LG Electronics India Limited (LGEINDIA) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the LG Electronics India Q2 FY27 Earnings Conference Call. As a reminder, all pass-in lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Taneh Shah from Dam Capital. Thank you, and over to Mr. Shah.

Thank you so much. On behalf of Dam Capital, I would like to welcome you all to the Q2 FY27 earnings conference call of LG Electronics India Limited. I would like to inform you that the call is being recorded, and the audio call and transcript will be available on the company website. I would like to thank the LG Electronics Management for giving us the opportunity to host the call, and now would like to hand us a call to Mr. Aditya Basin, Head Investor Relations of LG Electronics India.

Thank you, and over to you, sir. Thank you, Taneh. A very good evening to everyone. I would like to welcome you to the Q2 FY27 Earnings Conference Call of LG Electronics India Limited. Hope you have gone through our earnings presentation, upload it on our website, and stock it, please. 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 company faces. We have our senior management here today with us, being represented by Mr. Hung Joo John, Chief Executive Officer. Mr. Dongmyung Soh, Chief Financial Officer. Mr. Sanjay Chitkara, Co-Chief Sales and Marketing Officer. Mr. Atul Khanna, Chief Accounting Officer. Mr. Gaganjeet Singh, Chief Manufacturing Officer. Mr. Gurbinder Singh, Head Financial Planning. Mr. Sunju Soh, Investor Relations Officer. And Mr. Jongwon Byon, our Export Head. Without further delay, I would like to invite our respected CEO, Mr. Hongju Jeon, to share his opening remarks and take us through the LG Electronics India's performance and strategic highlights for the quarter and the full year. Thank you, and over to you, sir.

Good evening, everyone. Today is a very special moment for LG Electronics India, as we celebrate one year. Since our successful listing. First of all, I would like to sincerely thank all of our shareholders for your continued trust and support. The past year has been challenging for the entire industry. Despite these challenges, we continue to deliver strong results. In the first half of the year, we achieved double-digit growth and double-digit profitability. We also maintained our market leadership and delivered meaningful value to our shareholders. For almost 30 years, LG Electronics India has led the Indian consumer electronics and the home appliance market as a global company operating in India. Today, however, we are no longer just a global company operating in India. We are deeply rooted company in India that understands Indian consumers and brings value to their lives. Over the past year, we have grown together with India guided by three key visions, Make for India, Make in India, and Make India Global. Today, I would like to share our progress with you. First, make for India. Our greatest strength is our ability to understand the needs and lifestyles of Indian customers and offer products that best meet their needs. In India, home appliance ownership is still relatively low, while the middle class continues to grow. So, as a result, More customers are entering the market. At the same time, demand for premium products continues to increase. To meet these needs, LG continues to lead the premium market. We have also launched the LG Essential 3s designed for the needs and living conditions of Indian customers. Through this series, we are reaching a wider group of customers. For example, we offer fully automatic washing machines that work well even with low water pressure. We also offer double-door refrigerators that automatically adjust their cooling temperature to changes in outside temperature. By providing these essential features, we are getting closer to customers who are buying their first home appliances. The construction of our third manufacturing plant in Sri City is progressing very well. In fact, corporations are moving at record speed, impressing even the state government. We plan to start compression production by the end of this year, followed by air-conditioning production. Going forward, we will work closely with LG Electronics Global Headquarters to bring our combined strengths and capabilities to India. From product planning and development to manufacturing, we will provide one solution in India. Through this approach, we will continue to lead market in India. Finally, make India global. Our exports are no longer limited to neighboring countries. We are expanding our exports to mage markets around the world. We understand that India has a vision to become more than just a market that buys products from this world. India aims to become a global manufacturing company. Hub that makes products for the world. LG Electronics India will do its best to support this vision by working closely with the Indian government. Based on these three visions, Make for India, Make in India, Make India Global, we will continue to achieve sustainable long-term growth. Now, I'd like to share a few more key strategies for our future growths. First, our entry into the vehicle solution business. Today, I'm very proud to announce that we are entering the vehicle solution business in India. Vehicle Solutions is one of LG Electronics' key global B2B business, This is covering Automotive infotainment and telemetrics products. We will bring these products to India and plan to manufacture and supply them for our new third plant in Sri City. This is an important milestone in our journey beyond the custom electronics and home appliances. It will also strengthen our position in the fast-growing B2B market. We expect this business to become another gross engine for LG Electronics India. It will help us expand our business portfolio and create long-term value for our shareholders. For almost 30 years, LG has been Part of the everyday life in Indian homes. Now we want LG to be part of everyday life on Indian roads as well. Second, expansion into new product segments. We plan to introduce new products including chest freezers and built-in kitchen solutions. This will give us our customers more choices. We are also actively exploring opportunities in new areas where we don't currently operate. Through these efforts, we will find new growth opportunities and further strengthen our future business portfolio. Third, our expert performance and future plans. This year, We have expanded our export market to 68 countries. We also expect significant growth in export revenue. In line with the Indian government's policies, we plan to further expand our exports. This will help us strengthen our competitiveness in the domestic market. and improve profitability. It will also support our business operations in several ways, including helping us manage foreign exchange risks. Finally, growing together with our employees in India, LG Electronics India has received the Great Place to Work Award for the third time in a row. This is a very meaningful achievement for us. It shows that we are not only creating value for our external customers, but also providing workplace where our employees can grow. It also reflects the mutual trust we have built with our employees. Going forward, we will continue to build a healthy corporate culture and a stable, strong company. We are building LG Electronics India not only for the India of today, but also for the India of tomorrow. With our talented people, future technologies, and strong commitment to the Indian market, I firmly believe that LG's best days are still ahead of us. We will continue to build strong company and deliver the great value to our customers and shareholders. Thank you very much.

