LG Electronics India Ltd (NSE: LGEINDIA) Q3 2026 Earnings Call dated Feb. 12, 2026
Corporate Participants:
Bhavani Kumawat — Axis Capital
Aditya Bhasin — Head of Investor Relations
Dongmyung Seo — Whole-Time Director & Chief Financial Officer
Soonjoo Seo — Investor Relations Officer
Atul Khanna — Chief Accounting Officer
Sanjay Chitkara — Co-Chief Sales and Marketing Officer
Analysts:
Umang Mehta — Analyst
Sonali Salgaonkar — Analyst
Sanjeev — Analyst
Praveen Sahay — Analyst
Natasha Jain — Analyst
Sujit Jain — Analyst
Aniruddha Joshi — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the LG Electronics India Q3 FY26 earnings conference call. As a reminder, all participant 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 this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Bhavani Kumawat from Access Capital. Thank you. And over to you sir. Yeah.
Bhavani Kumawat — Axis Capital
Thank you so much. On behalf of Access Capital, I would like to welcome all the participants to Q3FY26 earning conference call of LG Electronics India Limited. I would like to inform you that the call has been recorded and the audio call and transcript will be available on the company website. First of all, I would like to thank LG Electronics for giving us the opportunity to host a call and would now like to hand over the call to Mr. Aditya Basim, head Investor Relations. Thanks. And over to you sir.
Aditya Bhasin — Head of Investor Relations
Thank you. Bhavani A very good evening to everyone. I would like to welcome you to the Q3FY26 earnings call of LG Electronics India Limited. Hope you have gone through our earnings presentation uploaded on our website and stock exchange. I also want to remind you of the safe harbor we may be making some forward looking statements that have to be understood in the conjugation with the uncertainties and the risk that company faces. We have our senior management here today with us being represented by Mr. Dong Myungso, Chief Financial Officer, Mr. Sanjay Chitkara, Co Chief Sales and Marketing Officer, Mr.
Atul Khanna, Chief Accounting Officer, Mr. Gaganjit Singh, Chief Manufacturing Officer, Mr. Gurpinderjit Singh, Head Financial Planning and Mr. Sunju so Investor Relations Officer. Without further delay, I would like to invite our CFO Mr. Dong Myung Soo. To share his opening remarks and take. Us through the long term vision for LZ Electronics India. Thank you. And over to you sir.
Dongmyung Seo — Whole-Time Director & Chief Financial Officer
Namaste. Good evening everyone and thank you for joining us today. It is an honor to present our second earning report as a listed company. And today we are pleased to share LG Electronics India’s financial result for the third quarter of FY 2026. First of all, let me provide an overview of this year’s business environment. The Business landscape has been impacted by several external pressures including US tariffs, sharp currency fluctuations such as the deferment following the GST announcement, geopolitical uncertainties and and softening consumer demand driven by rising price. Despite these challenges, we continue to expand our market share and strengthen our leadership in premium product categories such as wired TVs, side by side refrigerators and Pipestar air conditioners.
The fourth quarter also began on a positive note is strong demand across categories particularly in home appliance. Supported by our successful transition to the new PE ratings. Backed by robust execution and solid fundamentals, we expect to exceed our performance from last year’s fourth quarter. Now let me highlight several achievements that further show our leadership, innovation and long term commitment to the Indian market. Firstly, we secured an incentive of 705 crore INR from the government of Maharashtra strengthening our manufacturing days and we are putting our long term investment in India. Secondly, we are among the positive branch to launch India’s first 2026 PE compliant air conditioner showcasing energy’s leadership in energy efficient technologies.
Thirdly, we received the National Energy Conservation Award from the President of India for Home Appliance of the Year for our washing machine and another testament to LG commitment to innovation and leadership. Finally, subject to external factors including market situation, we aim to double our export value by exporting premium products to manufacturers in India to the US and Europe supported by the India US Tariff Negotiation and the India EU FTA negotiations. With this foundation I now hand over to our IRO Sun Joo SE who will share the progress we are making towards our pure future vision.
Thank you.
