India Ratings Upgrades V2 Retail's Bank Loan Facilities to IND A/Positive

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 its short-term rating to ‘IND A1’ from ‘IND A2+’.

The upgrade reflects VRL's healthy scale growth of over 60% year-on-year, driven by sustained expansion of its store network, strong same-store sales growth, and efficient inventory management, which supported a steady improvement in EBITDA to over ₹454.4 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. The ratings remain constrained by the company's moderate credit metrics and the intensely competitive nature of the retail industry.

VRL's consolidated revenue grew approximately 63% year-on-year to ₹30,670 million in FY26. The company's EBITDA margin rose to 14.85% in FY26. Ind-Ra expects revenue growth momentum to continue over FY27-FY29 with stable profitability. VRL plans to add over 170 net stores in FY27 and around 200 stores in FY28, mainly funded through internal accruals.