Thanks, Michelle, and on behalf of Citibank, I would like to welcome all the participants to the Q2 FY26 conference call of LG Electronics India Limited. I have with us Mr.

Soon-Joo Seo, Investor Relations Officer of LGEIL. Without further taking time, I would like to hand over the call to Mr.

Soon-Joo Seo. Over to you, sir.

Warm good evening to everyone. I would like to welcome you to the Q2 FY26 earnings call of LG Electronics India Limited.

Hope you have gone through our presentation uploaded on our website and stock exchanges. I also want to remind you of the safe harbor.

We may be making some forward-looking statements that have to be understood in conjunction with the uncertainties and the risks that the company faces. We have our senior management here with us today, being represented by Mr.

Dongmyung Seo, Chief Financial Officer; Mr. Sanjay Chitkara, Chief Sales Officer; Mr.

Atul Khanna, Chief Accounting Officer; Mr. Gaganjit Singh, Chief Manufacturing Officer; Mr.

Gurpreet Singh, Financial Head; Mr. Aditya Bhasin, Head Investor Relations.

Without any further delay, I hand over the floor to Mr. Dongmyung Seo for his initial remarks.

Thank you.

Namaste. LGEIL ke pehli earning call mein aap sabhi ka swaagat hai.

It is an honor to be with you today as we celebrate a major milestone in LG Electronics India's journey: our successful initial public offering last month. We are humbled by the greatest response from the market, receiving bids worth 4.4 lakh crore rupees and achieving 54 times subscription, the highest in India's IPO market since 2008.

This was not just a financial event; it was a moment of pride for all of us. The strong participation from local shareholders reflects a deep trust placed in us, which reinforces our identity as an India-rooted company and a true national corporation.

In our future vision event, we shared LG India's long-term strategic direction: Make for India, Make in India, Make India Global. This vision is driven by a tangible action plan to deliver results across product innovation, manufacturing scale-up, and global competitiveness.

As a part of Make for India, we are combining global technology with deep local insights to create products tailored for Indian lifestyles. Our newly launched LG Essential Series under the slogan, "Har Ghar Appliances, Har Ghar Happiness", which is designed for aspirational and first-time buyers, is already gaining strong early traction in underpenetrated regional markets.

It reflects our commitment to growing together with Indian consumers by delivering quality products powered by LG technology, combining affordability and value for money for families across the country. On the Make in India front, we are expanding our manufacturing footprint.

We already did groundbreaking on our third factory in Sri City, Andhra Pradesh. This new facility will significantly boost our production capacity, improve logistics, and strengthen our supply chain in South India, laying the foundation for long-term growth and operational excellence.

Construction is progressing smoothly in line with the planned schedule. Beginning with the construction of production building for RAC and compressors, we'll expand the construction to production building for refrigerators and warehouse next year.

Through Make India Global, we are supporting LG's Global South strategy by leveraging India's productivity in hardware and growing software capabilities. We are closely monitoring global trade developments, and our premium product portfolio is set to drive export expansion as tariff situation improves.

Together, these represent our commitment to innovation, localization, and global ambition. Further, we are actively pursuing new business initiatives to expand domestic revenue.

These efforts are aimed at deepening LG footprint in India. Our core fundamentals remain strong.

Although several external environment factors have affected our short-term performance, we are continuously strengthening our fundamental business competitiveness by expanding market share across all major product categories. In addition, for quality growth, we are witnessing our business portfolio advance as the proportion of high-profit businesses increase, such as non-hardware-based recurring businesses like AMC and B2B operations that hold high growth potential.

In particular, as global IT companies expand their data centers worldwide, India's strong IT capabilities make it a key destination, where LGEIL is tapping into the data center cooling market. As we move forward, we are not just expanding product lines, we are expanding possibilities for millions of Indian households.

From deepening regional reach to scaling global exports, every step we take is rooted in India's aspirations and aligned with global opportunities. Thanks for your continuous trust.

Now, I would request Mr. Atul Khanna, our Chief Accounting Officer, to take you through the financials.

Thank you.

Thank you, Mr. Suh, and good evening, everyone.

It is a pleasure to welcome you to our first earnings call post-IPO, and I would like to thank each one of you for taking the time to join us today. Let me now share an overview of LG India's financial performance for the second quarter of fiscal year 2026.

