LG Electronics' Indian unit logs highest first-half sales

LG Electronics Inc., the world’s largest home appliances maker, raked in more than 2 trillion won ($1.5 billion) in first-half sales in India for the first time since it landed in the South Asian country three decades ago.

For all of 2024, it looks on course to notch record-high revenue from its Indian operations, which would offer fresh momentum to the plan to list its Indian unit on the Iocal stock market to raise an estimated $500 million.

Revenue at LG Electronics India came in at 2.1 trillion won ($1.5 billion) in the first six months of this year, up 15% from the year prior, according to its half-year financial reports published last week.

The Indian arm’s net profit of 198.2 billion won also marked its highest ever for a six-month period, compared with the previous year's 155.3 billion won.

In the second quarter ended in June, LG Electronics as a whole posted its highest quarterly operating profit of 1.2 trillion won, with record-high sales of 21.7 trillion won.

LG Electronics' Indian unit (Unit: billion won)
	Sales	Net profit
2021	2,625.5	198.0
2022	3,187.9	212.0
2023	3,300.8	231.0
2024 (first-half)	2,086.9	198.0
(Source: Financial disclosures)

LG has built its position as a premium household appliances brand in the world’s most populous country with a localization strategy.

Since establishing an independent unit there in 1997, LG has opened R&D, production and sales units dedicated to India. It offers delivery, installation, maintenance and repair services tailored to the local market.

White goods such as TVs and air conditioners still make up a big chunk of its sales in India. But LG is leaning toward business-to-business services such as interactive whiteboards and heating ventilation and air conditioning (HVAC) equipment are becoming its new growth drivers. 

It operates business innovation centers (BICs) in Noida, Mumbai, Bengaluru and Chennai to promote B2B products such as HVAC, where it runs showrooms and offers face-to-face customer services.

To grow India as a global manufacturing hub, LG poured 30 billion won into expanding production lines in its factory in Pune in 2023.

LG commanded 31% of India's air conditioner market as the No. 1 player in 2023, according to industry tracker Omdia. It also controlled 64.2% of its OLED TV market.

India has ample growth potential for household goods makers with the rise of nuclear families and working women.

Its TV penetration stays at 72%. The penetration rates for refrigerators, washers and air conditioners are just 38%, 17% and 8%, respectively. 

India's home appliances market is projected to nearly double to $21 billion by 2025, compared with $1.1 billion in 2018, according to the Korea Trade-Investment Promotion Agency (KOTRA).

On a conference call last month, LG said it was considering listing its Indian arm on the Indian stock market, but nothing has yet been determined.

Write to Chae-Yeon Kim at Why29@hankyung.com
 

Yeonhee Kim edited this article.