Thank you, sir, for sharing your strategic message. Namaste and very good evening once again to everyone joining us today. I am Atul Khanna and I will take you through our financial performance for the quarter. A quarter that reflects consistent execution, disciplined cost management, sustainable margin growth, and continued strength of our business fundamentals. I am pleased to share that quarter 2, financial year 27, marked our second consecutive quarter of strong double-digit growth and in fact our highest growth quarter since our listing last year, a clear and encouraging sign of sustained momentum across our business. Revenue from operations came in at a robust 73.8 billion INR, growing a healthy 19.5% year-on-year. With every key category growing in high-team double digits, our profitability kept the pace with this growth, with EBITDA rising sharply by 28% to I&R 7.01 billion and margin expanding meaningfully by 63 basis points to 9.5%. Profit after tax grew an impressive 25.7% to INR 4.89 billion, reflecting the quality of our earnings. Looking at the first half of the year, revenue from operations grew 17.5% to 146.13 billion INR. EBITDA grew a strong 27.9% to 16.16 billion with margin including 11.1% and FAT rose to 26.5% which is 11.42 billion, giving us a solid and confident platform as we head into the festive season. I wanted to highlight that this margin expansion came through even as we navigated a challenging external environment marked by elevated commodity prices, forex fluctuation headwinds, and go-to-market investments made during the quarter to ensure general readiness ahead of the festive season. Strong operating leverage from healthy volume growth. Combined with a richer premium mix across both our segments offset these measures highlighting the strength and flexibility of our cost structure. Moving to our balance sheet, our cash and bank balance stood at a healthy 50.51 billion INR as of September 2026 compared to 55.07 billion at the start of the quarter. This reflects a well-planned build-up in a working capital of 6.56 billion INR as we invested proactively in channel stocking ahead of the festive and wedding season. We view this as a thoughtful and efficient use of capital, one that positions a swell for a strong sell-through in the up-quarter ahead. On capital expenditure, We invested a meaningful $8.7 billion during the quarter towards tangible assets, compared to $2.3 billion in quarter 2 of last year FY26, as work on our ambitious state-of-art manufacturing facility at Shiri City, Andhra Pradesh. It is continuing to progress steadily and in line with our internal targets. Backed by a committed investment of 50 billion INR, over the next few years, Shere City will become our third and most advanced manufacturing base, which will double our existing production capacities and serve as a dedicated hub for both domestic and export market. We remain firm on track to commence compressor manufacturing at the facility in the third quarter of this fiscal year. A milestone that will strengthen our cost competitiveness, deepening our localization levels, and support the next phase of our growth, both domestically and in global markets. With that, I will hand over to Mr. Aditya Basin, our Investor Relations Head, to walk you through our segment performance and outlook in greater detail.