The first half of the year witnessed muted momentum across the consumer durable sector, shaped by a combination of external headwinds. Demand was notably impacted by an unexpected cooler summer, early monsoon, currency volatility, US tariffs, and geopolitical tensions, particularly the Indo-Pak situation, leading to a cautious consumer sentiments.

These external factors impacted overall demand, especially in compressor-based categories such as air conditioners and refrigerators. Gentlemen, just to share with you, based on a recent report from CRISIL published in Economic Times on November 2nd, it says the Indian home appliances industry is expected to see slower growth this fiscal year.

However, a key development during the quarter was the GST rate cut announcement on August 15th. This timely policy intervention helped revive consumer confidence and supported the demand outlook.

The implementation of the revised rates on September 22nd gave a strong and positive push to sales in key categories, helping the industry regain momentum heading into the festive and wedding season. Despite the temporary headwinds, in Quarter 2 of Fiscal Year 26, LG India delivered a resilient performance and reported a revenue from operations of 61.74 billion rupees, marking a year-on-year growth of 1.0% over 61.14 billion rupees in the same quarter last year.

Revenue remained stable year-on-year, reflecting underlying brand strength and consumer confidence, even as some purchases were temporarily deferred ahead of the GST rate cut announcement on August 15th and its effective implementation on September 22nd. During the quarter, we recorded a quarterly EBITDA of 5.48 billion rupees with an EBITDA margin of 8.9%, compared to 7.57 billion rupees and a margin of 12.4% in Quarter 2 of previous year.

The margin impact reflects the combined effect of rising commodity prices and incremental investments in festive go-to-market initiatives to support our distributors, retailers during this challenging market conditions. Net profit for the quarter stood at 3.89 billion rupees with a margin of 6.2%.

Let me now touch on working capital. As of 30th September 2025, our working capital cycle stood at 2.2 billion rupees, as compared to 2.0 billion rupees as on 31st March 2025 last year.

The increase was primarily due to incremental inventory in compressor-led products and temporary credit support to extend additional payment days to our trade partners, offering them greater flexibility and support during this challenging market conditions. Our cash and bank balance as of 30th September 2025 remains healthy at 42.8 billion rupees.

In line with our long-term strategy, we continue to reinvest into our business. A key example is our upcoming manufacturing facility at Sri City, Andhra Pradesh, which is poised to become a strategic asset for both domestic operations and export market.

This facility will enhance production capacity, improve logistics efficiency, and support our localization roadmap. We have a planned investment of approximately 5,000 crore rupees, which will be funded through our internal accruals deployed in a phased manner over the next 4 to 5 years.

Our business fundamentals remain strong, and our long-term strategy is firmly on track. With India's fast-growing GDP and industry reports pointing to an imminent inflection point in consumer durable demand, we are well positioned to capitalize on this momentum.

With that, I would like to hand over to Mr. Aditya Bhasin, Head IR, who will walk you through the segmental performance and share insights into our outlook for the coming quarters.

Over to you, Mr. Bhasin.

Thank you.

Thank you, Atul. Namaste and good evening, everyone.

Let me now take you through our segmental business performance for the second quarter of fiscal year 2026. Starting with our Home Appliance & Air Solution segment, the segment continued to reinforce its leadership in Q2 FY26, gaining market share across key product categories.

Despite the temporary impact of GST timing, our strong brand equity and resilient channel performance helped deliver value growth in offline market share in YTD September '25. Let me now share the glimpse of product-wise market share.

In washing machine categories, our market share stood at 33.4%, maintaining our absolute leadership in the category. In refrigerator, we stood at 29.9%, an increase of 1% compared to YTD September '24, reflecting continued strength in our core appliance portfolio.

In RAC category, our share was 17.4%, an increase of 0.5% compared to YTD September 2024. In the premium category, our side-by-side refrigerator market share increased to 43.2%, an increase of 4.5%, highlighting our leadership in the premium cooling segment.

In terms of financials, the segment reported revenue from operations of Rs 39.48 billion compared to Rs 39.53 billion in the Q2 FY25, representing a stable performance in a muted and challenging demand environment. During the quarter, the segment reported an EBIT margin of 8.2%.

