Credit rating agency ICRA has upgraded Cantabil Retail India Limited's (CRIL) long-term rating to '[ICRA]A+' from '[ICRA]A' with a 'stable' outlook. The agency has also upgraded the company's short-term rating to '[ICRA]A1' from '[ICRA]A2+'. According to reports from Business Standard, the upgrade reflects CRIL's notable improvement in revenue performance and ICRAs expectation that the company will maintain its growth trajectory in the near-to-medium term, supported by its expanding retail footprint and brand strength.
CRIL's operating income grew by around 18% year-on-year to around ₹852 crore in FY2026, primarily driven by healthy volume-led growth across product categories. As reported by Business Standard, the company's operating margin rose to 31.1% in FY2026 from 28.5% in FY2025, supported by improved operating leverage arising from an increase in the average store size. ICRA expects the company to sustain its healthy operating margin over the near-to-medium term, supported by scale benefits.
The company added 53 net stores in FY2026, taking the year-end count to 652 stores with presence across the country. According to Business Standard, in Q1 FY2027, CRIL added 15 net new stores, taking the total count to 667 stores. The company's financial risk profile remains favourable, supported by healthy cash accruals that are expected to adequately fund its incremental working capital requirements and growth capex.
The ratings continue to favourably factor in CRIL's established presence of its flagship brand Cantabil in the value-for-money mens wear segment, particularly in North and West India, and its pan-India distribution network. As reported by Business Standard, the ratings derive comfort from the asset-light business model with a combination of in-house and outsourced manufacturing along with the outright purchase of apparel, which allows substantial operating flexibility. However, the ratings remain constrained by the high working capital intensity of operations due to large inventory holding requirements.
The company's stock fell 1.40% to end at ₹238.60 on the BSE following the rating announcement. According to Business Standard, CRIL is engaged in designing, manufacturing, branding and retailing of branded apparels and accessories for men, women and kids in the economy-to-mid-range price segments through a pan-India network of exclusive brand outlets (EBOs). The company retails its products under its brand, Cantabil, and had 667 EBOs as on 30 June 2026.