Over to you, Aditya. Thank you, Atulji. Namaste, and a very good evening once again to everyone. Let me take you through our segment performance and outlook for the quarter ahead. Starting with home appliance and air solution, in Q2 FY27, we registered our highest quarterly growth since listing, with revenue of INR $47.72 billion, up by a strong 20.9% year-on-year. I want to spend a moment on what really driving this, rather than just the headline number. All our key categories, washing machines, refrigerators, and room air conditioners, grew in double digits, while dishwashers delivered a genuine breakout quarter. Along with that, growth came from both volume and value, with our premium and our essential range moving together is the clearest sign of the strength of our two-track strategy. On margins, we did something a bit different this year. Rather than raising the prices across the board, we went category by category, absorbing the rise in copper, aluminum, and plastic costs in a more targeted way. We also moved early ahead of the rest of the industry, and we were careful to protect our mass segment while letting our premium range carry more of that burden. That discipline, combined with strong operating leverage from volume growth across the categories, is exactly why segment EBIT grew a healthy 28.4% to INR 4.16 billion with margin improving to 8.7% from 8.2%, even in a cost environment that was challenging for the entire industry. I also want to call out our. Thank you. Underneath all of this is something simple. We have built strong India-focused R&D over the years and that let us move quickly on what Indian consumers actually want. The LG Essential range is a good example conceived and designed specifically for this market and it is now paying back handsomely in both volumes and profitability. This segment is also where our export story is becoming most visible. The essential range is now traveling well beyond our borders, and our large-sized refrigerators and washing machines have started reaching key global markets as well. Exports are steadily becoming a second-demand lever for this segment, alongside our domestic growth. Looking at the third quarter, as we head into the festive quarter, we go in with the lean, healthy channel inventory, and strong partner confidence built on our track record of price stability. Premium categories, such as trench door and side-by-side refrigerators, 8kg plus washing machines, And dishwashers are expected to sustain their momentum, while upcoming compressor facility at Sri City will power the next phase of growth for this segment. Turning to home entertainment, Revenue grew a solid 17.2% year-to-year to INR $26.08 billion on a high base, our third consecutive quarter of double-digit growth. And the real story here is a shift in what Indian households want in their living rooms. Indian consumers are moving towards larger screens, and we don't think this is a one-season spike. It looks like a structural change, and we believe we are still early in that curve. Our offline value market share climbing to an all-time high tells us we are capturing our fair share of this upgraded cycle. On margins, we were managing a genuine balancing act this quarter. Elevated memory chip and currency pressures on one side. The need to invest in the go-to-market activity to win shelf space ahead of the festive season on the other. Segment EBIT still grew a healthy 19.9% to INR 3.37 billion, with a margin improving to 12.9% from 12.6%, helped by strong volume growth that gave us real operating leverage, on top of a richer mix of larger screen size doing the uplifting on margin. Rather than relying on the price increase alone. I also want to flag our B2B information display business specifically. It has moved to a second profit engine sitting alongside television, which carries a steady margin profile and gives the segment a cushion that is not always visible from the outside. With our television market share at a record high, the addition of mini-LED models is a deliberate move to capture consumers who want premium picture quality without stepping all the way up to the OLED, widening our funnel rather than cannibalizing it. Heading into the festive quarter, our go-to market investments position as well. For strong channel readiness, and we expect our B2B business to sustain its improved profitability through the season. Looking ahead to Q3, the festive and the wedding season should be the single biggest driver for this category, as consumers keep trading up to larger, more advanced screens, and we expect that to support the healthy value growth across the industry, and not just for us. On the B2B side, Our order pipeline for information display remains healthy, and we expect institutional demand to stay steady throughout the quarter. Taken together, we go into the festive season with a portfolio, mini-LED, QNET, and OLED that is built to capture demand at every price point a consumer wants to trade up to. Stepping back from the segment performance, I want to leave you with a bigger picture. Our Make for India, Make in India, and Make India Global Vision continues to come together in a way that feels increasingly real and not just aspirational. We have now entered more than 20 new export countries since our listing, and our three-city plant remains firmly on track to commence compressor manufacturing in the third quarter, a milestone that strengthens our localization and gives us more firepower for both domestic and export demand. Our entry into vehicle solution is a good example of where this vision is heading next. It is genuinely new growth avenues for us, well outside our traditional categories, and it reflects the confidence we have in India's manufacturing ecosystem. We see this as the first of several such moves as we build our three-city into a true multi-category hub. Now, bagged by a strong first half, Though our guidance for full year FY27 was in mid-team revenue growth and early double-digit EBITDA margin remains same. However, our endeavor is to perform better than the stated guidance and industry. We go into the second half with real confidence built on broad-based growth across both our segments. As a fast-scaling export business and a festive season that is shaping up well on the ground. With that, I conclude our prepared remarks, and we will now open floor for the questions.

Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask questions may please press star and one on their touchtone phone. If you wish to withdraw yourself from the question key, you may press star and two. Kindly note that management will use English-Korean translation for better communication. Hence, there could be a slight delay in the responses. Please note the management line will be on mute mode till then. In addition, we request all the participants to kindly limit their questions to only two. For follow-up questions, you may rejoin the queue. We'll take the first question from the line of Natasha Jain from Phillip Capital. Please go ahead.

Thank you for the opportunity. My first question is, how is demand trending across your key categories, your AC, ref, washing machine, and TV, as you enter second half of FY27? And within each category, what are the sub-segments or formats driving growth, and how has the festive season shaped up so far? Also, given that quarter three is typically an off-season for RAC, are you seeing any change in the seasonality pattern this year?

This question will be translated into the Korean language first.

Thanks, Natasha, for this question. In fact, there are so many questions. The demand picture of all of our categories heading towards Q3 and Q4 is actually quite encouraging. We have just come out from Q2, where our every single product category has delivered a double-digit revenue growth. And our appliances category registered highest ever growth since our listing. So what we are seeing now is the momentum has continued into the ongoing quarters, and that gives us a lot of confidence. Now talking about each individual categories regarding television, the festival season is playing out very well for television. Our newly introduced unit range is helping to grow 55 inch. And about segment and which is now contributing more than half of our TV revenue. Interestingly, the mass segment, which is 32 inch, is also seeing pickup. And that tells us that consumer across all income level are participating in this festival cycle. And which is very healthy sign for the industry. On washing machines, we have seen the highest growth in last eight quarters. Mainly led by fully automatic washing machines because the upgrade cycle of semi-automatic to the fully automatic cycle to the machines is helping us very fast. Our fully automatic portion has now crossed 60% of our overall washing machines. Regarding refrigerator, premium multi-door format that is side-by-side refrigerator and French-door refrigerator are growing more than 50%. And single door refrigerator has been also, the growth is double digit. So this is indicating a strong recovery from the mass market as well. It also demonstrates that LG is a formidable player across all price point. Lastly, the RAC, which is perhaps the most interesting phenomenon we are seeing this year. Because our Q2 sale is better than Q1, despite of its being off-season. It's mainly driven by elevated temperature across many parts of India. For LG, Q4 is our biggest RAC sales period, where we do roughly 55% of our yearly sale. And we believe that the current momentum will continue for Q4 also. To meet this demand, our Shree City plant is getting ready to deliver the new range of AI air conditioners with in-house compression. We believe that the coming two quarters will be better than H1 of this year.

Thank you very much.

So, my second question is, I would like to ask about the new vehicle solutions business. This is a new area since LG India has primarily been a consumer electronics company. So, could you explain why you decided to enter this business in India and what strength LG category brings, and how do you plan to build and grow this, and how does it fit into your long-term strategy?

This question first will be translated into the Korean language. This question will be addressed by our respected CFO, Mr. Dong Hyun, sir.

The car is changing. The car is more connected, more digital, and smarter. The car is creating a large part of the car. The car is creating a large part of the car. The car is a growth story.

Thank you for the question. Let me start with why we are entering this business. India is one of the largest and fastest-growing automotive markets in the world. Vehicles in India are also evolving, becoming more connected, digital, and intelligent. This is creating significant opportunities in automotive electronics, and LG Electronics India wants to be part of this growth story.

신도 LG전자에게 있어 이는 사업 다각화의 여정에서 의미 있는 한 걸음이기도 합니다. 자사는 지난 30여 년간 상탄한 소비자 가전 사업을 구축해 왔지만 사업 성장관계를 생각할 때 B2B 부분으로의 확장은 전략적 우선순위입니다. BS 사업은 현재 자사에게 주어진 가장 매력적인 B2B 기회 중 하나이며 또 다각화 된 기업이 되겠다는 자사의 큰 비전에도 자연스럽게 부합합니다.