Soonjoo Seo — Investor Relations Officer
Thank you Mr. Shipong. Let me now provide an update on the progress of our future vision as part of our make for India strategy. LG Electronics India is strengthening its product roadmap by combining global technology leadership with deep insight into the Indian customers. The best digital properties is our new essential city product range design, meaningful aspiring customers and focused time buyers and has been launched in under penetrated regional markets where it has received an excellent response. We remain committed to growing alongside Indian customers by offering high quality products at reasonable prices. Backed by LG’s trust technology aligned with our make in India strategy, we are accelerating manufacturing expansion into the construction of our third production plant in Sristi, Andhra Pradesh.
Construction is progressing smoothly and we plan to begin production of combined heating and cooling air conditioners in the first quarter of this year followed by compressed production in the next phase. Our two other plants continue to operate with a strong supply chain, efficient logistics and industry building operational excellence. As our manufacturing ecosystem strengthens, we are Accelerating localization to further reduce cost, shorten time to market and deliver great value to our Indian customers. In line with our Global south strategy. We are leveraging India’s lowest manufacturing capabilities to expand export of premium products. As here mentioned earlier, the Indian government proactive active measures, particularly the nationalization of the India US tariffs to 18% and the conclusion of the India EU Free Trade Agreement have significantly improved the export outlook. We see this as an important step toward realizing our vision of make India global. While subject is changing depending on external factors including market situation, we are optimistic about doubling our exporter of premium India manufactured products next fiscal year primarily driven by export to the US and Europe. This export will not only support sales growth but also enhance domestic premium production and improve margins, strengthening LG India’s position as a future global export hub.
Each factors highlight the resilience of LG India’s business model and the enduring strength of our brand. LG India is focused on building a strong foundation for the future. Beyond our core B2C products, we are actively exploring new growth opportunities including non hardware regular maintenance services like AEMC business as well as B2B business opportunities in information displays and commercial air conditioners. To support these initiatives, we have redesigned our organization to accelerate execution and strengthen our cruise capabilities. We established an exporter organization to scale export, improve coastal competitiveness and strengthen LG India’s global footprint particularly in the North America.
We also established a dedicated AMC organization to expand our ANC business, increasing profitability and deepening customer relationships. In addition, we have created the role of Chief Strategic Officer to build a high performance business portfolio, prepare for future opportunities and align company wide growth initiatives. Though these strategic actions, we are laying a more solid foundation for long term growth. At the core of this journey is our commitment to shareholder value creation, sustainable growth and profitability which will remain central to LG India’s future journey. I will now hand over to Mr. Abhir Khanna, our Chief Accounting Officer to walk you through financial performance. Thank you.
Atul Khanna — Chief Accounting Officer
Mr. SEO and good evening everyone. Let me now share an overview of LG India’s financial performance for the third quarter of fiscal year 26. The quarter began on a positive note with consumer durable industry witnessing encouraging demand momentum. The GST rate rationalization announced earlier in September continued to provide a strong tailwind, particularly in the television category. We saw healthy traction during the festival season, especially in the premium segment where large screen and OLED models gained strong consumer preference. The combination of improved sentiments, wedding season demand and attractive financing options helped driving growth across premium appliances.
This translated into resilient market share gains and reaffirmed both the strength of our brand and power of our robust distribution network. As we moved post the festive period, demand trend became subdued especially in the compressor based categories such as air conditioners and refrigerators. Cooler than expected weather conditions in the first half of the year coupled with cautious consumer sentiment weighed on volumes in these segments. Despite these challenges, we were able to increase our market share YTD basis even after taking price hikes in select categories to offset input cost increase and FX pressure. In quarter 3 FY26, LG India reported a revenue from operations of 41.14 billion INR compared to 43.96 billion INR in the same quarter last year EBITDA stood at INR 1.96 billion with a margin of 4.8% versus INR 3.4 billion and 7.7% in Q3 FY25 EBITDA margin declined due to combined effect of subdued sales impacting operating leverage, increased input cost, currency related headwinds and impact of new labor code.
Let me now touch on working capital as of 31st December 2025 our working capital stood at INR 11.3 billion as compared to INR 8.1 billion as on 31st December 2024. The increase was primarily due to incremental inventory in compressor LED products as we are planning for upcoming summer season with new BE ROMs and temporary support with extended additional payment days to our credit partners offering them greater flexibility and support. Our cash and bank balance as of 31st December 2025 remains healthy at INR 45.0 billion as disclosed earlier. In line with our long term growth strategy, we continue to reinvest in our business.
