LG Electronics India Q2 2024 Results: Key Takeaways
LG Electronics India, a major player in consumer electronics, posted a 27% year-on-year (YoY) decline in net profit for Q2 2024, falling to ₹389 crore from ₹533 crore in Q2 2023. Revenue remained stagnant, highlighting persistent sector challenges like inflation and subdued consumer demand.
Financial Performance Snapshot
- Net Profit: ₹389 crore (↓27% YoY)
- Revenue: Flat YoY
- Margins: Pressured by rising costs & competition
The sluggish performance mirrors industry-wide trends as companies navigate post-pandemic demand fluctuations, inflation, and fierce competition.
Reasons Behind LG’s Profit Drop
- Rising Input Costs
- Higher prices of raw materials (metals, plastics) and freight expenses hurt margins.
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Limited ability to pass costs to consumers due to price-sensitive demand.
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Weak Consumer Spending
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Discretionary purchases (premium TVs, appliances) slowed amid inflationary pressures.
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Intensified Competition
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Brands like Samsung, Xiaomi, and Voltas ramped up discounts, forcing LG to increase marketing spends.
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Currency Volatility
- Rupee-dollar fluctuations raised import costs for components.
Flat Revenue: What’s the Impact?
Despite LG’s dominance in refrigerators, ACs, and washing machines, revenue stagnation suggests market saturation in mass segments. Growth in premium products (OLED TVs, AI appliances) hasn’t offset declines in entry-level categories.
LG’s Recovery Strategy
To combat challenges, LG is focusing on:
– Premiumization: High-margin products like 8K TVs and AI-enabled devices.
– Local Manufacturing: Expanding “Make in India” to cut costs.
– Rural Expansion: Targeting smaller towns for untapped demand.
– Service Network: Enhancing after-sales support to retain customers.
Industry Outlook & Expert Insights
Analysts remain cautiously optimistic:
Rajesh Bhatt, ICICI Securities:
“Short-term headwinds persist, but LG’s brand strength and innovation could fuel recovery. Festive demand and rural revival may boost H2 performance.”
How Are Competitors Faring?
- Samsung India: Moderate revenue growth, driven by smartphones.
- Voltas: Mixed results due to uneven AC demand.
Final Verdict: Will LG Rebound?
While Q2 was tough, LG’s strategic shifts—premiumization, localization, and rural push—could drive a stronger second half. The festive season will be a critical test.
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