For LG Electronics India, this also marks an important step in our business diversification journey. We have built a strong consumer durables business over the past 30 years, but as we look to our next phase of growth, expanding into the B2B business is a strategic priority. The VF business represents one of the most attractive B2B opportunities for us and fits naturally with our broader vision of becoming a more diversified company.

LG는 글로벌 시장에서 강력한 전장 솔루션 사업을 구축해왔으며 세계 유세의 많은 완성체 업체들과 협력하고 있습니다. 자사는 차량을 디지털 세계와 연결한 핵싱 기술인 텔레메틱스 분야의 글로벌 리더입니다. 따라서 이러한 역량을 인도에 도입하는 것은 과외 자사에게 자연스러운 행보입니다.

LG has built a strong vehicle solutions business globally and works with many of the world's leading automakers. We are a global leader in telematics, a key technology that connects vehicles to the digital world. Bringing these capabilities to India is therefore a natural next step for us.

사사는 메이크인 인디아 전략에 맞춰 3G 공장에서 현지 생산을 할 것입니다. 현지 생산은 사사의 경쟁력을 높이고 인도 자동차 고객들이 요구해 더 잘 보호할 수 있게 해줄 것입니다. 이는 인도에서 전장 솔루션 사업이 단기적으로 성장할 수 있는 탄탄한 플랫폼이 될 것입니다.

In line with the Make in India initiative, we will manufacture locally at our three-city plants. Local manufacturing will strengthen our competitiveness and help us better meet the needs of automakers in India. This will provide a solid platform for the long-term growth of our vehicle solutions business in India.

사자의 VS 사업의 계획은 단계적인 성장입니다. 텔레메틱스부터 시작하여 인도 시장을 위한 다른 전장 솔루션으로 점진적으로 확대해 나갈 것입니다. LG의 글로벌 기술과 엔지니어링 및 품질 역량의 지원을 바탕으로 이 사업에 탄탄한 기반을 구축할 수 있다고 확신합니다. 가전사업은 앞으로도 자사의 핵심 성장의 인지로 남을 것이며 VS 사업은 인도 LG전자에게 추가적인 성장축을 만들어 장기적으로 인도 LG전자를 더욱 강한 기업으로 만들어 줄 기회입니다.

Our plan is to grow the VF business in phases. We will start with telematics and gradually expand into other vehicle solutions for the Indian market. With the support of LG's global technology, engineering, and quality capabilities, we are confident we can build a strong foundation. Our home appliance business will remain a core growth engine, while the VF business will provide an additional growth pillar, helping LG Electronics India become a stronger company over the long term.

사업이 진행됨에 따라 이 분야에 대한 자세한 내용은 소화로 보내드리겠습니다. 감사합니다.

We will share more details as the business progresses. Thank you. Next question, please.

Thank you. We'll take the next question from the line of Umang Mehta from Kotex Securities. Please go ahead.

Hi, thank you for the opportunity. My first question is that your EBITDA margins have held up well, despite several headwinds. Can you explain the key drivers behind the same, and what gives you confidence that this margin trend can continue?

This question first will be translated into the Korean language.

Thank you.

Thank you for the question. While we don't provide specific margin guidance, we remain confident in the long-term profitability of the business. That confidence is based not only on the traditional drivers of localization and premiumization, but also on the quality of our earnings. Our premiumization strategy continues to strengthen on the back of rising demand for high-value, technology-led products, which is further improving our product mix.

또한 수익성 높은 채널리스트와 B2B의 수출 및 AMC 등 서비스 관련 사업의 기여학세를 통해 매출의 질도 꾸준히 개선되고 있습니다. 이러한 사업들은 다각화를 제공할 뿐만 아니라 일반적으로 회사 평균을 상위하는 마진을 창출합니다. 이들 사업이 포트폴리오에 차지한 비중이 커질수록 수익성과 이익의 안정성이 함께 강화됩니다.

The quality of our revenue is also improving steadily through a more profitable channel mix and the growing contribution from B2B exports and service-related businesses such as AMCs. These businesses diversify our revenue and generate margins that are generally above the company average. As their share of our portfolio grows, they will further strengthen both profitability and earnings stability.