The margins were tested by elevated commodity prices and higher recycling costs linked to compliance. Further, incremental festive go-to-market investments also added pressure as we prioritized consumer engagement and retail push.

Now looking ahead to the next quarters, the industry anticipates sustained demand driven by the recent GST rate cut, festive, and wedding season tailwinds, unlocking momentum across categories with premium appliances leading the recovery. With our two-pronged strategy, we are widening the price spectrum through LG Essentials and a new premium range targeting niche demand and unlocking growth in underpenetrated markets.

We are further strengthening our premium portfolio with new French door refrigerators and AI-enabled front load washing machines. Having said that, we remain cautiously optimistic across all categories, with steady demand expected in both premium and value segments.

Moving on to our Home Entertainment segment, while the TV industry continues to grow steadily, the premium segment is expanding faster than the entry-level models, where LG is outperforming the market. During the quarter, the segment reported an EBIT margin of 12.6% and recorded revenue from operations of Rs 22.6 billion, higher by 3% Y-o-Y from its 21.61 billion in Q2 FY25.

The growth was driven by demand in the TV segment on the back of the festive season. However, Information Display business has impacted due to US tariffs and current geopolitical issues leading to low infra spending.

During this period, we improved our TV market share to 27.5% in YTD September '25, a gain of 1.4%. This growth was driven by continued focus on cost optimization and a higher share of premium products in our portfolio.

Notably, our OLED market share increased to 4.2% to 62.6% in YTD September '25, reinforcing our leadership in the premium TV segment. Though the TV industry faced external headwinds in the first half of FY26, the outlook for Q3 and the second half remains positive.

The Indian market is growing steadily and supported by the festive demand and GST rate cuts. Consumer sentiment has improved, with larger screen sizes emerging as a key upgrade driver.

LG continues to lead in this space, with its premium large screen portfolio gaining strong traction across offline channels. We are well positioned to capitalize on this moment in FY26 and beyond, as we deepen market leadership through innovation and agility.

In B2B space, we are focused on further strengthening Information Display business by leveraging India's growth infrastructure, which offer significant potential. Now to summarize, the first half of FY26 was marked by temporary external challenges and muted demand across the consumer durable sector.

Despite this, LG India further improved market share and maintained its leadership in all product categories during H1, reflecting strong fundamentals, brand equity, and focused long-term strategy. Being an industry leader, our endeavor is to perform better than the industry.

With that, we conclude our remarks. We now request the operator to open the lines for the Q&A session.

We look forward to addressing your questions.

Thank you for the opportunity, sir. We discussed few factors like impact of forex, GTM investments, recycling, etc., which impacted margins in this quarter and first half of FY26.

Would it be possible to give more color on the impact of each of these factors, and do we expect some of these costs to reverse in second half? Also, can you share that is there product verticals like air conditioners or cooling products which is seeing higher pressure on profitability as we have seen in the number of other peers?

The first part of the question will be addressed by our CAO, Mr. Atul Khanna.

The second part will be addressed by Mr. Sanjay Chitkara, who is our CSO.

Gentlemen,

during this quarter, if we see that margins were came under the pressure because of external factors, where we have absorbed the cost of go-to-market initiatives and consumer promotions to support our partners to build the momentum in the market for our trade partners, as well as the consumers. With the neutral revenue growth also, which limits us to absorb our fixed cost as well.

Whereas the global headwinds of FX devaluation, rising commodity prices, which has impacted particularly the margins, and recycling cost also given a tough time this time as our target for fiscal year 2026 become 70% as per the government regulations, whereas last year, fiscal year 2025, it was 60%. Looking ahead for future, we are expecting these margins to improve through greater localization and local sourcing from India and working on our operational efficiencies.

Whereas stronger growth in the premium product segment, extension of our annual maintenance recurring income profitability where it is higher, as well as the B2B business, where the margins are a little better. We are coming up with the launch of some new product categories as well, which will add on to our volumes as well as given us economy of scale, and which give leverage to optimize our fixed cost as well.

Thank you.

I will handle the second part of the question about refrigerator and air conditioners margins, which you mentioned. See, we have never pursued the short-term margin tactics.

Our strategy has been always for a long-term, because in business, market share drives your revenue and revenue drives your profitability. With our leadership position, as Aditya Bhasin during this presentation mentioned about our market share improvement for refrigerator by 1% and air conditioner by .5%, we further expanded that advantage.

