Vaibhav Global Ltd Management Discussions

ECONOMIC OUTLOOK OF ADDRESSABLE MARKETS

This section outlines the economic and market conditions across our primary addressable markets over the last fiscal year. The US, UK, and Germany each exhibited distinct economic environments, reflecting varied market dynamics.

United States (US)

The US economy demonstrated resilience in 2025, expanding by 2.1%. Growth was supported by technology-driven investments, fiscal stimulus measures, and accommodative financial conditions. For 2026, GDP growth is projected at 2.3%, and 2.1% in 2027, reflecting the moderated fiscal support and easing consumption. Inflation is projected at 2.9% in 2026 and 2.2% in 2027, with price pressures expected to ease. The U.S. continues to benefit from a strong digital ecosystem, online penetration, and adoption of omnichannel retail. Technology-led investment and sustained household spending strengthen retail activity, particularly in value-driven and digitally-enabled formats. For Vaibhav Global Limited, the U.S. remains a key growth market, supported by a resilient consumer base and e-commerce ecosystem, expanding our vertically integrated TV and digital retail model. On the trade front, the year was eventful. The US initially raised tariffs on Indian imports to 50%, which were subsequently reduced to 18% following the India-US trade deal, and later in the year the US Supreme Court struck down these tariffs altogether - a development that is expected to benefit globally integrated retailers like us. To navigate the higher tariff environment, we proactively added jewellery manufacturing capability in the US, strengthening supply chain resilience and our ability to serve customers competitively irrespective of trade policy outcomes. However, a prolonged escalation of US-lran tensions could trigger renewed inflationary pressures and remains a key monitorable.

United Kingdom (UK)

The UK economy grew 1.3% in 2025, reflecting steady expansion. Growth is expected at 0.8% in 2026 and 1.3% in 2027, showing gradual improvement despite a complex global environment, such as trade-related uncertainties. Easing monetary policy and improving financial conditions are expected to provide support. Inflation in the UK is likely to return to target by the end of 2026 as labour market conditions soften. As energy costs ease and inflation stabilises, household purchasing power is set to recover. The countrys mature e-commerce ecosystem and digital adoption offer structural support to online retail. This creates a favourable environment for Vaibhav Globals value-driven fashion and lifestyle products, supporting customer engagement.

Germany

Germanys economy is showing early signs of recovery, expanding at 0.2% in 2025, and is expected to increase at 0.8% in 2026 and 1.2% in 2027. This strengthens our position in this market, which we strategically re-entered five years ago. Targeted investments across leading TV networks and digital platforms enhanced brand visibility, expanded reach, and drove revenue and market share. With its strong logistics network, internet penetration, and online adoption, Germany remains a promising market for digital retail businesses. Despite previous energy shocks and softening external demand, Germany is witnessing improving financial conditions. We sustained strong performance, delivering 3.3% year-on-year (YoY) growth while continuing to increase our market share in the country. Inflation in the euro area is expected to remain close to 2.6%, supporting stable pricing and customer confidence. As a result, demand for affordable fashion and lifestyle products on trusted digital platforms is likely to rise, supporting scalable growth for Vaibhav Global.

[Source: IMF World Economic Outlook April 2026]

INDUSTRY OVERVIEW

1. Digital Retail

The Global e-commerce market size stands at US$ 36.21 trillion in 2026 and is estimated to reach US$ 77.58 trillion by 2031, expanding at a 16.46% CAGR. Growth in digital retail is supported by rising internet access, higher smartphone usage, evolving consumer behaviour and innovation in digital payment. With improved shopping experiences, technology integration and rising adoption of social and video commerce, the sectors long-term growth potential is reinforced.

