Lava International: Potential Electronics Play Under PLI 2.0 | India’s Homegrown Mobile Brand

Lava International, which is trading at ₹46 per share, is set to benefit from the new government PLI 2.0 scheme, also called the New Mobile Phone Manufacturing Scheme (MPMS), for the period FY27–31, where a total budget of ₹62,500 Cr has been allocated for the scheme.

Under this scheme, Lava is set to benefit under the T2 category, where the Government of India wants to develop three Indian brands at a global scale. But there are certain government checklists that need to be met to get selected for the scheme.

First, the company should have its own design and own IP. The mobile phones should be manufactured in India, and the company should have 51% Indian ownership and be managed by Indians. If these conditions are met, Indian brands can receive a 5% incentive, with an additional 3% incentive for products designed and R&D conducted in India and up to 1.5% for sourcing eligible components domestically, creating a potential maximum incentive of 9.5%.

And in India, there are only 3–4 players that have their own IP, design and manufacturing capabilities in India. Lava is one among them that could get the benefit of the scheme.

Lava management has said that they will apply for the scheme as they are now eligible for it. But the government wants the design to be unique and meet global standards. They have also not kept a threshold for sales, so any company can apply. However, the scheme is still under consideration, and the government is working with three companies to develop them within 18 months. The Government of India has also said it will provide non-monetary support to push these mobile brands in the market.

So, Lava, which is one of the three players in the market, makes the Lava unlisted share worth watching, as it has its own IP and design.

Lava once had a 25% market share, but it slowly lost its market leadership position. It now has less than 0.5% market share in the Indian mobile phone market and around 2% market share in the sub-₹30,000 segment. But the company is now pivoting with new launches in the entry-premium segment.

In CY2025, the company reported that its smartphone portfolio grew 63% YoY, online sales volume increased 74%, and retail sales grew 12%, with the retail network crossing 1 lakh outlets.

In the feature-phone market, it now also has around 25% market share, where it continues to maintain a strong position.

Lava: What Are They Doing Now?

Lava is manufacturing and selling products across various electronic categories.

• Feature Phones: The company sells feature phones under brands such as Hero 600+, A1 Vibe, A5, A7 and Gem Power, targeting the mass-market and entry-level segments.
• Smartphones: Lava primarily offers budget smartphones and is gradually moving towards the entry-premium segment. Its key smartphone series include Agni, Blaze, Yuva, Storm, Bold and Virat, covering the budget to mid-range segments.
• Tablets: Lava currently has one tablet product, Lava S91, which forms a relatively small part of its tablet portfolio.
• Accessories & Wearables: Lava offers Probuds under its earbuds/wearables portfolio and ProWatch under smartwatches. It also sells chargers and other mobile accessories.

In FY25, Lava generated revenue of ₹1,488 Cr, of which it generated about ₹902 Cr (61%) from feature phones and the remaining ₹586 Cr (39%) from smartphones.

If you look at its revenue, it is still heavily dependent on feature phones. However, the company is aggressively targeting 10% market share in the sub-₹30,000 smartphone segment. Management has also indicated that the sub-₹30,000 segment accounts for around 80% of India’s smartphone market, making it the company’s key opportunity for gaining scale.

Out of the ₹3.32 lakh Cr market, about 25% comes under the entry-premium market, where prices are between ₹17,000 and ₹34,000. This market is expected to grow from the current 25% share to 28% by FY30.

At the same time, the mass-budget phone category, which ranges from ₹8,500 to ₹17,000, is expected to decline from 22% to 16% of the market. The entry-premium market is expected to grow at around 12% CAGR during this period.

Lava, with its Agni series, has actively launched new phones in this segment.

The company is now gradually moving towards the Entry Premium segment (₹17,000–₹34,000) through products such as Agni 5G, Agni 3 and Blaze Curve, while newer launches such as the Bold 2 5G and Virat V1 Pro 5G help strengthen its presence across the ₹10,000–₹20,000 range.

Lava’s management has stated that the company currently has around 2% market share and is targeting 10% market share in the sub-₹30,000 smartphone segment.

Overall, till now, it looks great. But the company has not yet reported FY26 results. In press reports, the company said that its smartphone portfolio grew 63% YoY, online sales volume increased 74%, and retail sales grew 12%. However, if you look at FY25 numbers, it is a falling knife.

Lava’s smartphone revenue declined from ₹1,162 Cr in FY24 to ₹586 Cr in FY25, while total smartphone sales fell from 16.76 lakh units to 8.91 lakh units, resulting in capacity utilisation declining from 7% to 4%. ASP also declined from ₹6,933 to ₹6,580 per unit.

Lava generated ₹1,025 Cr revenue from feature phones in FY24, which declined to ₹902.53 Cr in FY25, while total sales volumes declined from 1.37 Cr units to 1.26 Cr units. The company’s ASP declined from ₹747 to ₹719 per unit, while capacity utilisation declined from 32.02% to 29.54%.

At the same time, Lava is expanding its international feature-phone business. Export volumes increased from 1.69 lakh units in FY24 to 5.83 lakh units in FY25, while export revenue increased by around 53% YoY, with exports contributing approximately 3% of feature-phone revenue in FY25.

Revenue also decreased from ₹5,877 Cr in FY22 to ₹2,019 Cr in FY25 due to competition and supply-chain problems, where semiconductor prices increased significantly. These factors are important to watch for Lava unlisted shares.