중요한 점은 사사의 초점이 단순한 마진 확대가 아니라 구조적으로 더 강한 사업을 구축하는 데 있다는 것입니다. 규모의 이점, 더 높은 질의 매출 믹스, 운영 효율성, 그리고 지속적인 포트폴리오 자각화를 결합하여 사사는 장기적으로 건전한 수익성을 위한 지속가능한 기반을 만들어가고 있다고 믿습니다. 이를 통해 사업이 성장함에 따라 마진도 계속 강화될 것이라고 확신합니다.

Importantly, our focus is not simply on expanding margins, but on building a structurally stronger business. Through benefits of scale, a higher quality revenue mix, operational efficiencies, and continued portfolio diversification, we believe we are building a sustainable foundation for healthy, long-term profitability. This gives us confidence that margins will keep strengthening as the business grows. Thank you. Next question, please.

Thank you. The second question is that in your Shree City plant, when exactly is the production expected to start for different phases? And what kind of cost benefits are you expecting once the business is fully up and running?

Question will be translated into the Korean language first.

Thank you for this question. On timeline, I am pleased to confirm that we are well on track. Commercial production for compressor begins in quarter 3 of this financial year and air conditioner manufacturing follows in quarter 4 around January 2027. So by end of financial year 27, both lines will be fully operational. On cost benefits, we currently take some part of compressors from outside LG and that comes with supply chain risk as well as forex fluctuation headwinds. Once we start producing locally in our plant with an additional capacity of 2 million units, those costs reduce significantly and saving flows directly into our margins. It builds as volume ramp-up, so it is a permanent and growing benefit, which would be endearing to the organization. I would also add that ширicity is not just a cost story. It supports our export ambitions as well. As we scale our essential series range and premium products, having strong domestic manufacturing, give us a real edge on cost and supply reliability. Overall, this is one of the most important investments we have made, and we are very confident that it will improve our margins and competitiveness going forward. Thank you.

Thank you, sir.

Thank you. The next question is from the line of Vishal Goyal from HSBC Securities and Capital Markets India Private Limited. Please go ahead.

Thanks for getting the opportunity to ask questions. I have two questions. So my first question is that you have mentioned exports, premiumization, and now the new business area as growth drivers, within which you have announced this vehicle solution business as well. So now looking ahead, how do you envision the overall transformation of LG Electronics India as a company? That's my first question.

This question will be translated into the Coral language. This question will be addressed by our IRO.

Thank you. Thank you. In the future of the Indy LG and the future of the world, the first thing is that the change is very big. The plan is a clear plan, and the process has already been completed, and the process has already begun. The change is the same as the change is the same.

Thank you for the question. When I look at LG Electronics India today and where we expect the business to be, the first thing that comes to mind is the sheer scale of the change. We have a clear plan, investments have already been made, and execution is already underway. The transformation is taking shape across three key areas.

인도는 자사의 홈 마켓이지만 세계가 자사의 시장입니다. 자사는 수출 강좌로 가고 있습니다. 자사의 프리미엄 제품은 세계 최고의 시장으로 수출되고 있으며 에펜셜 시리즈는 아프리카와 동남아시아 등 고성장 경제권으로 확대되고 있습니다. 새로운 스피리스티 공장은 글로벌 경쟁에 필요한 생산 규모를 제공할 예정입니다. 4단은 강력한 생산 역량과 수출 플랫폼을 기반으로 인도 시장의 성장과 글로벌 시장 확대를 동시에 이끌 수 있는 유리한 위치에 있습니다.

First, export. India is our home market, but the world is our market. We are committed to becoming an export powerhouse. Our premium products are being exported to the world's leading markets, and the essential series is expanding into high-growth economies such as Africa and Southeast Asia. Our new 360 plants will give us the manufacturing scale needed to compete globally. LG Electronics India is uniquely positioned with a robust manufacturing and export platform that supports both domestic growth and global expansion.

인도의 가전 보급률은 여전히 상대적으로 낮으며 수백만 명의 소비자가 생애 첫 냉장고, 첫 세탁기, 첫 에어컨을 구매하고 있습니다. 자산은 이들을 위한 제품도 갖추고 있으며 이들이 시간이 지나 제품을 재구매할 때 함께 성장하는 브랜드가 LG가 될 것입니다. 생활수준을 높이고자 하는 인도 소비자들의 열망은 매우 긴 성장 여력을 가지고 있으며 자산은 그 양끈 모두에 자리 잡고 있습니다.