VGL continues to strengthen its digital infrastructure to support the Companys long-term growth and customer engagement. With targeted investments across digital channels such as web, mobile, OTT platforms and smart TV, we enable broader access and improve customer interaction. Our integrated manufacturing and supply chain allow rapid adoption of changing market trends and accelerate product offerings. To elevate the digital shopping experience, VGL enhances platform usability, customer relationship management (CRM) system and digital commerce platforms. Advanced technology, such as artificial intelligence and predictive analytics, is integrated to improve consumer acquisition and scheduling efficiency. Our Al-driven product scheduling tool, which was in beta testing last year, has now moved into production, helping improve viewer engagement and airtime productivity. We have also expanded our use of generative Al to scale ad creatives, write product descriptions, and optimise website content, boosting our digital visibility and SEO. Additionally, data analytics is applied to product records to improve gemstone and jewellery assortment. For example, the Inventory Planner enables us to identify high- performing product configurations based on demand history and real-time inventory.

To improve consumer engagement and responsiveness, we have deployed an Al-enabled chatbot across our digital platform to deliver real-time customer support. Further, the comprehensive ‘Voice of Customer (VOC) framework complements this initiative by systematically capturing and analysing feedback across email, SMS, websites and social media. We shifted to a cloud-native environment and strengthened API integration from our backend infrastructure to enhance system agility. With increasingly data-oriented marketing, we leverage search optimisation, paid search, social media outreach, affiliate partnerships, and targeted email campaigns to increase reach. Klaviyo and Attentive are integrated across retail operations to enable advanced audience segmentation and engagement through email, push communication and SMS.

Collectively, these initiatives reflect one integrated digital transformation - modern infrastructure (cloud-native systems and APIs), embedded intelligence (Al and analytics), and richer customer experiences (apps, OTT and live video commerce) - reinforcing our commitment to a ‘Digital-First framework designed to improve customer loyalty, repeat transactions, return on marketing investment and sustainable expansion.

2. Teleshopping

The Teleshopping industry is projected to grow from US$369.24 billion in 2025 to US$806.09 billion by 2035, exhibiting an 8.12% CAGR during 2025-2035. Growth in the teleshopping industry is supported by the increasing installation of television sets and internet connectivity, particularly through smart TV platforms. Enhanced connectivity is making teleshopping more accessible and interactive for a wider consumer base. Consumers continue to prefer teleshopping for its convenience and the comfort of purchasing from their homes. Technology improvements such as high-definition broadcasting, interactive television and simplified payments have strengthened the shopping experience and conversion rates. VGL group is utilising data-driven insights to customise programming and product offerings, aligning with evolving consumer preferences and consumption patterns. With a television network of approximately 127 million households across the US, UK and Germany, VGL group is strengthening its market presence. The unique customer base stood at 681 k, supported by strong customer acquisition and engagement throughout the year.

[Source: Marketresearchfuture]

TAM (Total Addressable Market) of US$ 20 billion in high- potential e-tailing markets

	Immediate Addressable Market Size
US	$14-$15bn
UK	$2-$2.5bn
Germany	$3bn

Growth Drivers

Demographic Advantage: Demographic trend is likely to support demand in the teleshopping industry. Baby Boomers now own $85 trillion or more than half of U.S. household net worth, and some $105 trillion is expected to be inherited by members of Generation X. These cohorts remain the core audience of teleshopping platforms, with relatively higher discretionary spending ability. Moreover, technology adoption among Baby Boomers continues to rise, with research indicating that nearly 28% of them prefer digital wallets over traditional payment in the US.

Tech-driven Consumer Experience: Transitioning to high- definition and ultra-high-definition broadcasting has significantly improved the viewing experience, creating a visually compelling and interactive teleshopping experience. Integrating Al and machine learning further reinforces digital shopping through personalised product recommendations, improved customer segmentation, and more precise targeting. Al-driven tools are also enhancing backend business processes, including program scheduling, demand forecasting, and inventory planning. Such data-led interventions improve faster decision-making and operational responsiveness. The adoption of smart TVs with internet connectivity is improving interactive commerce, linking entertainment content with purchasing capabilities.