A key milestone is our upcoming expansion of our manufacturing capability with INR 5,000 crore investment in our Shiri City plant in Andhra Pradesh. This facility is paused to become a strategic asset for both domestic operations and export markets, enhancing production capacity, improving logistics efficiency and supporting our localization roadmap. The project is progressing in line with our internal targets and we expect to commence the first line of room air conditioner business operations in the last quarter of current calendar year. That means calendar year 26. Importantly, the capex will be funded entirely through internal approvals deployed in a phased manner over the next four to five years.
I would also like to highlight an important development. LG India has successfully entered into a nine year advanced pricing agreement with Central Board of direct taxes covering FY14 to FY23. Nine years. This agreement provides long term certainty on transfer pricing matters and eliminates contingent liabilities of nearly INR 4.87 billion related to direct taxes and royalty payments. While there is a modest one time tax outgrow, the settlement significantly de risk our tax profile enhances transparency and improves earnings visibility. This milestone further strengthens our financial foundation and reinforces confidence in our ability to deliver sustainable growth and shareholder value.
With that, I would now like to hand over to Mr. Aditya Basim, Head IR who will walk you through the segmental performance and share insights into our outlook for the coming quarters. Over to you Mr. Basim.
Aditya Bhasin — Head of Investor Relations
Thank you Atulji and good evening everyone. Let me now take you through our segmental business performance for the third quarter of fiscal year 2026 starting with our home appliance and air solutions segment. In the third quarter our home appliance and air solutions segment maintained clear leadership. Festive demand supported growth though post Diwali softness moderated momentum in the compressor led products. However, our premium launches including French door refrigerators and AI enabled washing machine 2.0 reinforced our leadership. Let me now share the glimpse of product wise market share for YTT December 25th. In washing machine category our market share stood at 33% maintaining our leadership in this category.
In refrigerator we stood at 30% an increase of 0.5% compared to YTD Dec 2024 which is reflecting the continued strength in our core appliance portfolio. In RAC category our share was 17.3% with an increase of 0.4% compared to YTD December 2024. In premium category our side by side refrigerator market share increased to 43.3% an increase of 2.9% highlighting our leadership in premium cooling segment. Talking about segment financial performance, revenue for the segment was INR 27.88 billion compared to INR 30.91 billion last year with EBIT margin of 4%. The margins decreased due to low revenue which impacted operating leverage, increased raw material prices including copper and aluminium and foreign exchange volatility Further added pressure on on margin.
Looking ahead at Q4FY26, new BE norms are boosting consumer interest in upgraded appliances supporting demand recovery across categories. Overall industry segment remains positive with consumer preference for premium energy efficient products and low penetration continues to provide opportunities in the volume zone. Margins continue to face pressure from elevated raw material cost and FX volatility though industry wide price adjustments are helping to partially mitigate these impacts. During this quarter we will be launching a new range of RSES and expand our bee rated refrigerator portfolio including a 2 ton 5 star air conditioner and a new range of French door models which will further strengthen our premium lineup.
In addition, we are entering the chest freezer category and introducing new essential products such as sub 1 ton which is 0.9 ton, inverter, air conditioners along with new range of 10 kg, top load washing machine and more variants of refrigerator. These initiatives reinforce our leadership in premium while broadening our presence in the value segments, positioning us for sustainable growth across the portfolio. A favorable summer season is expected to further support the growth momentum and continue maintain market leadership. Moving on to our home entertainment segment, the segment saw strong traction at the start of the quarter driven by festive and wedding season demand as well as the GST rate cut, particularly in the televisions.
Offline TV market share improved with OLED share rising to 62.4%, an increase of 2.7% points reinforcing our leadership in premium televisions. Demand softened post festival moderating overall momentum, but B2B growth in information displays continued to contribute positively. The segment revenue from operations stood at INR 13.26 billion, up by 1.7% year on year from INR 13.05 billion in Q3FY25 margins however were impacted by the post festive demand slowdown and input cost pressures through the premium TVs and B2B opportunities provided resilience. Looking to Q4 the market continues to see traction in premium televisions supported by rising consumer preference for large screen formats.
B2B growth in information display is being driven by increased government infrastructure spending in education and steady investments from the multinational company sector. LG’s premium portfolio resilience and operational efficiency are positioning the company to deliver sustained growth and profitability. The B2B business led by information displays is strengthening further by capitalizing on India’s expanding infrastructure sectors particularly in education and corporate investments. Now to summarize, Q3 results were below internal targets but this is a temporary phase. Our long term fundamentals remains unchanged despite demand challenges. We implemented price increase in key home appliance categories, protecting profitability while expanding year to date.