Regarding margin normalization, we have also taken a slight price increase of 1.5 to 2% for our refrigerator and washing machine case. We have also rationalized our promotional intensity, and our ongoing localization is already happening.

See, our best and biggest strength for air conditioning and refrigerator business is our in-house production of compressors, heat exchangers, PCBs, and other important subassemblies. We'll continue our such efforts and on track to normalize our margin.

Thank you very much.

Sir, continuing with this, do we assume some sort of margin improvement from the current level which we have reported in 2Q in 3Q? I am talking about the near term.

We understand that long-term you are doing a lot of initiatives in terms of localization, plus there will be reversal of some of the expenses. Any outlook which you would be able to share in the near term, especially in third quarter or fourth quarter?

This answer will be addressed by our respected CFO, Mr. Dongmyung Seo.

구체적인 수치에 대해서는 언급하지 못하는 점 이해 부탁드립니다. 자사는 중장기 전략에 집중하고 있습니다.

2022년 이후 매출 연평균 성장률은 13.1%이며, 두 자릿수 EBITDA를 기록하고 있습니다. 2026년도 회계연도는 쿨 서머, 국제 지역 간 긴장, 환율 및 관세 변동 등으로 인해 어려웠으나, 경쟁사들은 큰 타격을 입었던 것에 비해 자사는 이제 크게 영향은 없었습니다.

자사는 B2B 프리미엄 세그먼트에 집중하는 동시에 시장에서의 첫 구매자를 대상으로 LG Essential 출시를 통해 대중 시장으로의 진출을 추진함으로써 업계 및 기존 기준을 뛰어넘는 성과를 달성하고자 합니다. 자사는 HVAC 및 정보 디스플레이 분야의 글로벌 경쟁력을 바탕으로 B2B 시장에서의 성장 동력을 창출하고 있으며, 동시에 AMC와 같은 고마진 추가 수익원에 집중하고 있습니다.

자사는 스리시티에 건설 예정인 제3공장을 통해 프리미엄 모델의 신규 수출 지역을 모색하고 있습니다. 2026년도 회계연도 2분기 현지화율은 자체 사이드바이사이드 및 컴프레서 생산 덕분에 55.8%로 상승했습니다.

Make in India 목표하에 우리는 현지화를 더욱 추진해 나가기 위해 노력하고 있습니다. 이러한 추진력이 지속 가능하고 수익성 있는 성장의 다음 단계를 이끌어 낼 것이라고 확신합니다.

Please understand that I will not be able to open specific figures in today's event. What LGEIL remains focused on is our long-term strategy.

Revenue CAGR since 2022 stands at 13.1% with double-digit EBITDA. Although FY 2026 was challenging due to cool summer, regional tensions, foreign exchange, and tariff shifts, our impact remains minimal, unlike other competitors.

By focusing on premium segments in B2C along with launching LG Essential that targets first-time buyers, we aim to penetrate the volume zone, eventually surpass industry standards and existing benchmark. With our competitiveness in HVAC and Information Display, we are creating growth momentum in the B2B market, and focusing on additional revenue sources like AMC that can generate high margin.

LGE India will be exploring new destinations to export premium range of products for broader market from the third factory that will be built in Sri City. Localization rose to 55.8% in Q2 FY26 thanks to in-house side-by-side and compression production.

Under the Make in India initiative, we are committed to drive our localization furthermore. We are confident that this momentum will fuel the next phase of sustainable, profitable growth.

Thank you.

My second question is on LG Essential Series, which you just spoke about. What is the rollout plan here, market response so far, and the price positioning of these products if you can share?

Thank you. 롤아웃 플랜, 가격대.

This question will be addressed by our CSO, Mr. Sanjay Chitkara.

Our Essential Series is built on an insight which we have taken from 1,200 households in India. We interviewed them to understand their daily realities and what are their expectations from our product.

During our survey, we found more than the affordability of the product, their needs are totally different. They want more energy-efficient products.

There is a challenge for low water pressure for the washing machine, and for refrigerator, they don't want to defrost the refrigerator. We introduced a few SKUs during last month, during Diwali month.

Currently we have introduced 8 kg top loader and 225 L of refrigerator. Balance two models we will launch during this year.