Convenience-Led Retail Growth: The rising preference for convenience-led consumption continues to reshape retail dynamics, driven by increasing disposable incomes and digital adoption. Consumers increasingly prioritise flexibility and prefer to shop without time or location constraints. This behavioural shift towards home-based shopping, particularly through TV and digital platforms, continues to reinforce TV shopping as a reliable and accessible retail channel.

Evolving Digital Payments: Digital payments are rapidly evolving, driving accelerated retail growth. Multiple downpayment solutions such as digital wallets, Buy Now Pay Later (BNPL) options and traditional card payments streamline transactions. This seamless payment experience is driving higher participation across teleshopping and e-commerce.

Expanding Over-the-Air (OTA) Distribution: The U.S. television landscape continues to witness structural change. While traditional TV continues to see overall declines in cable and satellite, adoption patterns vary significantly by demographics. A study shows that in 2025, only about 1 in 6 adults under 30 subscribes to traditional pay TV, whereas older viewers (55+) continue to maintain higher engagement with linear TV formats. Pay-Tv and cable subscriptions remain significant; however, the industry witnesses subscriber losses, with over 20 million households disconnecting from cable and satellite services since 2014. This trend is likely to continue as consumers are more inclined toward alternative viewing options. The expanding over-the-air (OTA) footprint represents a scalable opportunity, in line with long-term shifts in consumer viewing behaviour. VGL is strengthening OTA distribution while maintaining Pay-TV presence. We have scaled our OTA presence from around 1 million households in 2013 to 17 million households by 2026, reflecting expansion efforts. Our U.S. operations now include nearly 14.1 million only full-power and 14.2 million only low-power OTA households.

Over-The-Top (OTT) Platforms: The global OTT market continues to expand, shaped by rising demand for online content, broadband infrastructure, and expanding 5G network coverage. The global OTT market is estimated at US$ 383.52 billion in 2026 and is forecast to reach US$ 626.69 billion by 2031, registering a CAGR of 10.32% over 2026-2031 (Source: Mordor Intelligence). The US remains one of the most developed OTT ecosystems, with high penetration of connected devices and strong streaming engagement. The US OTT market reached US$ 136.67 billion in 2026 and is projected to grow to US$ 234.73 billion by 2031, expanding at an 11.42% CAGR (Source: Mordor Intelligence). As of late 2025, 91% of US internet households subscribed to at least one streaming video service, while traditional pay-TV had declined to 41% of households (Source: Parks Associates). These trends underscore the ongoing shift from traditional pay-TV toward streaming, supported by growing use of internet-connected devices such as smart TVs, streaming sticks, and mobile devices. At VGL, as part of our omnichannel distribution strategy, we are investing in OTT platforms and strengthening our presence across streaming services to reach audiences beyond traditional broadcast channels. These strategic investments are translating into stronger revenue and increased customer onboarding.

3. Proprietary Web Platforms

VGL Group actively advances investments in reinforcing its proprietary digital ecosystem, such as our websites and mobile applications. Supported by a resilient IT infrastructure, these platforms drive customer retention. We consistently integrate advanced digital practices, including new features, improved user interface, and better platform functionality, to elevate customer experience. With the aim of unlocking scalable growth opportunities, we emphasise sustained investment in owned digital assets.

4. Live Video Commerce

The convergence of live, interactive video and instant purchasing - is emerging as one of the fastest-growing formats in global retail. The global livestream e-commerce market was valued at US$172.9 billion in 2025 and is projected to reach US$ 2,546.5 billion by 2033, expanding at a 41.0% CAGR from 2026 to 2033]. Growth is driven by rising consumer demand for authentic, real-time product demonstrations, the expansion of shoppable video across social platforms, smart TVs and OTT channels, and the increasing comfort of younger and older cohorts alike with video-led purchasing.

