LG Electronics India is closely monitoring global commodity prices and foreign exchange movements before deciding whether to increase prices of its home appliances further. The company has already implemented price increases across multiple product categories, raising air-conditioner prices by 5% from October 1 and prices of other home appliances by 3–5% from November 1, 2026. However, senior executives believe the worst of the recent cost pressures may be behind the company.
Rather than immediately passing additional expenses on to consumers, LG India plans to prioritise localisation, sourcing efficiencies and operational improvements to protect profitability. The strategy comes as manufacturers continue dealing with elevated prices of copper, aluminium, steel and resin, alongside rupee depreciation. Despite these challenges, LG India delivered a strong September-quarter performance, with net profit increasing 25.7% year over year to ₹489 crore and revenue from operations rising 19.5% to ₹7,380 crore.
LG India Monitoring Commodity Prices Before Further Price Increases
LG Electronics India is not ruling out additional price increases, but the company wants to assess commodity and currency movements before making another decision.
Sanjay Chitkara, an LG Electronics India executive, told Moneycontrol that the company was closely monitoring raw-material prices, foreign exchange movements, consumer affordability and competitive pricing.
The latest price revisions have only recently taken effect, making it too early for the company to determine whether another increase will be necessary.
LG has already implemented two rounds of price revisions:
- Air conditioners: Prices increased by 5% from October 1, 2026.
- Other home appliances: Prices increased by 3–5% from November 1, 2026.
The latest increase excludes air conditioners, which had already received a separate price revision in October.
The company said any future increase would be carefully calibrated, with pricing decisions taking into account market conditions and the impact on consumers.
This approach reflects a broader challenge for consumer-electronics manufacturers. Higher prices can help protect margins, but excessive increases may discourage purchases, particularly in price-sensitive segments of India’s appliance market.
Rising Copper, Aluminium and Steel Prices Pressure Manufacturers
The consumer-durables industry has faced higher input costs due to rising commodity prices, currency fluctuations and supply-chain expenses.
LG India identified steel, copper, aluminium and resin as important materials affecting its manufacturing costs.
These commodities are widely used in appliances:
- Copper: Used in motors, compressors, wiring and refrigeration systems.
- Aluminium: Used in heat exchangers, structural components and cooling systems.
- Steel: Used in refrigerator cabinets, washing machines and other appliance structures.
- Resin: Used in plastic components, insulation and appliance housings.
A weaker rupee can increase the domestic cost of imported materials and components, adding another layer of pressure for manufacturers with international sourcing requirements.
These cost increases can affect operating margins if companies cannot pass them on to customers immediately.
For LG India, managing the combined impact of commodity inflation and currency movements has become an important part of its pricing and procurement strategy.
Localisation to Reach 65% Over the Next Two to Three Years
One of LG India’s biggest strategies for controlling costs is increasing localisation.
The company’s localisation rate reached 58.5% in the September quarter of FY27, compared with 54% in the corresponding quarter last year. This represents an improvement of 4.5 percentage points, or 450 basis points.
LG is targeting a localisation rate of 65% over the next two to three years.
The company expects localisation to increase by approximately 2–3 percentage points annually.
| Localisation indicator | Percentage |
|---|---|
| September quarter FY26 | 54% |
| September quarter FY27 | 58.5% |
| Target over the next 2–3 years | 65% |
Greater localisation can reduce dependence on imported components, limit exposure to foreign exchange fluctuations and improve supply-chain flexibility.
It can also help manufacturers build stronger relationships with domestic suppliers and improve control over production schedules.
However, localisation does not eliminate commodity-price risk entirely. Domestic manufacturers may still face higher costs when global prices of copper, steel, aluminium and petrochemical-based materials increase.
Hedging and Long-Term Procurement to Control Cost Volatility
LG India is also using financial and procurement strategies to manage fluctuations in raw-material prices.
Atul Khanna, the company’s chief accounting officer, said LG uses hedging mechanisms, long-term procurement arrangements and partnerships with vendors to reduce the impact of day-to-day price movements.
These arrangements help the company manage uncertainty in input costs and avoid depending entirely on spot-market purchases.
Long-term vendor relationships can also improve supply reliability and provide greater visibility into procurement requirements.