Market share Q4 on the other side has begun on a very strong note with broad based selling growth across product line led by category recovery in home appliance segment, our fundamentals remain unchanged with strong brand equity, disciplined execution and a clear focus on long term shareholder value. Strategically, we are expanding product leadership across premium and and value segments through LG Essential, strengthening manufacturing capabilities through our upcoming SRI City facility and driving innovation and localization to ensure our offerings are tailored to Indian households while remaining competitive. With that, we conclude our remarks. We now request operator to open the lines for the Q and A session.
We look forward to addressing your questions.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Please note that the management will use English Korean translation for better communication. Hence there would be a slight delay in the responses and the management line will be on mute mode until then. Anyone who wishes to ask a question may press STAR and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Our first question comes from the line of Umang Mehta from Kotak Securities. Please go ahead.
Umang Mehta
Hi. Thanks for the opportunity. My first question is on inflation. So based on spot RM prices and the impact of new energy efficiency norms, what would be the price hikes required across categories and how much is already passed through?
Aditya Bhasin
This question will be addressed by our core CSMO, Mr. Sanjay Chikkara.
Sanjay Chitkara
So we acknowledged that there was a price increase in input cost, particularly metal like copper and aluminum. But we are a global company and we have a very massive and large scale of global procurement and we have a very long term raw material contract with our vendors and a very better backward integration so we can secure a best price of raw material and managing and mitigate the volatility. But new B norms are coming and with this we are improving the efficiency of our product by 11%. So with this we have to increase and we are increasing the price so there will be almost 7 to 8% on 3 star ACs we are increasing and 9 to 10% on 5 star ACs we are increasing for new B star rated products.
And as the said, like we have seen a recent GST cut has been done and that will largely offset this impact and making it effectively no burden on our customer. And almost they will get the ACS at the last year price only. As a market leader we generally take the price hikes only when it is very much required and ensuring that our price positioning remain competitive. And also we need to protect our margins. So how other companies companies are responding, we will not like to comment on that. But we are very confident that our procurement strength, our product mix, our leadership position allow us to manage these cost information effectively and and managing our growth also.
Thank you very much.
Umang Mehta
Thank you. And the second question I had was on your export. So what is the level of confidence on doubling exports next year? Apart from tariffs, are there any other risks to this guidance? Thank you.
Aditya Bhasin
This question will be addressed by Mr. Kanna who is our CEO.
Atul Khanna
Thank you for the reasonable question. LG India currently exports around 6 to 7% of total revenue to 54 neighboring countries such as Nepal, Bangladesh, Middle east and Southeast Asia. With our strong manufacturing capabilities and operational excellence, India has emerged as a global production hub for LG groups under the Global South Initiative, expanding the business in fast growing and emerging markets. India now stands at center of headquarters export strategy. PLG India 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 are very much confident on export business going forward from fiscal year 27 and onwards as US tariff rationalization and EU FTA signed giving us additional opportunity to add on to our export business. Subject to external factors, we are aiming to doubling our exports from the next financial year fiscal year 27. We had developed our production capability of manufacturing premium products like side by side refrigerator, large capacity top freezer which is 650 liters plus refrigerator in our Pune manufacturing plant already. And this premium product have already passed the quality standard, usage pattern and design specs of US market which gives benefit to add up the new geographies like US and other developed economies in overall, apart from this tariff structure risk, we remain confident to expand our exports.
These exports will not only drive revenue growth but also elevate premium production in India and improve margins, calmly positioning LG India as a future globe exporter. Thank you.
Umang Mehta
Got it. Thank you so much, sir.
operator
Thank you. The next question comes from the line of Sonali Salgaonkar from Jefferies Group. Please go ahead.
Sonali Salgaonkar
So, thank you for the opportunity and you know, thanks team for the very good presentation at the outset. It’s good to hear that the market shares in key categories have been retained and also grown to a certain extent. So my first question is regarding the strategy of the company over the next two to three years. If you could let us know which are the key growth catalysts that you would require and where do you envisage them over the next two to three years.
Aditya Bhasin
So this question will be addressed by our cfo, Mr. Dong nam.