For VGL, live video commerce is not a new frontier - it is our heritage. We have operated live, shoppable video 24 hours a day for decades, and the production studios, on-air presenters, real-time merchandising and fulfilment capabilities we have built are precisely the assets that digital-only retailers are now racing to assemble. During FY26, our live commerce ecosystem reached approximately 127 million television households globally, while digital platforms contributed over 44% of Group B2C revenue, reflecting continued customer migration towards omnichannel shopping. Supported by 6,81,000 unique customers, a 38% customer retention rate and an average of 23 pieces purchased per customer on a trailing twelve-month basis, our OTT, livestream and social commerce initiatives continued to gain traction. We are extending this native strength beyond the television screen: our live broadcasts stream across our websites, mobile applications, OTT and smart TV channels, and we are scaling shoppable live events on social platforms. This makes live video commerce a natural bridge from our TV customer to our digital customer, directly supporting our target of 50% digital revenue by the end of FY27.

(Source: Grandviewresearch)

BUSINESS OVERVIEW

Established in 1980, Vaibhav Global Limited (‘The Company or ‘VGL Group) has evolved through steady expansion and transformation into an omnichannel, fully integrated retailer specialising in fashion jewellery and lifestyle products. The group operates a dedicated home shopping television network, including Shop LC in the United States, Shop TJC and Ideal World in the United Kingdom, and Shop LC in Germany. All these collectively reach over 127 million households. Beyond its television presence, the Company has built its digital footprint through proprietary mobile app, e-commerce websites, OTT platforms and other online channels. These platforms complement the broadcasting network, improving consumer engagement and reinforcing our online retail model.

Flywheel: Journey from being good to great

Our transformation from ‘good to ‘great is driven by a clearly defined 4R strategy and is reinforced by a growth cycle. As an omnichannel retailer that is value-focussed, VGL engages price-conscious consumers through its television and digital platforms, delivering compelling quality at an accessible price. With this proposition, consistent consumer acquisition is supported by improving repeat purchases. Our social initiative "your purchase feeds" which is aimed at funding mid-day meals through every order placed, reflects our ESG commitment. Through this combined strategy of value, customer experience, and purpose-driven impact, we create a cycle of trust, loyalty, and growth.

KEY STRENGTHS

Omnichannel Strategy: Our integrated omnichannel model reinforces customer connectivity while creating growth opportunities across multiple platforms. Our proprietary TV networks, over-the-air networks and digital channelstogether reach nearly 127 million households. The extensive presence offers a unified and convenient shopping journey across different touchpoints. This supports improved customer metrics such as higher average spending, frequent repeat purchases, stronger retention and increased lifetime value.

Diversified Product Portfolio: Fashion jewellery and gemstones continue to drive VGLs B2C business, contributing around 65% of overall sales. We introduce nearly 14,000-15,000 new designs each year, supported by our in- house designers, dedicated design teams, and integrated manufacturing and sourcing capabilities. With these agile operating models, we respond swiftly to emerging consumer trends. For example, in line with the rapid changes in demand patterns, we expanded our lab-grown diamonds within a short timeframe. Consequently, lab-grown diamond sales have significantly increased, now accounting for nearly 11% of B2C revenue.

In addition to jewellery, other sources of generating B2C revenue include a lifestyle portfolio spanning home furnishings, beauty and personal care, fashion apparel, and accessories. With over 5,000 SKUs, the segment is witnessing increasing customer acceptance and repeat buying. Supported by a globally diversified sourcing and a dedicated merchandising team, the lifestyle product category and fashion jewellery account for nearly 35% and 65% of B2C revenue, respectively.

Vertically Integrated Supply Chain: VGLs competitive positioning is strengthened through its well-established and geographically diversified supply chain. Our in-house manufacturing capabilities for fashion jewellery offer control over cost structures, quality standards and production timelines that optimise margin and supply chain resilience. To expand our lifestyle portfolio, we collaborate with reliable third-party suppliers, improving product scalability. This hybrid approach ensures timely responses to changing market demand. With sourcing spanning 30+ countries across India, China, the Asia-Pacific region, Africa, Europe, and Latin America, our global presence strengthens our procurement base and risk diversification. This balanced structure allows us to capture greater value across the supply chain, sustaining gross margins above 60% and supporting operating performance.

