Credit Rating

SIL/2026-27/SE Date: 19.08.2026 To To BSE Limited National Stock Exchange of India Ltd, Phiroze Jeeheebhoy Towers, Exchange Plaza, Bandra Kurla Dalal Street, Mumbai-400001 Complex, Bandra (East), Mumbai– 400051 Script Code: 539221 Symbol: SPORTKING Sub: Intimation of Bank Loan Credit Rating- Regulation 30 of SEBI (LODR) Regulations, 2015 Dear Sir/ Madam, In terms of Regulation 30 and any other applicable regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform you that following Bank Loan Credit Ratings have been assigned to the company by Crisil Ratings Limited: Sr Name of the Amount R ating Rating Action No Facility (Rs in Crs) 1. Long Term Rating 935.00 Crisil Ratings outlook revised A+/Positive from Stable to ‘Positive’; Ratings reaffirmed 2. Short Term Rating 65.00 CRISIL A1 Ratings Reaffirmed Total 1000.00 The copy of Rating Rational uploaded by Crisil on their website enclosed. You are requested to please take the same on your records. Yours truly, For SPORTKING INDIA LIMITED LOVLESH VERMA COMPANY SECRETARY (ACS: 34171) Rating Rationale August 19, 2026 | Mumbai Sportking India Limited Rating outlook revised to 'Positive'; Ratings Reaffirmed Rating Action Regulator Of Total Bank Loan Facilities Rated Rs.1000 Crore Instrument Crisil A+/Positive (Outlook revised from 'Stable'; Long Term Rating RBI Rating Reaffirmed) Short Term Rating Crisil A1 (Reaffirmed) RBI Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. 1 crore = 10 million Refer to Annexure for Details of Instruments & Bank Facilities Detailed Rationale Crisil Ratings has revised its outlook on the long-term bank facilities of Sportking India Limited (Sportking; part of the Sportking group) to ‘Positive’ from ‘Stable’ and reaffirmed the rating at ‘Crisil A+’. The rating on the short-term bank facility has been reaffirmed at ‘Crisil A1’. The change in outlook reflects the expected strengthening of Sportking’s business risk profile over the medium term. This is supported by sustained demand across domestic and overseas markets, consistently high-capacity utilisation and healthy operating profitability. Additionally, the ongoing Odisha expansion will increase spinning capacity by around 40% from existing 3.79 lakh spindles to 5.29 lakh spindles by fiscal 2028. The operating income remained broadly stable at Rs 2,503 crore in fiscal 2026. This was supported by its strong position in the value-added compact cotton yarn segment and near-full capacity utilisation of 95–97%, reflecting healthy demand absorption. Revenue growth is likely to remain healthy in fiscal 2027 with operating income expected to increase by ~15%. This is supported by strong demand, improved realisation and operationalisation of the upcoming greenfield Odisha facility. The operating margin increased to 11.7% in fiscal 2026 from 11.5% in fiscal 2025 and strengthened further in the first quarter of fiscal 2027. Profitability was aided by high cotton yarn realisation, improved spreads and cost-optimisation measures. The average yarn realisation is expected to further improve by 10–12%, followed by favourable cotton yarn prices. The operating profitability over the medium term is also expected to benefit from the recently commissioned 40.3- megawatt (MW) solar power project, which is likely to reduce power costs and provide annual savings of Rs 14–16 crore. In fiscal 2027, the operating margin is expected to reach 15–16%, supported by sustained yarn realisation and continued healthy demand. As the Odisha facility scales over the medium term, the profitability of the Sportking group is expected to remain healthy above 13% in fiscal 2028 even after factoring in price correction in cotton yarn realisation. The rating reaffirmation factors in the sizeable Odisha expansion project, involving an outlay of Rs 960 crore. The capacity will start operations from the third quarter of fiscal 2027. The Odisha facility will primarily manufacture premium compact cotton yarn, which commands higher realisation than conventional yarn. Incremental earnings from the facility should strengthen net cash accrual to debt obligation ratio of approximately 2.5–3.0 times over the medium term. Timely commissioning without cost overruns, stabilisation of operations and achievement of planned utilisation levels will be monitorable. The financial risk profile is expected to remain comfortable despite the sizeable capital expenditure (capex). Adjusted total debt is expected to increase to Rs 1050–1150 crore in fiscals 2027 and 2028 due to debt drawdown for the capex. However, debt protection metrics are projected to remain healthy, supported by strong cash accrual generation, favourable debt terms, adequate liquidity and healthy operating performance. Debt to Ebitda is expected to remain at 2.0–2.3 times, while interest coverage ratio should remain strong above 6.5 times in fiscals 2027-2029. The net cash accrual to adjusted debt ratio is expected at 0.3–0.5 time, while total outside liabilities to tangible networth (TOL/TNW) ratio should remain below 1 time over the medium term. Liquidity to remain strong, supported by healthy cash accrual of above Rs 300 crore over the medium term, and substantial unused working capital limit of ~Rs 300 crore with average utilisation of only 26%. These strengths are partially offset by the execution risk, large working capital requirement, susceptibility to volatility in cotton yarn spreads and foreign exchange (forex) rates. Analytical Approach For arriving at its ratings, Crisil Ratings has taken a standalone view on the company. Preference capital has been treated as equity due to low coupon rate and no redemption over the medium term. Key Rating Drivers - Strengths Strong position in the cotton yarn industry Sportking has an established market position in the compact cotton yarn segment, supported by an installed capacity of 3.79 lakh spindles, consistently high-capacity utilisation of 95–97%, and operating income of Rs 2,503 crore in fiscal 2026. The business risk profile benefits from a diversified domestic and international presence with exports accounting for around half of revenue and Bangladesh remaining the largest overseas market, supplemented by improving demand from China and emerging markets such as Sri Lanka. The ongoing Odisha expansion will add 1.50 lakh spindles, increasing total capacity by around 40% to 5.29 lakh spindles, while strengthening the company’s access to eastern and southern India and supporting further improvement in its market position over the medium term. Healthy scale and operating efficiency Post previous expansion, Sportking has maintained utilisation at 95–97%, demonstrating its ability to absorb incremental capacity and improve operating scale. The company is strengthening its product mix by focusing on premium and value- added products, including compact, contamination-free, sustainable, slub and multi-twist cotton yarns, which command higher realisation and margin than conventional yarn. The operating margin is expected to remain healthy over the medium term, supported by improved cotton yarn spreads, premium product mix, high-capacity utilisation and cost efficiencies from renewable power initiatives. The proposed Odisha project will increase annual production capacity from 85,540 million tonne (MT) to 123,655 MT, which will further enhanced scale and operating efficiency. The facility will exclusively manufacture premium compact cotton yarn, supporting the company’s shift towards higher- realisations and value-added products. Its strategic location will facilitate penetration into southern and eastern India and improve connectivity to Bangladesh and Sri Lanka through nearby ports, reducing freight costs and delivery timelines. Improving [Showing first 8,000 characters — download PDF for full document]