We will soon launching a .9 ton RAC, microwave, and with air fryer kit also. Since it's a placement and we are getting a good response through our dealer network.

Thank you very much.

Anything on price positioning, sir? That is the last question from my side.

Thank you.

Yeah. These prices, we have very aggressively priced these products, and we have given a very compelling reason to entry-level customers to upgrade their first purchase so that we exceed their expectation from this product.

We should be their first choice while their next premium upgrade. Regarding price, these prices are lower than 20,000 prices.

A washing machine is priced roughly around 16,000 -- between 16 to 18,000 rupees. Refrigerator also in the range of 20,000 rupees.

These products are available in the market, and we are getting a very good response from customers. Thank you very much.

Thanks for the opportunity. Two questions: what is LG Electronics India's current export status and future strategy?

What was exports as percent of net sales in this H1 FY26 also? Thanks.

This question will be addressed by our respected CFO, sir, and the second part will be from Mr. Atul Khanna.

당사는 현재 네팔, 방글라데시, 중동, 동남아시아 등 인근

54개국에 현재 매출액 5.6%를 수출하고 있습니다. 강력한 제조 역량과 오퍼레이팅 우수성을 바탕으로 당사는 LG그룹의 글로벌 생산 거점으로 부상하고 있습니다.

글로벌 사우스 전략, 즉 급성장하는 신흥 시장에서의 사업 확장에 LG 인도 법인은 현재 LG 본사의 수출 전략 중심부에 위치하려고 하고 있습니다. LG 인도 법인은 당 공장에서 프리미엄 제품군을 더 넓은 시장으로 수출하기 위한 새로운 수출처를 모색할 예정이며, 확대 추진 중인 수출 국가에 맞춘 생산 라인 수정 등 내부적인 준비는 차질 없이 진행 중입니다.

RAC와 컴프레서 생산부 건설을 시작했으며, 내년에는 냉장고와 창고 생산부를 확장할 예정입니다. 또한 미국과의 관세 협상 등 정부가 추진 중인 주요 국가의 우호적인 관세 협상은 향후 환경 개선 요인으로 기대하고 있습니다.

Exports to 54 neighboring countries, including Nepal, Bangladesh, the Middle East, and Southeast Asia contributes to 5 to 6% of LGEIL's revenue. With our strong manufacturing capabilities and operational excellence, LGEIL has emerged as a global production hub for LG.

Under the Global South initiative to expand business in the emerging market, LGEIL now stands at the center of LG HQ's export strategy. LGEIL plans to identify new export destinations from our third manufacturing facility to expand exports of premium products to wider markets.

Internal preparations are underway, including revisions to the production line tailored to the expanding export markets. We have commenced the construction of RAC and compressor production buildings, and we plan to expand the refrigerator and warehouse production facilities next year.

Additionally, the government's ongoing efforts to establish favorable tariff agreements with major countries, including the US, are expected to serve as a positive factor for future environmental improvement. Thank you.

Adding to your second question on first half of fiscal year 2026, our exports contribution reached to almost 7%, whereas last year, full year fiscal year 2025, we were at almost 6%. Thank you.

Second question now on the capex side for the new Sri City plant. Can you please elaborate and share the timelines, what are the product lines over there, fiscal benefits that we would be getting at the plant, and what will be advantages in GTM, especially the plant is in South India?

Thanks.

This question will be addressed by our CAO, Mr. Atul Khanna.

Thank you for this meaningful question, gentlemen. We are driving our third factory plant at Sri City with a total investment of outlay of 5,000 crore rupees to be deployed in a phased manner over the next few years, 4 to 5 years.

The new plant is being built to support rising demand considering low penetration, which will increase going forward, rapid urbanization, and rising income level as well. South India business contribution nearly to almost 38 to 40% in our total business gives us leverage to optimize logistics cost, reduce supply chain lead time.

As we build on our production capacity, it will help us to expand our export horizons under parent's Global South strategy and strengthen our supply chain. The Sri City factory will start operations in phased manner, as we had got a government order for fiscal incentives to the tune of 100% capital subsidy to be realized in 20 years from the start of production in a phased manner.

