Mar26-Q: In-line PAT; Industry-Leading Margin

Research evidence excerpt

Mar26-Q: In-line PAT; Industry-Leading Margin

e

energy project in India.

How is Appliances Market Faring in Q1FY27 so far? Post rainfall disruption in mid-April, LGEL

has cited that industry is staging a strong recovery, as heatwave conditions are driving traction

in compressor-based products across categories. Industry-wide price hikes are underway in

order to offset a surge in input costs. This can aid gradual margin normalization in the sector.

Company targets to export its 'Essential Series' range to 22 countries in FY27e.

Segmental Details; Home Appliances the Key Driver: Home Appliances & Air Solutions

division is ~75% of sales mix and includes Air Con segment. This division posted sales at

Rs65.2bn (+6%YoY), staging a good performance in premium categories. But, the segmental

EBIT Margin declined by -250bps to 11.9%.

Home Entertainment division revenue stood at Rs15.4bn (+20%YoY) supported by increased

demand for large screen TVs and healthy order inflow for Information Display products.

However, its EBIT margin dipped by -280bps to 13.4% on account of INR depreciation and

increased marketing spends during the Cricket World Cup.

B2B: This segment is rather small at <10% of sales. Information Display business saw good

growth in Mar26-Q. Within the HVAC segment, LGEL is expanding its portfolio in Variable

Refrigerant Flow (VRF) and Cassette AC segments.

JEF Present Outlook: We est revival in FY27e led by normal summer on a weak base of LY.

Capex forecast at Rs11-12bn p.a over FY27-28e. RoCE / RoE is expected to remain strong

over FY27-28e. In early Apr26, we rationalized earnings across our coverage universe factoring

in disruption from Middle East conflict and factoring margin headwinds. Report Link here:

Diversified: Navigating (Dire) Strait of Hormuz