| Indian Terrain Fashions Limited | ||||||
| Ratings reaffirmed at 'Crisil BBB- / Negative / Crisil A3 ' | ||||||
| Rating Action | ||||||
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| 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 reaffirmed its ‘Crisil BBB-/Negative/Crisil A3’ ratings on the bank facilities of Indian Terrain Fashions Ltd (ITFL).
The rating reaffirmation reflects the improvement in the business risk profile of ITFL, driven by recovery in revenue and operating margin over the first nine months of fiscal 2026. The company reported revenue of Rs 271.4 crore till December 2025 in fiscal 2026, up 8% over the corresponding period of the previous fiscal. ITFL has demonstrated a trend of improving operating margin over the two quarters through December 2025, primarily due to strategic initiatives such as channel and store rationalisation, as well as efficient working capital management. However, the liquidity profile remains stretched because of high bank limit utilisation of 98% on average over the 12 months through November 2025. However, the company's liquidity is supported by unencumbered cash of around Rs 8.2 crore as on December 31, 2025, held in mutual funds and bank accounts. The company is utilising cash accrual from business and surplus liquidity to reduce payables. Sustenance of revenue and operating margin, along with improvement in the liquidity profile through higher cushion in bank limit, remain monitorable.
The ratings continue to reflect the strong market position of ITFL, supported by the extensive experience of its promoters in the apparel retail industry, and the company’s comfortable capital structure and improving debt protection metrics. These strengths are partially offset by large working capital requirement and vulnerability to changes in fashion trends and competition. |
Analytical approach Crisil Ratings has evaluated the standalone business and financial risk profiles of ITFL. |
Key rating drivers - Strengths Strong market position supported by the extensive experience of the promoters: ITFL retails readymade garments for men under its flagship brand, Indian Terrain through its own stores, franchisees, multi-brand retail outlets and large format retail counters such as Shoppers Stop Ltd (‘Crisil A+/Stable/Crisil A1+’) and Lifestyle International Pvt Ltd (‘Crisil AA+/Stable/Crisil A1+). ITFL has presence across India, mostly in the southern region, with total store count at 194 as of December 2025. Exclusive brand outlets (EBOs) contribute the highest revenue, at over 35% of the total revenue. The three-decade experience of the promoters in the apparel retail industry, their strong understanding of the market dynamics and healthy relationship with suppliers and customers should continue to support the business.
Comfortable capital structure: The capital structure has been comfortable due to limited reliance on external funds, as indicated by gearing of less than 1 time and total outside liabilities to adjusted networth ratio of less than 2 times as on March 31, 2025 (0.73 time and 1.55 times, respectively, a year earlier).
Improving debt protection metrics: Debt protection metrics are expected improve, with interest coverage projected at 1.3-1.5 times for fiscal 2026 as against 0.05 time in fiscal 2025, owing to better-than-expected operating performance. |
Key rating drivers - Weaknesses Large working capital requirement: Gross current assets were at 284-358 days for the past three fiscals and over 300 days as on March 31, 2025, driven by receivables of 254 days and inventory of 76 days. Receivables were high due to business with large format stores (LFS) and e-commerce partners. ITFL has implemented measures to optimise its working capital in fiscal 2026, including channel rationalisation and revised e-commerce partnerships. These initiatives as well as the company's efforts to minimise payables are likely to improve its working capital cycle in fiscal 2026. Any stretch in the working capital cycle that might impact the liquidity will be monitorable.
Vulnerability to changes in fashion trends and competition: ITFL’s business is driven by fashion trends, particularly in the urban regions and among consumers in the age group of 18-40 years, who are significantly influenced by peers, role models and the media. Moreover, because of competition from numerous other domestic and global brands, players such as ITFL need to constantly innovate and adapt to the changing preferences of the target segment. The entire revenue of ITFL comes from the men’s category, with major contribution from shirts, trousers, T-shirts and denimwear. The concentration risk is mitigated by the company’s longstanding and strong market presence. |
Liquidity Stretched ITFL's liquidity is stretched due to high bank utilisation (98% on average over the 12 months through November 2025). Cash flow shortfall in fiscal 2025 was addressed through equity infusion of Rs 28.7 crore. However, net cash accrual is expected to increase in fiscal 2026. Liquidity is supported by Rs 8.2 crore in mutual funds and cash and bank balances as on December 31, 2025, though this has declined from Rs 13 crore as on March 31, 2025. |
Outlook Negative Crisil Ratings believes ITFL’s liquidity may remain under pressure over the medium term owing to high bank level utilisation and reduced unencumbered cash. |
Rating sensitivity factors Upward factors
Downward factors
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About the company Incorporated in September 2009, ITFL retails readymade garments for men, such as shirts, trousers, T-shirts, jackets and sweaters under the Indian Terrain brand. The domestic retail division of Celebrity Fashions Ltd (‘Crisil B+/Stable/Crisil A4’) was demerged into ITFL with effect from April 1, 2010. The company has more than 200 EBOs, with a mix of company-operated and franchise-operated outlets along with 1,000+ multi-brand outlets, 400+ LFS doors and 5+ e-commerce partners. ITFL is listed on the Bombay Stock Exchange and National Stock Exchange. The company is promoted by Venkatesh Rajagopal (chairman and whole-time director) along with his family members. Charath Narsimhan (managing director) manages daily operations. |
Key financial indicators
Crisil Ratings-adjusted numbers |
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||
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Criteria Details
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