LG Electronics India Shares Tumble Over 8% Following Sharp Profit Decline
Shares of LG Electronics India witnessed a significant drop of more than 8% during trading on Thursday, February 12, reacting sharply to the company's latest financial results. The steep decline came after the prominent appliance and consumer electronics manufacturer announced a staggering 61.58% year-on-year fall in its net profit for the December quarter of the fiscal year 2026.
Quarterly Financial Performance Details
According to a regulatory filing by LG Electronics India Ltd, the net profit for the October-December period of FY26 plummeted to ₹89.67 crore. This marks a dramatic decrease from the ₹233.45 crore reported during the same quarter in the previous fiscal year, highlighting a substantial contraction in profitability.
In contrast, the company's revenue from operations remained nearly unchanged, registering at ₹4,114.4 crore for Q3 FY26. This figure compares to ₹4,395.53 crore in the corresponding period a year ago, indicating a relatively stable top-line performance despite the profit challenges.
Expenses and Segment-Wise Analysis
The total expenses incurred by LG Electronics India amounted to ₹4,038.36 crore in the third quarter of FY26, reflecting a modest decrease of 2.77% on a year-on-year basis. This reduction in costs, however, was insufficient to offset the profit decline, pointing to deeper operational issues.
Breaking down the revenue by segments, the home appliance and air solutions (H&A) division saw a slight decline of 9.8% in the December quarter. Revenue from this segment fell to ₹2,788.09 crore from ₹3,090.90 crore in the same period last year. According to the company's earnings report, this drop was primarily attributed to a 'softening in demand' following the Diwali festival, which typically boosts consumer spending.
Market Context and Future Outlook
This announcement represents the second quarterly results disclosure since LG Electronics India made its debut on the stock market in October of last year. As a subsidiary of South Korea's LG Electronics Inc., the Indian arm's performance is closely watched by investors for insights into the broader consumer electronics sector and market trends.
The sharp stock price reaction underscores investor concerns over the company's ability to maintain profitability in a competitive landscape. With demand fluctuations post-festive seasons and ongoing market challenges, LG Electronics India faces the task of strategizing to recover its financial health in the upcoming quarters. Analysts will be monitoring subsequent filings for signs of improvement or further pressures in this dynamic industry.
