N※N

LG Electronics India Shares Plunge 8% Amid Profit Slump

  //business-finance.news-articles.net/content/202 .. ics-india-shares-plunge-8-amid-profit-slump.html
  Published in Business and Finance on Friday, February 20th 2026 at 12:21 GMT by Zee Business
      Locales: INDIA, KOREA REPUBLIC OF

New Delhi, India - February 20th, 2026 - Shares of LG Electronics India experienced a significant downturn today, plummeting 8% in early trading following the announcement of a substantial 61% decline in net profit for the December quarter of FY24. The stock closed at INR1,327.90 on the Bombay Stock Exchange (BSE), reflecting investor concern over the company's recent performance. While the immediate reaction was negative, a surprising 'Buy' rating from Motilal Oswal Financial Services has injected a degree of optimism into the situation, suggesting a potential buying opportunity for discerning investors.

Diving Deeper into the Profit Slump

The reported net profit of INR132.44 crore represents a stark contrast to the INR338.26 crore earned in the corresponding quarter of the previous fiscal year. This dramatic decline isn't simply a one-off event; it underscores a growing trend of challenges facing consumer electronics manufacturers in the Indian market. The primary drivers behind this downturn, according to LG Electronics India's official statements, are escalating input costs and a compression of operating margins. Raw material prices, particularly for components crucial in television and appliance manufacturing, have seen a consistent upward trajectory over the past year, squeezing profitability.

Revenue from operations also felt the pinch, decreasing to INR3,399.20 crore from INR3,834.35 crore year-on-year. This dip in sales volume, coupled with the increased costs, paints a challenging picture for the short term. Analysts point to increased competition from both domestic and international players, alongside a slight softening in consumer demand due to broader economic uncertainties, as contributing factors to this revenue decline.

The Motilal Oswal Counter-Narrative: A Buying Opportunity?

In a move that appears to defy the prevailing bearish sentiment, Motilal Oswal Financial Services has not only maintained its 'Buy' rating on LG Electronics India but also reaffirmed a target price of INR1,850. This represents a potential upside of approximately 40% from the current market price, making it a rather bold prediction considering the recent profit plunge.

Motilal Oswal's analysts justify their optimistic stance by highlighting several key strengths that differentiate LG Electronics India within the competitive landscape. These include the company's unwavering commitment to developing and marketing premium products, a strategically built and incredibly robust distribution network that reaches even the most remote corners of the country, and the inherent potential for growth within the expanding Indian consumer electronics market.

Beyond the Numbers: LG's Strategic Positioning and Future Outlook

LG Electronics India has historically been a strong player in the Indian market, known for its innovative products and brand recognition. The company has actively invested in research and development, focusing on smart home technologies, OLED televisions, and energy-efficient appliances - areas that are expected to drive future growth. Their emphasis on premium offerings, while contributing to margin pressures in the short term, positions them well to capture a larger share of the higher-margin segment of the market. This is particularly crucial as Indian consumers increasingly prioritize quality and features over price.

However, navigating the current economic climate and competitive pressures will require strategic adjustments. LG needs to effectively manage its supply chain to mitigate the impact of rising input costs. This could involve diversifying sourcing, negotiating favorable contracts with suppliers, and investing in technologies that improve manufacturing efficiency. Further investment in localized manufacturing could also provide a buffer against currency fluctuations and import duties.

The increasing demand for connected devices and smart home solutions presents a significant opportunity for LG. The company's portfolio of smart appliances and entertainment systems aligns perfectly with this trend, but they must continue to innovate and offer compelling value propositions to stay ahead of the competition. Furthermore, strengthening its after-sales service network will be critical for building customer loyalty and enhancing brand reputation.

The Motilal Oswal analysts suggest the current market reaction represents an overcorrection, fuelled by short-term anxieties. They believe LG Electronics India has the fundamental strength to overcome these challenges and capitalize on long-term growth drivers within the Indian consumer electronics sector. Whether their prediction proves accurate remains to be seen, but the 'Buy' rating has undoubtedly sparked debate and offers a contrasting viewpoint in a sea of negativity. Investors will be closely watching LG's performance in the coming quarters to determine if the company can deliver on its potential and regain investor confidence.