Credit Rating

V2 Retail Limited 02nd September, 2026 BSE Ltd. National Stock Exchange of India Ltd. Corporate Relation Department, Listing Department Listing Department, Exchange Plaza, C-1, Block- G, Rotunda Building, PJ Towers, Bandra Kurla Complex Dalal Street, Mumbai – 400 023. Bandra (East) Mumbai–400 051 Scrip Code: 532867 NSE Symbol: V2RETAIL Sub: Intimation of upgradation in Credit Rating under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 Dear Sir/Madam, Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, please find below the details of upgradation in rating of V2 Retail Limited: Credit Rating Agency Type of Rating Previous Rating Revised Rating India Ratings & Fund Based – Working Capital IND A-/Stable/IND A2+ INDA/Positive/INDA1 Research Limits of Issue size of INR 1250 million India Ratings & Fund Based – Working Capital - INDA/Positive/INDA1 Research Limits of Issue size of INR 500 million The report from the credit rating agency covering the rationale for revision in credit rating is enclosed herewith. Kindly take the above information on record. Thanking you, YOURS FAITHFULLY, FOR V2 RETAIL LIMITED SHIVAM AGGARWAL COMPANY SECRETARY & COMPLIANCE OFFICER MEM. NO. A55785 Encl.: As above Reg. off.: Khasra No. 928, Extended Lal Dora Abadi Village Kapashera, Tehsil Vasant Vihar, South West Delhi, Delhi-110037 Corporate Off.: 2nd Floor, 13, Sub. Major Laxmi Chand Rd, Maruti Udyog, Sector 18, Gurugram, Sarhol, Haryana 122015 E-mail: customercare@v2kart.com Website: www.v2retail.com CIN: L74999DL2001PLC147724 Tel.: 011-41771850 India Ratings Upgrades V2 Retail's Bank Loan Facilities to ‘IND A’/Positive/‘IND A1’ Sep 01, 2026 | V2 Retail Limited | Diversified Retail India Ratings and Research (Ind-Ra) has upgraded V2 Retail Limited’s (VRL) bank loan facilities’ long-term rating to ‘IND A’ from ‘IND A-’ with a Positive Outlook and short-term rating to ‘IND A1’ from ‘IND A2+’ as follows: Details of Instruments Size of Rating Regulator of Date of Coupon Maturity Rating Instrument Type Issue (INR Assigned with Instrument Issuance Rate Date Action million) Outlook/Watch Bank loan RBI - - - 1,250 A/Positive/IND Upgraded facilities Bank loan RBI - - - 500 A/Positive/IND Assigned facilities Analytical Approach To arrive at the ratings, Ind-Ra continues to take a fully consolidated view of VRL and its wholly owned subsidiary, V2 Smart Manufacturing Private Limited (VSML), considering the 100% ownership and strong operational and financial interlinkages. Detailed Rationale of the Rating Action The upgrade reflects VRL's healthy scale growth of over 60% yoy, driven by a sustained expansion of its store network, strong same-store sales growth, and efficient inventory management, which collectively supported a steady improvement in the EBITDA to over 4,544 million in FY26. The upgrade also factors in VRL's established position in India's value retail segment, with its growing geographical diversification, particularly in tier-2 and smaller cities, providing a competitive advantage and supporting revenue growth and earnings visibility. Furthermore, the company's asset-light expansion strategy has enabled it to expand its footprint with limited capital intensity while maintaining financial flexibility. The Positive Outlook reflects Ind-Ra’s expectation of VRL continuing to gain market share through its ongoing store additions, with operating leverage helping sustain profitability over the medium term. However, the ratings remain constrained by the company's moderate credit metrics and the intensely competitive nature of the retail industry. In addition, an accelerated pace of store expansion could result in a slower-than-expected ramp-up of new stores, which may put pressure on VRL’s cash flows and credit metrics. Therefore, the execution of the company's expansion strategy and the performance of newly added stores are key rating monitorables. List of Key Rating Drivers Strengths Established market position with geographically diversified store presence Healthy operating parameters Strong growth in scale of operations and profitability likely to sustain Weaknesses Moderate credit metrics; improvement likely in medium term Aggressive store expansion plans can impact profitability Intense competition; vulnerability to economic cycles in retail sector Detailed Description of Key Rating Drivers Established Market Position with Geographically Diversified Store Presence: VRL is an established apparel retailer in India with a strong footprint in the retail segment in tier-2 and smaller cities, offering a wide product portfolio across men’s wear, women’s wear, kids’ wear, and accessories. The company had 325 stores spread across 225 cities and 25 states with a total retail area of over 3.5 million square feet as on 31 March 2026. VRL has an entrenched presence in the northern, eastern, and central India, with an expanding footprint in the southern and western India. The company added 136 stores in FY26, and Ind-Ra expects it to add 170 stores in FY27, enabling a deeper penetration into primary markets and pushing its retail area up around 50% yoy. The company rolled out 56 stores(net) in 1QFY27 and crossed the 400-store mark in August 2026. The revenue contribution from its own brands rose to 90% in FY26 (FY25: 80%, FY24: 60%), with an increase likely over FY27-FY28. The cluster-based expansion model enables cost rationalisation and marketing efficiency, while its strategic focus remains on deepening penetration in existing markets and expanding further into tier-2 and smaller cities. Healthy Operating Parameters: VRL benefits from its economies of scale, a healthy share of own-brand sales, and established relationships with a wide and diversified vendor base, resulting in significant operational efficiencies. The same- store sales growth remains healthy despite moderating to 10% in FY26 on a high base (FY25: 30%; FY24: 31%). VRL’s sales per square foot per month (a productivity metric) declined to INR931 in FY26 (FY25: INR1,020), primarily due to the addition of 136 new stores (over 70% network increase). Nevertheless, on a consolidated level, its average selling price increased to INR326 in FY26 (FY25: 295) and average bill value to INR922 (INR854), indicating healthy customer spending. The impact of the recent store additions on VRL’s operating metrics is likely to moderate gradually as the newer stores mature and scale up. VRL closed its in-house manufacturing unit in 2025 and transitioned to an asset-light operating model focused on retailing. Manufacturing is outsourced to third-party vendors, while VRL maintains control over design and product development, enabling brand consistency, operational flexibility, and cost efficiency. Strong Growth in Scale of Operations and Profitability Likely to Sustain: VRL’s consolidated revenue grew about 63% yoy to INR30,670 million in FY26 (FY25: INR18,845 million), driven by steady same-store sales growth, with an increase in customer footfalls, a rise in the average billing per customer, and the ongoing store additions. The company’s EBITDA margin rose to 14.85% in FY26 (FY25: 13.7%), supported by an increasing contribution from own brands, which accounted for 90% of the revenue, alongside improved sourcing efficiencies, enhanced inventory management, and operating leverage. Ind-Ra expects the revenue growth momentum to continue over FY27-FY29 with stable profitability, led by the ramp-up of recently added stores and continued same-store sales growth. Moderate Credit Metrics; Improvement Likely in Medium Term: VRL's consolidated interest coverage (post Ind-AS EBITDA/interest-including the interest on lease liabilities) improved to 4.71x in FY26 (FY25: 3.8x; FY24: 3.1x) due to higher EBITDA. The company's external debt increased to INR2,294 million in FY26 (FY25: INR1,264 million; FY24: XX) due to an increase in working capital limits. Its net [Showing first 8,000 characters — download PDF for full document]