Dongmyung Seo
[Foreign Speech] LG India continues to show resilience and strength even in a challenging environment. Our fundamentals remain solid and we have steadily expanded our market share Going forward, growth will be driven by a stronger premium B2C portfolio while we also broaden our presence in the MASH segment. Through the new LG Essentials series, particularly targeting Tier 2 and Tier 3 markets and first time buyers. We are also entering new product categories such as chest freezers to reach a wider consumer base. On the B2B fund, momentum will come from H Vac and information display solutions supported by high margin non hardware recurring revenue streams such as amc.
Business exports from our third factory will further extend our market reach. And following the rationalization of U.S. tax tariffs, we are actively evaluating new opportunities. Localization has already increased from 45.1% in FY22 to 54.6% in Q3 FY26 and will continue to rise under the make in India initiative. Collectively, these initiatives will position LGE India to achieve sustainable and profitable growth over the next two years, next three years. Thank you.
Sonali Salgaonkar
Thank you sir. So my second question is regarding the price hikes again. Now you did mention Mr. Kuttara did mention the 7 to 10% price hike in a 3 to 5 star aircon since January. But what about the other product categories? Can you also help us with the quantum of the price hikes in the other key categories? And also when did you take them? Thank you.
Aditya Bhasin
This question will be addressed by our core CSMO, Mr. Sandesh Jitkar.
Sanjay Chitkara
So I mentioned about the air conditioners but other products we are also increase the prices for washing machine and refrigerator. It is in the tune of 2 to 3%. And that price increase was taken in the month of November. And we are very vigilant for the situation and whenever. So on the one hand we want our product to be very competitive. But on the other hand our margins are also our priority. So whenever the any call is to be taken on price, we are taking it.
Sonali Salgaonkar
Got it sir. Thank you very much. And all the best to the team.
operator
Thank you. The next question comes from the line of Sanjeev from Motilal Oswal Financial Services. Please go ahead.
Sanjeev
Thank you for the opportunity. Sir, my first question is on margins. So can you elaborate on specific cost items which has led to margin comprehended this quarter? Because if we look at gross margin that seems to be largely stable year on year. Also what level of margin should be considered on a sustainable basis going forward?
Aditya Bhasin
So this question will be addressed by our CEO Mr. Atul Khanna.
Atul Khanna
Yeah, thank you for the very reasonable question. Pressure on margins was one of the temporary phase in this quarter. And there is no issue as far as company fundamentals are concerned. This quarter three is traditionally the smallest quarter in our sales cycle which is around 16 to 17% of our total revenue. And the revenue softness during this period had a direct impact on operating leverage relatively in the compressor based products where fixed cost absorption is structurally impacted the margins. There is another onetime impact related to new wage code. The government regulation change thirdly on the compliance cost which is related to electronic waste added some burden on the margins along with RMC cost and FX fluctuation also impacted the margins.
We had initiated a strong Draper annual maintenance contract business which is a new revenue stream where we had gained a strong growth though the top line impact will come only when after the expiry of the product standard warranty which is a normally one year where the AMC incentive which we have to pass on to the partners and promoters we had done that accounting as their obligation of sales completed. This is just a temporary timing gap with respect to AMC incentive cost with respect to pat. I need to highlight here that we had signed an advanced pricing agreement with CBDT where one time tax outgo impacted our PAT but our contingent liability of 488 crores comes to zero in relation to transfer pricing litigations and royalty payments to the parent company and that is for a period of nine years 2014 to 2023.
Our margin sustainability is driven by our strategic initiatives going forward as we have built on our localization rate to 54.6% in this quarter to reduce the import dependency and managing the cost inflation channel mix and premiumization across all key product categories. Expansion of our non hardware AMC services to create a recurring high margin revenue stream. Focus on our B2B business where recovery in government orders has already begun in quarter three and orders are expected to contribute in quarter four from the multinational Omni orders giving us opportunity in education and infrastructure expansion with respect to exports with U.S.
tariff rationalization. This will help accelerate our commitment to make India global as we optimize production to serve both domestic needs and expand exports. We are assessing with our headquarters for the feasible allocation for FY27 and we are estimating almost doubling our exports in financial year 27. Despite these headwinds we are remain fundamentally strong. Our quarter four is historically largest quarter and we are confident to deliver double digit revenue growth and EBITDA margin better than last year. Quarter four in mid teen digits that is for quarter four. Our overall outlook for FY26 is also again to deliver early single digit revenue growth with EBITDA margin in double digit.