Second, premiumization remains at the core of our domestic strategy. We lead in every premium category we operate in, and we continue to gain market share. Appliance penetration in India is still relatively low, and millions of consumers are buying their first refrigerator, first washing machine, or first air conditioner. We have products for them as well, and as they upgrade over time, LG will be the brand that grows with them. Indian consumers' aspiration to raise their standard of living provides us with a very long growth runway, and we are well-positioned to capture opportunities at those ends.

셋째, 기존 내구제 사업을 넘어 자가는 LG 한국 본사의 글로벌 기술 포트폴리오 전체를 활용할 수 있다는 매우 큰 강점을 가지고 있습니다. VS 사업이 가장 좋은 일입니다. LG는 이미 차량용 인포테인먼트와 EV 부품 분야의 글로벌 리더이며 이제 이들을 새로운 사업 분야로 인도에 도입할 예정입니다. 글로벌 기술과 인도 시장 전문성의 결합은 매우 강력하며 자산은 이를 최대한 활용할 계획입니다. 이들은 시작에 불과하며 앞으로 더 많은 소식을 전해드리겠습니다.

Third, beyond our existing consumer durable business, we have a significant advantage in being able to draw on the global technology portfolio of LG's headquarters in Korea. Our VS business is a good example. LG is already a global leader in in-vehicle infotainments and EV components, and we now plan to bring these capabilities to India as a new line of business. The combination of global technology and deep India market expertise is very powerful, and we intend to make the most of it. This is only the beginning, and we look forward to sharing more with you.

FY30에는 인도 LG전자가 근본적으로 더 강한 기업이 되어 있을 것이며, 모든 투자자 여러분과 그 여정을 함께하기를 기대합니다. 감사합니다.

By FY30, LG Electronics India will be a fundamentally stronger company, and we look forward to sharing that journey with all of our investors. Thank you. Next question, please.

Thank you. We'll take the next question from the line of Achal Lohade from Novama. Please go ahead.

Yeah, thank you for the opportunity. So, two questions. First, you have announced price increases across AC, washing machines, refrigerator, and kitchen appliances. How much of this is being driven by input cost pressure versus a strategic decision to protect margins? And do you see any risk of demand moderation as these hikes flow through to the consumer?

This question will also be translated into the Korean language. This question will be addressed by our planning head, Mr. Gulpinderjeev Singh.

Thank you for this question. Let me explain how we think about pricing. In recent months, the cost of raw materials such as steel, aluminium, copper, and resin has increased. We have also faced some pressure from exchange rate movements. However, our first approach is not to pass these higher costs directly to consumers. We first try to reduce the impact. To better efficiency, higher localization, and negotiation with suppliers. When cost pressures continue for a long time and become significant, some price increases become necessary. This year, we have already taken two rounds of price increases. This was selective increase, not same across all products. While making these decisions, we carefully considered three factors, mainly, our land position, customer affordability, and profitability. Regarding demand, we have not seen any major slowdown after the price increase. In fact, our recent Q2 performance was strong with all our major products category delivering double daily growth driven by volume and value boost. Important point for us is that premiumization trend also supports demand. Many consumers are choosing higher end product and are willing to pay more because they see good value and benefit in our products. Going forward, we will continue to closely monitor raw material costs and market conditions. If further price adjustments are needed, we will take them carefully and responsibly without disrupting customer demand or affecting our competition positions. Thank you.

Aachal, your next question.

Yeah, my next question is with respect to the exports, what was LG Electronic India's export contribution in Q2? What levels do you expect to reach in Si-27, and how much of, how much impact is the geopolitical situation is having?

This question will be first translated into the Korean language. This question will be addressed by our export head, Mr. Cheongwon Byung.

Thank you. 현재 진입 국가는 50개에서 68개국으로 확대하였고 유통은 기존 112개에서 151개로 증가하였습니다. 특히 에센셜 시리즈는 제품 런칭 후 21개국에 빠르게 진입하고 있으며 향후 더 많은 국가로 확대 예정입니다.

Thank you for the question. Exports have been a very important part of our growth story this year, and we are quite pleased with the performance. We have expanded our presence from 50 to 68 countries, and our distribution network has grown from 112 to 151 partners. In particular, the Essential Series range has been entering new markets rapidly since its launch and is now available in 21 countries with plans to expand some more.