Hedging, meanwhile, can help companies manage exposure to currency and commodity fluctuations, although the effectiveness depends on the structure and timing of the arrangements.
LG’s management believes these mechanisms have helped keep cost pressures under control.
The company also wants to improve productivity and operational efficiency rather than relying exclusively on higher selling prices to protect margins.
LG India Q2 FY27 Results: Profit Rises 25.7%
The company’s cost-management strategy comes alongside strong financial growth in the September quarter.
LG Electronics India reported a net profit of ₹489.34 crore in Q2 FY27, compared with ₹389.43 crore in the corresponding quarter last year.
Revenue from operations increased 19.53% to ₹7,380.04 crore from ₹6,174.03 crore.
The company also reported higher operating earnings, supported by improved margins and business growth.
| Financial metric | Q2 FY27 | Q2 FY26 | YoY growth |
|---|---|---|---|
| Revenue from operations | ₹7,380.04 crore | ₹6,174.03 crore | +19.53% |
| Net profit | ₹489.34 crore | ₹389.43 crore | +25.65% |
| EBITDA | ₹701 crore | — | +28% |
| EBITDA margin | 9.5% | 8.87% | +63 basis points |
The EBITDA margin expanded by 63 basis points to 9.5%, indicating that the company improved operating profitability despite elevated input costs.
LG India said the September-quarter performance reflected a combination of higher volumes, premiumisation and operational efficiencies.
The company also reaffirmed its FY27 targets of mid-teen revenue growth and an early double-digit EBITDA margin.
Premium Appliances and Consumer Demand Support Growth
LG India said consumer demand remained encouraging, with buyers increasingly opting for appliances offering advanced features and greater convenience.
Some of the product characteristics attracting consumers include:
- Larger television screens.
- Higher-capacity refrigerators and washing machines.
- Automated appliance functions.
- Wi-Fi connectivity and smart controls.
- Improved energy efficiency.
Premiumisation is an important growth opportunity for appliance manufacturers because higher-value products can improve average selling prices and product mix.
However, the company’s growth is not limited to premium products. Demand across different price categories remains important in a market where consumers have varying purchasing power.
India’s consumer-durables industry is also benefiting from increasing disposable incomes, wider product penetration and demand from emerging urban markets.
LG’s ability to balance premium products with affordable offerings will influence how effectively it maintains sales growth while implementing price increases.
Why Further Price Hikes Could Affect India’s Appliance Market
Although manufacturers can use price increases to offset higher production costs, consumers may respond differently depending on the product category and their purchasing power.
Air conditioners, refrigerators, washing machines and televisions are discretionary purchases for many households. Higher prices can encourage customers to delay replacement decisions or choose less expensive models.
This creates a difficult balancing act for appliance companies.
If manufacturers absorb too much of the cost inflation, profitability can weaken. If they pass on too much of the increase, demand could slow.
LG’s decision to prioritise localisation and operational improvements before announcing additional price revisions reflects this challenge.
The company’s next pricing decisions will depend on whether commodity costs stabilise, the rupee becomes less volatile and consumer demand remains strong.
The Bigger Picture
LG India’s latest strategy highlights a broader shift in India’s consumer-electronics industry. Manufacturers are increasingly looking beyond price increases to protect profitability, focusing instead on domestic sourcing, supply-chain improvements, hedging and operational efficiency.
The company’s localisation rate of 58.5%, with a target of 65%, demonstrates the importance of building stronger domestic manufacturing capabilities. At the same time, its strong Q2 earnings suggest that demand for consumer appliances remains resilient despite higher input costs.
The challenge will be maintaining that momentum without making products significantly more expensive for consumers.
Looking Ahead
LG India will continue monitoring commodity prices, foreign exchange movements and consumer demand before deciding on any additional price revisions. Its immediate priority is to absorb cost pressures through localisation, procurement efficiencies and productivity improvements. The company’s ability to reach its 65% localisation target could become an important factor in protecting margins over the next few years.
For consumers, the latest price increases have already raised the cost of several home appliances, and further revisions remain possible if input costs rise again. However, LG’s management believes the worst of the current cost pressures may be behind the company. Its upcoming quarterly performance will show whether stronger localisation and operational efficiency can sustain profit growth without repeated price increases.
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