As you ask for the Future Outlook for FY27 our guidance is very clear with all our good initiatives, our guidance is to deliver double digit revenue growth and sustain early 10 digit margins in line with our FY25 margin levels supported by premium product launches, diversified portfolio, strong brand equity. We are confident to reinforcing LG India’s leadership and delivering sustainable value creation. Thank you.
Sanjeev
Thank you for the detailed answer sir. Second question is on depreciation there seems to be an increase on a sequential basis. So what is the reason for that? Because I think most of the CAPEX will be seen in FY27.
Aditya Bhasin
This question will also be addressed by Mr. Atul.
Atul Khanna
So depreciation. We all know that is an impact towards the capitalization for building the manufacturing capabilities, increasing our localization on sub assemblies and bringing in new technology innovative products. During the year 259 months period April to December the total investment amount was 420 crores. With respect to when we compare it to last year it is 220 crores. So the investment was being done to bring on our manufacturing capabilities localization. For that reason the depreciation impact increases during this quarter with respect to last quarter Number one. Number two we get central government incentives also for the CAPEX investment under MSIPS modified special incentive package schemes on regular basis which is also being accounted for to neutralize the impact of depreciation as it is being given for the CAPEX investment only considering the life of an asset.
During this quarter we did not realize such high incentive of msips due to various factors including government budgetary issues. Though from quarter four we would start receiving this on regular basis as our projects are under pipeline and already applied to the MIT history of electronics and IT to get the incentive refunds. Thank you.
Sanjeev
Can you give the quantum of the incentive which you receive every quarter? Thank you so much.
Atul Khanna
Amount particularly is based on the CAPEX investment for each product of phase as we do normally phase wise investment like for refrigerator, air conditioner, washing machine, TV in our both the plant existing plants. So we received the incentive in the last year quarter 325 a very huge amount as the projects were little larger. Where the larger projects we have already applied for the incentive refunds which we will receive in quarter four as well as going forward in quarter one of FY27. Thank you.
Sanjeev
Thank you so much sir.
operator
The next question comes from the line of Praveen Sahai from Prabhu Das Leeladhar Capital. Please go ahead.
Praveen Sahay
Thank you for opportunity. My first question is related to the incentive as you had highlighted that approximately around crore you are going to receive from the Maharashtra government. So can you give some specific timeline for the disbursement of that amount and also LG India expect to receive any portion in this financial year FY26 and how these incentives will be treated in our financial statements.
Aditya Bhasin
So this question has two parts. The first one will be addressed by our CFO Mr. Domyanso and the second one will be addressed by Mr. Atul Khanna.
Dongmyung Seo
[Foreign Speech] Thank you for the question. On January 16th, 2025 the Government of Maharashtra issued an eligibility certificate to LGE in York New under the electronics policy 2016 for our mega expansion project. This approval recognizes investments of 705.7 crore rupees made between November 1st, 2017 and October 30th, 2024 qualifying us for incentives of the same amount in the form of SGST refunds, electricity duty and stamp duty exemptions, refunds of employees, EPS contributions, power tariff subsidies and property tax exemption. The incentive entitlement is valid for 15 years starting from 05-01-2025 to 04-30-2040 with an annual disbursement cap of 47.04 crore rupees.
While the benefit will accrue over the 15 year period, we expect to begin realizing a portion of these incentives in the current year. In our financial statements these incentives will be recognized as income linked to the underlying expense categories thereby strengthening our profitability profile and enhancing cash flows while also underscoring the government’s confidence in LGE India’s long term growth and contribution to the state’s industrial ecosystem. Thank you.
Atul Khanna
With respect to your second question regarding how much would be booked in the current financial year FY26. You see this entitlement is for 15 years with an overall cap of 47.04 crores. It starts from particularly May 25 to April 2014. So we would be accounting for almost 43 crore rupees in this fiscal year 26 as it is a period from May 25 to 31 March 2026. We will account for here 43 crores in this financial year. Thank you.
Praveen Sahay
Right. Thank you for this Second question is related to the recycling cost related to the compliance Last quarter also we had seen some cost has rises out of that this quarter as well. Is this cost is recurring in the nature the way forward also we continue to see and how much is the quantum of that.