DASA School 전략은 두 개의 축으로 이루어져 있습니다. 첫째는 프리미엄파로 LG 브랜드 포지셔닝을 통해 더 높은 가치를 인정받을 수 있는 키 글로벌 마켓의 프리미엄 제품을 공급하고 있습니다. 둘째는 Essential 시리즈로 신뢰할 수 있는 품질은 물론 합리적인 가격의 제품을 원하는 소비자를 위해 특별히 설계되었습니다. 이러한 투트랙 접근 방식을 통해 폭넓은 시장과 소비자층을 공략할 수 있을 것으로 보입니다.

Our export strategy rests on two pillars. The first is premiumization. Leveraging LG's brand positioning, we are bringing premium products to key global markets where consumers recognize higher value. The second is the essential series range designed specifically for consumers who want reliable quality at a reasonable price. We believe this two-track approach allows us to address a broad range of markets and consumer segments.

Kidades학의 상황과 관련해서는 글로벌 환경에는 불확실성이 존재하며 자산도 그 영향에서 자유롭지 않습니다. 다만 수출국가 확대를 위한 국가 포트폴리오 강암으로 자산은 특정 국가나 지역에 과도하게 의존하고 있지 않습니다. 따라서 몇 년 국가나 시장이 어려움을 겪더라도 다른 시장이 이를 보완할 수 있도록 수출 전략을 수립하였습니다. Thank you.

As for the geopolitical environment, uncertainties remain, and we are not immune to their effects. However, by strengthening our country's portfolio through geographic expansion, we are not overly dependent on any single country or region. We have built our export strategy so that if a few countries or markets face difficulties, others can offset them. This year, we expect to deliver significant year-on-year growth. Thank you, and next question, please.

Thank you. Reza and gentlemen, in the interest of time, this will be the last question. We'll take one last question for today from the line of Deepak Agarwal from Access Capital. Please go ahead.

Thank you. So my question is on particular B2B category. Earlier, we've got it for a 20% kind of growth in this segment. So can you help us how one should look at B2B segment performing for us, particularly any sub-segment in that which is performing well? Any orders that we have gained from data center or any specific large order we witnessed during the quarter? Yeah, thank you so much.

This question will be translated into the Korean language first.

Teepak, I will take this question. Our B2B business has continued to grow well and our ambition of 20% plus growth over the long run remains intact. This business is something that we are investing in and we see it as one of the most important growth engines for LG India over the next several years. With B2B institution displays, it's our strongest performing segment right now, with commercial TV leading the way. We are seeing very good traction in the corporate offices, retail, hospitality, and public spaces. In system AC, it's the other segment that is growing well for us, specifically in large commercial projects. Also, government projects are becoming an increasingly important part of our B2B business. Whether it's public infrastructure, smart city initiatives, or government buildings, we are actively participating in these opportunities. Today, B2B is approximately 10 to 12% of our total revenue. And over the next three years, our goal is to meaningfully grow this share. And we believe 15% plus is a realistic and achievable target, given the pipeline of the opportunities we see across commercial, government, and infrastructure segments. You also asked about the data centers. So, on data centers specifically, this is a space we are actually watching very closely, and we have the product capability in terms of chillers and cooling solutions to participate with. Yet, it is too early to tell you more about this, and we see this as an interesting opportunity for sure for the future, and we will have more to share as we progress further. But definitely, this is a long-term story, you know, in B2B, straightforward, that India's infrastructure, commercial real estate, government spendings, and hospitality sectors are growing, and we see that LG is very well placed to serve this demand, the kind of portfolio, the commercial solutions we have. I hope to answer your question.

Thank you, sir, for answering those questions. As that was the last question, I will now hand the conference back to Mr. Aditya Bhassan for closing comments. Thank you and over to you.

Thank you, Tanay, and thank you, Michelle, and of course, thank you to all the participants who attended the LG Q2 FY27 earnings call. With this, we conclude today's discussion, and should you have any pending questions or require further clarification, please don't hesitate to call us directly. Thank you once again. Have a nice day. Happy Dantairas, and a very happy Diwali. Thank you.

Thank you, members of the management. Ladies and gentlemen, on behalf of AirG Electronics India and DAM Capital, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.