The plant will be built on almost 1 million square meter site under the 99-year lease agreement, with a roadmap to scale in line with our market demand. The first product line of operations will be room air conditioners, which will be operational by October 2026, followed by aircon compressor line in quarter 4 of fiscal year 2027.

Thereafter, washing machine and refrigerator line in a phased manner. We will be funding this capex from internal accruals in a span of 4 to 5 years, doubling our capacity as the plant gets fully operational by fiscal year 2029.

Adding to your question, we continue to invest for our two existing plants as well for the automation and modification. Thank you.

Thank you. Very helpful.

Yeah. Thank you for the opportunity.

Sir, the first question is on the medium- to long-term outlook of 3 to 5 years. What is the rate of revenue growth and the margin expansion that we are planning, or we believe we can deliver, and what are the key levers for that?

This question will be addressed by our CSO, Mr. Sanjay Chitkara.

If we see, we have been growing with 13.1% CAGR growth, and our EBITDA is on double digit. Being a sales leader, we will definitely drive to catch our previous triggers.

The major levers for these growths are our new Essential Series, for which we are expanding the premium product coverage to our mass customers. Also, we are scaling up our B2B business, which is HVAC and Information Display panels.

Other than this, we are also creating a revenue stream, annual maintenance contract. It is not only helping us to create a service revenue, but also helping us to retain our loyal customers.

With the help of all these initiatives, we will try to surpass our previous benchmark. Right now, due to regulatory issue, I cannot give you the forward-looking numbers, but this is the color for our future growth.

Thank you very much for this question.

Sir. The second question is on our B2B business.

How much it contributes in our total sales now, and what are the strategies to grow it further?

Our B2B business is contributing roughly 6% of our business, and it is majorly driven by IT and Information Display panels and HVAC ACs. Currently, we have seen there is a pressure on this segment due to US tariff changes that led to the budgetary reallocation and key segments like IT and display solution.

Our win rate is very strong, and we will continue to maintain a healthy pipeline. This is just a timing shift, and there is no structural demand issue for B2B business, and we are expecting a momentum to return micro conditions will stabilize.

Our biggest strength is our B2C reach for our B2B business. We have also a biggest strength of our India localized products.

Up to 86-inch of Information Display panels, we produce within our factory. About our HVAC also, we have inverter ACs.

Very soon, the BEE star rating guideline will come for HVAC business also, and there we will get the advantage of inverter transition. Our B2B growth projections are very promising, our profits are better than B2C, and we will continue this growth momentum.

Thank you very much.

Okay. Thank you, sir.

Thank you for taking my question.

Thank you so much for the opportunity, sir. My first question is an extension to the earlier participant and I think some of your earlier initial remarks as well.

LG globally is a very large player in data centers, right? Just wanted to understand how does this bode well for the Indian entity, given we are seeing a lot of traction in India with respect to data centers?

Just some thoughts and numbers that you'd want to share would be very helpful. That's my first question.

Hi, I'm Aditya. I will take up this question.

Currently, we do not have a concrete plan. We have done couple of data centers at a very small level.

If we talk about the total comfort of this data center, we are still in the projects and we are exploring some new pipelines for that. We will not be able to comment more in detail as of now, but we will definitely share as and when we get new projects, we will share it with you.

Thank you.

Sure. My second question is on localization.

You mentioned that localization currently is about 56%. Just wanted to understand that over a 3- to 4-year timeline, what is the target that you have in terms of localization, and what is the potential margin improvement that we can see because of this initiative?

I'll address this question to Mr. Sanjay Chitkara.

Thank you very much for this question. Our current localization is around 55.4%, and in last three fiscal year, we improved it 2 to 3% every year.

Our target is to continue this 2 to 3% localization further in next coming 3 to 4 year, and we want to take it to around 70%. Recently, we have done a lot of development for our localization: all glass items, resins, raw materials we are trying to localize.

Our biggest strength is our in-house compressor production. We started our local RAC compressors in year -- financial year 2023, and this year we used our second -- this is the second year when we used our internal compressors.

Also, previously we were importing the premium products from Korea like OLED TV and side-by-side. This year -- last year, we started manufacturing premium TVs like OLED TVs and side-by-side also in our Pune factory.

We'll continue our localization efforts, and this this also help us to mitigate the global ups and down and forex impacts. Thank you very much.

