LG India says there is no demand problem; GST pauses deferred purchases, not business prospects

LG Electronics India remains optimistic about its growth trajectory despite a difficult quarter marked by unusual weather conditions, geopolitical uncertainties and a temporary sales freeze due to GST restructuring. The company reported revenue growth of 1%, an industry-leading EBITDA margin of 8.9% and a significant increase in market share in TVs, refrigerators and air conditioning.Chief Sales Officer Sanjay Chitkara and Chief Accounting Officer Atul Khanna told ET Now that the challenges were temporary and demand fundamentals remain intact.

GST led sales pause, no demand problem

Chitkara said the second quarter was distorted by the GST recalibration on September 22, which froze consumer and dealer purchases for almost six weeks.But despite this disruption, LG recovered three months’ worth of sales in a month and a half, while brand health remained strong and market share improved significantly across all categories. “We built LG not on short-term tactics, but on long-term strategies,” Chitkara said.

LG’s market share reached historic highs:

• Televisions: +1.4% (gap with No. 2 widened to 6.7%)
• Refrigerators: +1% (difference increases to 6.2%)
• Washing machines: ~16% ahead of number 2
• Air Conditioners: Now #1 in the overall AC category, not just inverter ACs

Margins hit by promotions and raw material costs: will improve

LG’s EBITDA margin in the second quarter was 8.9%, compared to the usual 12-13%. Khanna explained that the decline was due to the GST deferment impacting volumes, higher promotional spend and some pressure on raw material costs. “We expect to exceed 8.9% margins in the second half,” Khanna said, adding that LG’s long-term profile remains in the double-digit EBITDA range.LG Electronics India’s margins are expected to rise in the second half due to

Outlook for the third quarter: higher prices, better mix, stronger demand

Chitkara reiterated that LG never chases short-term margins at the expense of volume leadership. “Market share drives sales, and sales drives profits,” he said.

The third quarter is expected to benefit from pent-up festive demand, post-GST break recovery, price hikes already implemented, localization-driven cost savings and strong growth in the premium segment.

Both managers confirmed that the third and fourth quarters will show better sales and margin performance.

Premium + Essentials: LG is expanding at both ends of the market

While maintaining leadership in premium devices, LG is also expanding its presence in the mass premium and entry-level segments through the recently launched Essential series. New products have been launched, such as an 8 kg front-loading washing machine and a 225-liter refrigerator. This year there will be two more models in each category

Initial response has been “very strong,” Chitkara said, noting that the lineup offers LG-level quality and service at more accessible prices.

Strategic levers for margin and growth acceleration

LG’s growth strategy relies on intensive local production of components (compressors, heat exchangers, PCBs, display modules), stronger retail partnerships, balanced pricing and promotions, faster growth in B2B and services and a broader product portfolio across all price categories.

“These levers will cumulatively increase EBITDA and strengthen market leadership,” Chitkara said.

Stable returns towards double-digit EBITDA margins

Despite a GST-induced slowdown and margin pressure, LG Electronics India has delivered resilient performance, gaining market share and strengthening its leadership. With localization, price increases, a strong festival season and premiumization, the company expects a stronger second half and steady returns towards double-digit EBITDA margins.