on-year to ₹1,537 crore. LG Electronics India, established in 1997, has manufacturing facilities in Greater Noida and Pune.

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