Sir, just a clarification on that, any margin uptick that we can expect as the localization initiative moves forward? What's the sort of margin improvement that we can see?

This question will be addressed to Mr. Atul Khanna.

As we enhance our localization, we need to do some investments, number one. Number two, definitely every year there would be a FX impact of around 3 to 4%, which we would be adding to our margins with a smaller pie as well as sometimes larger pie.

As we did aircon compressor localization, which was our biggest contributor to the air conditioners business. We have a plan, and there are other plans like we are doing some other air conditioner remotes, as well as increasing our panel modules localization for currently we are doing ultra HD, we are moving it from full HD TV panel modules also through local sourcing.

A lot of subassemblies we are manufacturing, and there are impact of duties, there is a logistics cost, which we will add on to our margins, as well as the FX inflation. That would be adding.

Currently, we cannot call it exactly the number how much percentage it will add, but it depends upon various product category with respect to different subassemblies, as well as local components. Thank you.

Sure. Sir, my third question is, is there a number that if you could give out, you mentioned initially that there have been some channel support scheme that have been given.

Just if you could just call out what is the quantum of that, and in the third quarter, how much of a drop that has seen? Thank you so much.

This question will also be addressed to Mr. Khanna.

Gentlemen, the consumer promotion schemes which we normally offer to the trade are sometimes we need to see the market dynamics, and we cannot share you exactly the number on that part. We normally adjust those temporary supports which we give to the trade partners as well to give the boost in the momentum in the market and win the trust of partners as well as keep the momentum high for consumers.

We normally adjust this promotion schemes depending upon business scenario and other business impacts. Thank you.

Thank you and all the best. Those were mine.

Hi. Thank you for the opportunity.

My first question is around revenue growth. There was definitely a lot of noise in the Q2 numbers.

If you could share what was the GST-led impact? Also, would like to know what is your confidence in driving the business returning to this double-digit growth pace in the second half of the year?

You have talked about initiatives on Essential range launch. There is also going to be rating changes for air conditioners starting January.

Also, if you could accompany this with some color on on-ground demand and inventory levels across your key product segments. Thank you.

Both these questions will be addressed by Mr. Sanjay Chitkara.

Thank you for asking this question. See, as my colleague mentioned about the challenging market condition, our industry faced a cool summer, geopolitical tension, tariff escalation.

The biggest challenge which we face for Q2 is the GST cut was announced on 15th of August, but implemented on 22nd of September, which led to the deferment of the purchases by our partners and customers, and that put a temporary pause to complete buying. Let me tell you, we covered within one and a half month the three months sale, and we grew in Q2 against 61.14 of last year billion INR, we registered 61.47 billion INR.

We also produced a EBITDA of 8.9%, which is industry leading. Apart from this, instead of focusing on short-term challenges, we improved our market share.

Our market share improvement for refrigerator case was 1%, and TV case 1.4%, and air conditioner, our market share improvement was .5%. Our brand strength is at its peak.

During September month market share report, we created ever time highest gap with number two brand. Our TV gap in September was 6.7% as compared to number two player, and on YTD basis, it was 4.3%.

For side-by-side, we created almost 13% gap with number two player, and for refrigerator, almost a 6% gap. We were number two player for air conditioners for overall air conditioning category, but we were number one player for inverter AC.

This year, we are number one player for overall as well as the inverter ACs. This performance clearly demonstrate the underlying strength of our brand, our diversified portfolio, and resilience of our business model.

Thank you very much.

Sure. Mr.

Chitkara, I was just trying to gauge whether some of these GST challenges are not behind us, and the confidence that we go back to those double-digit CAGRs that you have registered in the past. That was the intent to just check.

In case it's possible for you to call out any of these one-off impacts in terms of or quantify it. The second piece that broadly I was just trying to understand was when we look at your margin trends, you have delivered in first half EBITDA margins of 10.8%.

Clearly, it's industry-leading and good in the context of challenging environment. This compares again a 13% margin that you have delivered in FY25.

Just trying to understand given all the kind of investments that we are going to see over the coming quarters, coming months in terms of new category interventions, localization, exports, B2B, what is the feasible margin outlook range in your view over the medium term for the business? Thank you.

That's all from myself.

This question will also be addressed to Mr. Sanjay.

