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Summary: LG Electronics India has rewarded its IPO investors in its first year as a listed company. But what drove that gain is not what most shareholders would assume, and it raises a harder question for anyone weighing the stock now.
Someone allotted shares in LG Electronics India at the issue price of Rs 1,140 and still holding is up about 53 per cent, with Rs 1 lakh now worth close to Rs 1.53 lakh. Someone who chased the stock on listing day, when it closed at Rs 1,689, is up only about 3 per cent. The same company, the same year, separated only by the entry price. Both still beat the Nifty, which fell over the same period.
The listing raised nothing for the company. It was entirely an offer for sale: the Korean parent, LG Electronics Inc, sold about 15 per cent, worth around Rs 11,607 crore, and kept roughly 85 per cent. Its own cost for those shares averaged Rs 1.66 each, against the Rs 1,140 issue price. The money went to the parent, not the company; LG is funding its growth from its internal accruals.
A difficult year for earnings
FY26 was weak for profit. Revenue was almost flat at Rs 24,605 crore, up just 1 per cent, while net profit fell about 23.5 per cent to Rs 1,685 crore. The EBITDA margin slipped from 12.8 per cent to 9.8 per cent.
An unusually cool summer hit seasonal demand, higher commodity prices and a weaker rupee raised costs, and some buyers deferred purchases around the GST rate cut. The strain showed most in the December quarter, when the EBITDA margin fell to 4.8 per cent. It has since eased: in the June 2026 quarter all three measures rose year-on-year, revenue up about 16 per cent to Rs 7,233 crore, net profit up 27 per cent to Rs 653 crore, and the EBITDA margin back to 12.5 per cent.
Does the valuation justify itself?
| Company | Market cap (Rs crore) | P/E (times) | Revenue growth | EBIT margin | Net profit growth |
|---|---|---|---|---|---|
| LG Electronics India | 1,17,492 | 64.4 | 1.00% | 8.20% | -23.50% |
| Havells India | 70,130 | 42.9 | 3.40% | 7.90% | 14.90% |
| Voltas | 34,743 | 77.3 | -7.60% | 3.60% | -55.70% |
| Whirlpool of India | 10,639 | 42.4 | 1.50% | 3.40% | -18.60% |
| Blue Star | 32,802 | 64.4 | 3.60% | 5.90% | -10.80% |
| Revenue growth, EBIT margin and net profit growth are for FY26. EBIT is earnings before interest and tax. | |||||
In LG’s favour, its operating profitability is the best in the group: an EBIT margin of 8.2 per cent beats every peer, revenue held up while Voltas shrank, and it leads in refrigerators, washing machines, televisions, inverter AC, room air conditioner and microwaves. Those strengths could justify a premium, if future growth supports it. Against that, its net profit fell 23.5 per cent in FY26, a steeper fall than every peer except Voltas, while Havells grew profit about 15 per cent and trades at a far cheaper 43 times.
The sharpest point is the multiple itself. At the issue price LG was valued at about 35 times earnings; by the listing-day close, about 52 times; today, about 64 times. Almost the entire one-year gain for allottees has come from a higher multiple, not higher profit, and a premium built on re-rating has to be earned back by future earnings.
What could drive the next leg of growth
- The Essential Series, an affordable range launched in October 2025 (washing machines at Rs 16,000 to Rs 18,000, refrigerators around Rs 20,000), targets first-time buyers in smaller towns; LG says it sold more than five lakh units between January and June 2026.
- The Rs 5,000 crore Sri City plant in Andhra Pradesh comes next: on the latest guidance, compressor production starts around the October to December 2026 quarter and room air conditioners around January to March 2027, roughly doubling capacity by FY29, funded from internal cash and carrying a 20-year capital subsidy.
- Premiumisation and exports are the third lever: premium models carry richer margins, exports now reach more than 60 countries and earn better margins than domestic sales, and the company sees exports rising towards 6 to 10 per cent of revenue, or more, over the next couple of years.
- The fourth is localisation, about 55 per cent in FY26 and targeted at around 65 to 70 per cent within three to four years; in-house compressors, the costliest part of a fridge or air conditioner, are a cost edge few rivals have.
The investor takeaway after the first year
LG ends year one with its strengths intact: market leader, best operating margin among peers, nearly debt-free, and momentum returning. Yet investors are paying about 64 times earnings, near the top of the sector, for a company just out of a year of falling profit, where the one-year gain came mostly from a richer multiple. The question that decides year two is whether earnings growth can catch up with the price. Worth watching: whether the June-quarter margin recovery holds, how fast exports and the Essential range scale, whether Sri City lands on time, and the royalty to the parent, about 1.9 per cent of sales in FY26, which leaves the company whatever profits do.
Also read: LG Electronics India IPO: Should you apply?
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