Aditya Bhasin
This question will also be addressed by Mr. Atul Khanna.
Atul Khanna
So thank you for the question. The recycling cost. If you recall that I have explained in the last meeting also that the targets every two years it got changed as per the government Norms till fiscal year 25 the target for recycling was 60%. And now for fiscal year 26 and fiscal year 27 it should be 70%. And going forward for fiscal year 28 onwards the target would be 80%. So for fiscal year 26 the target is 70%. So increase in the 10% target has given a burden of incremental electronic recycling cost. That is the reason.
Praveen Sahay
Okay, okay. Any quantum can you give?
Atul Khanna
If we talk about quantum wise this would be almost, I will say 0.15% of our total revenue. In principle, the incremental portion with respect to fiscal year 25 though that this quarter quarter three was soft in demand revenue. So that is the reason why it has impacted by 0.3%.
Praveen Sahay
Right? Thank you sir and all the best.
operator
Thank you. The next question comes from the line of Natasha from Philip Capital. Please go ahead.
Natasha Jain
Thank you for the opportunity. My first question is on the TV product category. Now on the margin decline it has been very sharp both Y and sequentially. And assuming sequentially there was a GST rate cut and the benefit must have flown in. So is the margin of because of the global headwinds like your chip sizes, panel prices and then you import a lot of your BOM costs for currency depreciation there. And if it is so these problems continue to persist and then we have a softer quarter that is quarter four and quarter one in terms of PV because this is a high margin segment for you, would that mean that at least in the first half of this calendar your home entertainment business could continue to see more pressure in terms of margins?
Aditya Bhasin
So this question will be addressed by our co CSMO, Mr. Sandra Chitkara.
Sanjay Chitkara
So yes, thanks for this question. Yes, there was some pressure on input cost you rightly mentioned. But for LG India this impact was mitigated by our strong brand power. Because we command a strong brand power, we could able to take some premium over other competition and a heavy premium heavy model mix. And we are focusing more on larger screen to mitigate this pressure. In fact, industry Data shows that 43 inch and above TV now account for 2/3 of sales in India which is clearly reflecting that customer shifts towards the premium product. And when it comes to the premium products, LG becomes their natural choice.
So the demand dynamics support stable and even better margin despite of cost inflammation. Let me tell you that HG India continues to strengthen our profitability through cost efficient local manufacturing premium TVs. By focusing on local manufacturing and procurement, the company reduces the import duties, logistics expenses and currency risk. Currently the local panel sourcing contributes roughly 29% for us while overall local TV module procurement has already exceeded 55%. The key components for TV like USD 4355 module are already sourced locally and we have a plan to expand this. To the 32 inch full HD TV. Also module for the next year. So this strategy is not only enhancing. Our profitability but also strengthens our product portfolio and improving our market shares and increasing the overall business towards the premium demand. So we are very watchful and in. We will incorporate price increases whenever it is needed for our new prm.
Natasha Jain
Got it. So can you just once again tell me consolidated import in terms of BOM cost 14 percentage wise.
Sanjay Chitkara
So see we understand your interest on this information but it’s a bit competition sensitive information and we think that it is not a right place to disclose this.
Natasha Jain
Understood? No problem. Sir my second question is on more again near term in terms of rac. So you’ve mentioned that the secondaries have picked up while it definitely has Just wanted to understand will that sugar primaries sales to. Because I believe the channel is choker blocked with inventory. So would that lead to any strong primary growth in the near term say fourth quarter.
Aditya Bhasin
So this question will be addressed by Mr. Sanjay Karasar again.
Sanjay Chitkara
So. See we have already seen this AC season is very cyclic and we have seen a softer summer last year. And we are very hopeful that this year will be a very hot summer. And we have already seen the reflection of this January sale has shown a better result as compared to last financial year same period. But we have to also see that. Our core demand drivers for AC business is low penetration in India premiumization and shift towards the energy efficient acs. We have recently introduced many missing segments in our AC business. Like we were not there in present in 5 star 210 acs we have given this AC to the market. We were also not there in sub 110 capacity. Under our essential series we have also provided that AC in the market. The total industry 12% portion is covered by Fixed Speed ACS. There also LGB India was not present. And this year we have also entered in this market with more energy efficient acs with three star.