Latika, that tough phase of transition of GST is now behind us. GST has been fully implemented, partners' inventories are getting normalized, and new star rating norms will be effective from next year.

This additional cost of an energy-efficient products has been already absorbed by GST benefit, it will not be passed to our customer. Our Essential Series is also expanding the access to the value segments, while premium products are also growing.

Talking about margin, margins are a function of revenue and input costs. Recently we have taken a price increase, as I mentioned, 1.5 to 2% for washing machine and refrigerator case.

We have also rationalized the promotional intensity which we introduced during the festival time, and our ongoing localization will also support us for our margin case. Regarding company's growth, see, our fundamentals are very, very strong.

Our market shares are increasing, our demand pipelines are very healthy, inventories are getting normalized, and brand strength is at its peak, as I have mentioned. Very soon, we will try to catch our previous sale growth and margins.

That's the maximum I can explain you right now at this point. Thank you very much.

This is super helpful. Thank you so much and all the best.

Thank you for opportunity. My first question is related to the market share gain in your key product categories.

In some of the categories where you already holds a very high or a leadership position, where do you see further scope for a market share gain or do you believe somewhere it's a saturated?

This question will be addressed to Mr. Sanjay Chitkara.

Thank you. I am a sales leader for LG Electronics, and it is my day and night endeavor to improve market share of the company.

There is no limit. If you see our OLED market shares are touching 62%, and that's the market share we will benchmark for other products also.

If I talk about our microwave market share, it is 45.4%. See, just the half of the market is with LG Electronics.

Washing machine also 33.4%, the gap with number two player is around 16%. We will definitely like to catch the market share of these products.

One very important thing we need to understand, when the market share comes for the premium product, LG's market shares are very, very high. It's above in the range of 40%.

Volume zone also, we are market leader, but relatively less. India is moving towards its premiumization, and LG is moving very fast towards premiumization.

When our premium product portion will improve, our overall market share will improve, our profit will improve. This is the whole summary of my submission.

Thank you very much.

Thank you for that, sir. Next question is related to what you had mentioned about the refrigerator and washing machine.

You had taken a 1.5 to 2% of price hike. Is that a price hike in the Q2 and absorbed already in the market or yet to?

This question will be addressed to Mr. Sanjay.

This price increase, we have done in the month of October, which is Q3. That price increase was not in Q2.

With an initial consensus with partner, which obviously takes time, a week or 10 days, now the sell-in has already started at the new prices. These prices are getting settled.

See, during Diwali time, we always do very aggressive promotion, but post Diwali, we rationalize our promotional intensity. It's a yearly affair and it is nothing new for us.

We handled such situation in past very successfully, and this time also, we also handled this activity very successfully. Being a market leader, other brands also benchmark us.

When we take such efforts, they also benchmark us. Thank you.

Thank you very much.

Thank you for that. The next question is some numbers, if you can share.

Product-level revenue if you can share, and the capex for '26 and '27.

This question will be addressed to Mr. Atul Khanna.

Gentlemen, as you have asked for the product-wise revenue, though we have given the segment-wise revenue already in the stock exchange as well as in the newsprint also, we cannot share exactly the product-wise revenue like refrigerator, washing machine, because it is a competitive sensitive information. Coming to your second question regarding capex, we normally do capex investment in the range of 2 to 2.5% of our total revenue yearly.

We would be continuing for our existing two plants, as I said in my previous answer about the capex. Secondly, the meaningful investment would be coming in for our third factory, which would be in totality 5,000 crore rupees within a span of 4 to 5 years.

The construction has already started. We would be doing a phased manner investment, almost you can say I will tell you around 1,000 to 1,200 crores per year.

In the first year, fiscal year 2026 would be a little larger, whereas the capitalization will happen in fiscal year 2027, because our first line of operations will start from October 2026. The second line of aircon compressor will start in fiscal year 2027 only by March 2027.

By that way, we are confident. We are on the right track in doing our construction of our plant in Sri City.

Thank you.

Thank you, sir, and all the best for future.

Thank you.

In the interest of time, we are closing our call, but you're always welcome to give me a call since you all have many questions and I'm waiting for that. With this, we end our call today, and on behalf of LG Electronics India Limited, we thank you for joining us, and you may now disconnect your calls.

Thank you.