Credit Rating

October 13, 2026 The Manager The Manager The Department of Corporate Services The Listing Department BSE Limited National Stock Exchange of India Limited P. J. Towers, Exchange Plaza, Bandra Kurla Complex, Dalal Street, Mumbai - 400 001 Bandra (East), Mumbai - 400 051 Scrip Code - 544615 Symbol - KSR Dear Sir / Madam, Ref: Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations') Sub: Credit Rating from India Ratings & Research on Bank Loan Facilities Pursuant to the provisions of Regulation 30 of the Listing Regulations, we would like to inform you that India Ratings & Research, vide its letter dated October 12, 2026, has communicated its ratings with respect to Bank Loan Facilities of the Company for an aggregate amount of INR 360 Million as under: Particulars Amount Rating Rating Action Bank Loan INR 320 Million IND BB+/Stable/IND A4+ Long Term Rating Facilities upgraded; Short-term rating affirmed Bank Loan INR 40 Million IND BB+/Stable Assigned Facilities A copy of the said Letter, as received from India Ratings & Research in this regard, is enclosed herewith. Please take note of the same. Thanking you, Yours truly, For KSR Footwear Limited Company Secretary Membership No.: A58192 Encl: As above India Ratings Upgrades KSR Footwear’s Bank Loans to 'IND BB+’; Affirms Short-Term Rating at ‘IND A4+’; Rates Additional Limits Oct 12, 2026 | KSR FOOTWEAR LIMITED | Footwear India Ratings and Research (Ind-Ra) has upgraded KSR Footwear Limited’s (KFL) bank loan facilities’ long-term rating to 'IND BB+’, from ‘IND BB-’, with a Stable Outlook, while affirming the short-term rating at ‘IND A4+’. The detailed rating actions are as follows: Details of Instruments Size of Rating Assigned Regulator of Date of Coupon Maturity Rating Instrument Type Issue (INR with Instrument Issuance Rate Date Action million) Outlook/Watch Long-term rating IND upgraded; Bank loan RBI - - - 320 BB+/Stable/IND Short- facilities A4+ term rating affirmed Bank loan RBI - - - 40 IND BB+/Stable Assigned facilities Analytical Approach Ind-Ra continues to take a standalone view of KFL to arrive at the ratings. Detailed Rationale of the Rating Action The upgrade reflects an improvement in KFL’s EBITDAR margins and credit metrics between 2HFY26 and 1QFY27, following the successful liquidation of obsolete inventory in 1HFY26 and the improved performance of newly introduced stock keeping units, which is broadly in line with Ind-Ra's expectations. However, the ratings, remain constrained by the company’s modest revenue and stretched liquidity in FY26. In the medium term, Ind-Ra expects the revenue to grow based on increased traction in the revised product portfolio. EBITDA margins are likely to improve with increased operating leverage, resulting in improved credit metrics, while the liquidity is likely to remain stretched. The ratings are, nevertheless, supported by the promoter's extensive experience in the footwear industry. List of Key Rating Drivers Weaknesses Modest revenue; likely to improve in medium term Stretched liquidity Strengths Improved EBITDAR margins in 2HFY26 Improved credit metrics in 2HFY26 Extensive promoter experience in footwear industry Detailed Description of Key Rating Drivers Modest Revenue; Likely to Improve in Medium Term: KFL’s revenue was almost stable at INR1,999.46 million in FY26 (FY25: INR2,057 million) due to muted demand. In 1QFY27, the company generated revenue of INR522.5 million, with EBITDAR of INR32.64 million. Based on 1QFY27 performance and the absence of seasonality, revenue is likely to remain at FY26 levels in FY27. However, in the medium term, revenue is likely to grow due to increased traction in the new product portfolio. Stretched Liquidity: Refer to the liquidity section below. Improved EBITDAR Margins in 2HFY26: KFL is engaged in the wholesale sales of footwear, with EBITDAR margins primarily dependent on the discounts offered for push sales. In 1HFY26, the company reported EBITDAR losses as it offered significant discounts to liquidate obsolete inventory. In 2HFY26, the company introduced new SKUs based on the evolving market demand, which led to a decrease in discounts offered and an improvement in EBITDAR margins to 3.08% and further to 6.25% in 1QFY27. Based on the improvement in the last three financial quarters, the likely increase in traction of the updated product portfolio, further absorption of fixed costs as scale improves, EBITDAR margins are likely to enhance in the medium term. Improved Credit Metrics in 2HFY26: KFL’s interest coverage (operating EBITDAR/gross interest expense +rents) improved to 1.39x in 2HFY26 (1HFY26: EBITDAR losses), and further increased to 3.22x in 1QFY27 primarily attributable to the improvement in EBITDAR. In the medium term, Ind-Ra expects the credit metrics to improve due to the likely increase in EBITDAR. In FY26, credit metrics remained weak as the company reported EBITDAR losses. Extensive Promoter Experience in Footwear Industry: The Burman Family has been engaged in the footwear business since 1981 and has expanded their presence across India in the last four decades, building brands such as Khadim, British Walkers, and Lazard, among others. This has facilitated the company to establish strong brand perception among customers and build strong relationship with suppliers. Liquidity Stretched: KFL’s average maximum utilisation of the fund-based limits was 96.38%, and non-fund-based limits was 52.68% during the 11 months ended June 2026, since the limits were availed in August 2025. Also, utilisation is likely to have remained around similar levels during July-September 2026. Furthermore, KFL does not have any capital market exposure and therefore, relies on banks and financial institutions to meet its funding requirements. The company’s elongated net working capital cycle improved to 119 days in FY26 (FY25: 188 days), supported by a decrease in the inventory holding period to 149 days (207 days). The company provides a credit period of 90 days to its customers, while it receives a 100-day credit period from its suppliers. The inventory holding period is around 150 days. The cash and cash equivalents stood at INR19.62 million at FYE26 (FYE25: INR10.71 million). KFL has a repayment obligation of INR6.4 million in FY28, while no repayment in FY27. Rating Sensitivities Negative: A decline in the scale of operations, resulting in a deterioration in credit metrics, with EBITDAR interest coverage falling below 2.5x, or a constraint on liquidity, all on a sustained basis, would lead to a negative rating action. Positive: A substantial improvement in the scale of operations, leading to an improvement in credit metrics and the liquidity, with EBITDAR interest coverage exceeding 3.5x, all on sustained basis, would lead to a positive rating action. Any Other Information Not applicable About the Company Incorporated in 2023, KFL is engaged in the wholesale and distribution of footwears. The company’s registered office is in Parganas, West Bengal. It was formed through the demerger of Khadim India Limited’s footwear distribution business in May 2025. Key Financial Indicators Particulars (INR million) FY26 FY25 Revenue 1,999.46 2,057.10 EBITDAR (76.27) 15.44 EBITDAR margins (%) (3.81) 0.75 Gross interest coverage (x) NM 0.29 Net leverage (x) NM 35.85 Source: KFL; Ind-Ra NM – not meaningful Status of Non-Cooperation with Previous Rating Agency Not applicable Rating History Historical Current Rating/Outlook Rating/Outlook Instrument Type Rated Limits (INR Rating Type Current Rating 15 December 2025 million) IND BB+/Stable/IND IND BB-/Stable/IND Bank loan facilities Long-term/short-term 360 A4+ A4+ Disclosure on instruments / activities and names of regulators: A list of products/activities or ratings of instruments falling under the purview of various financial sector regulators (FSRs) along with the names of respective FSRs has been duly disclosed b [Showing first 8,000 characters — download PDF for full document]