Let me also tell you it’s a matter of great pride that during last financial year LG was number two player in AC business. This year we have gained absolute leadership in AC business and we are the number one player in AC business. We believe that this year the inventory have been already normalized. New star rating ACs have come. We were the first one to introduce this AC overall channel, motivation and confidence is very high. And we are. We will see a very good summer season this year.
Natasha Jain
Understood sir. That’s extremely helpful. Thank you and all the very best.
operator
Thank you. Participants, please restrict yourselves to one question. In the interest of time for any more questions please rejoin the queue. Our next question comes from the line of Praveen Yolekar from Bajaj Life Insurance. Please go ahead.
Sujit Jain
Hello. Am I audible?
Aditya Bhasin
Yes. Please go ahead.
Sujit Jain
Yeah. Thank you for the opportunity. Vishal Sudhir Gain. So just to get this right, export your saying could double in FY27 itself in absolute terms. Which is where $160 million could practically double in next year. Is that correct?
Aditya Bhasin
This question will be addressed by our CEO, Mr. Atul Kannaji.
Atul Khanna
Yes. I explained earlier in another question that yes, we are having a plan to expand our exports and doubling our exports from $160 million which was in FY25 and FY26 also remains in the same range. But FY27 we would be doubling our export sales. Considering that external factors as now the US tariff rationalization has happened. EU particularly FT has been signed giving us an opportunity to add on to our export business. And these export will not only drive our revenue growth but also elevate premium production in India and improve our margins. We have a product of side by side refrigerator large capacity refrigerator which is 650L plus capacity.
Already we had a production capability and capacity in our Pune plant though when we start our third manufacturing facility in Shiri city, Andhra Pradesh. From there we are also building more premium products lineup and internal preparations are underway so that we can increase our exports. Thank you.
operator
Thank you. The next question comes from the line of Anirudh Aniruda Joshi from ICICI Securities. Please go ahead.
Aniruddha Joshi
Yeah, thanks. Sir, just two questions. Memory prices have gone up materially so especially for the TV business and even the display business. How do you see the inflationary pressures? That is question one and second question if you can share more details on LG essentials. What has been the initial market share gain? If you can call out any. And whether the product distribution has been across India. I mean GT MT E. Com largely done or what can be the upside in FY27 and 28? Yeah, thanks.
Aditya Bhasin
Thank you. Anirudh. This question will be addressed by CO CSMO Mr. Sanjay Chitkaraji.
Sanjay Chitkara
So in the interest of time I would like to remind with similar two questions we have just answered. So that component price increase pressure. So I will move to your second. Part of your question. Which is regarding volume zone Essential series. So let me first give you the. Context that India is a very large and diverse market with multiple customer segments. So while LG was always a very strong premium brand. But our intent is to extend that. Premium experience to a wider audience. So through our value engineering and smart design we are making products more affordable without compromising our core technology, energy efficiency and the reliability. So this LG Essential series is not about chasing volume. Definitely it will change the volume also. And it will help us improve our market share. But it is a. It is all about bringing new customers. To overall LG ecosystem while maintaining our brand trust. So we’ll continue to focus on our premium product. Our premiumization energy efficient innovation service, AMC business, B2B solution business and Essential series will help us to participate in entry segments in a very disciplined way. So it is a very balanced strategy. Talking about market share which you just mentioned. So we have improved our market share this year. Our market share improvement during this financial year, this calendar year for refrigerator it is 0.5%. Room AC 0.4%. And TV category it is 0.7%. Let me also tell you that our brand strength during this period is very high.
Our washing machine, the gap with the number two player is the highest during this period. For washing machine we have created a gap of 15.8%. With number two player, refrigerator 5.9% and TV 5%. Also we are doing extremely well. For our Premium segment OLED TV our market share is 62.4% which has improved 2.6 point over last year. Similarly for side by side, our current share is 43. For this yearly base, our market share is 43.3% which. Which is also reflecting an improvement of 2.9%. Thank you very much.
operator
Thank you. Ladies and gentlemen, we would take that as the last question for today. I would now like to hand the conference over to Mr. Aditya Basin for the closing remarks.
Aditya Bhasin
Thank you ladies and gentlemen. That was the last question for today. And with this we conclude today’s conference call. However, if there are any further queries or clarifications please feel free to reach out to me. And on behalf of LG Electronics India Limited we thank you for joining us. And you may now disconnect your lines. Thank you.