In-House Brands and Innovation-Led Growth: We have streamlined our proprietary brand portfolio from 33 to 16 to strengthen brand equity. Currently contributing nearly 49% of B2C revenue, these brands are expected to scale to nearly 50%+ by FY27. Growth is likely to be driven by disciplined capital allocation, a defined brand evaluation matrix and targeted marketing campaigns. To deepen customer engagement, our brands are positioned with a distinct value proposition. In parallel, we pursue selective inorganic opportunities to strengthen our portfolio. Our expansion approach is exemplified through acquisitions such as Rachel Galley and Mindful Souls.

Innovation remains central to our organisational culture. VGL implements structured initiatives, including the Idea Lab, the lnnov8 portal, and a Process Innovation suggestion programme. These platforms encourage cross-functional ideation across product development and operations. With our global innovation outreach initiatives, we seek inputs from employees, customers, and external collaborators. This has resulted in three design patents, including the Hanabi Cut Ring, Triangular Bead Spinner, and Arthritis Ring, reinforcing our commitment to differentiated product offerings.

FY26 IN BRIEF

FY26 was a year of steady growth and operational strengthening, despite macroeconomic challenges. We delivered improved revenue and profitability, driven by ongoing digital investments and Germany & Ideal World turning to profitability. Group revenue for FY26 reached Rs.3,692 crore, up 9.2% from Rs.3,380 crore in FY25, backed by consistent performance across markets and distribution channels. Our integrated supply chain, blending in-house production with global sourcing, continued to be a key growth driver, maintaining gross margins above 60%+.

Our acquired businesses, Ideal World and Mindful Souls, played a critical role in our FY26 performance.

Ideal World sustained its EBITDA profitability through FY26, supported by a leaner cost structure and shared infrastructure with our UK operations.

Mindful Souls is helping to give meaningful outcomes in our digital journey, achieving a PBT margin of around 8.2% and engaging over 98k unique customers. To attract new buyers, we are focussing on single-item product offerings at lower acquisition costs. Across the Group, we are ensuring value through supply chain efficiency, digital capabilities, and product innovation.

U.S. retail sales gradually recovered, driven by stronger consumer confidence and easing inflation. In the UK, household purchasing power increased, owing to moderating economic conditions. To respond to these evolving consumer preferences, we continue to adjust our offerings. In Germany, continued strength in live TV commerce and improving digital adoption. The German business achieved EBITDA breakeven in FY26, a notable milestone for us. It is expected to contribute positively to group profitability from FY27 onwards.

Through our 4R framework (Reach, Registration & Acquisition, Retention, and Repeat), we are strengthening our customer base. As of FY26, our TV network had a reach of 127 million households. The total unique customer base grew to 681k. New customer additions reached 3.5 lakh, and the retention rate stood at 38%. Each customer purchased, on average, 23 pieces during the past 12 months.

RETAIL OPERATIONS

United States: The year had its share of noise. Precious metal prices spiked. The US went through tariff-related uncertainty and US-lran tension. Despite all of this, we navigated the year well. We also see the recent macro developments as supportive for VGL.

In FY26, the U.S. remained a key retail market for Vaibhav Global, supported by a resilient economy, sustained growth, and easing inflation. The lowered tariff on Indian imports is expected to enhance growth prospects for VGLs globally integrated retail businesses. We are leveraging the USAs strong digital ecosystem, high online penetration, and adoption of omnichannel retail. To meet peak demand efficiently, we emphasised streamlining our airtime planning and supplies. These factors supported expanding our vertically integrated TV and digital retail model, attaining 3.0% YoY growth and market share in the U.S.

United Kingdom: In FY26, VGLs UK operations benefited from a stable economic environment, with stable GDP growth and easing inflation. Improving household purchasing power supported consumer spending, while the countrys mature e-commerce ecosystem and strong digital adoption provided a solid foundation for our online retail business. The recent India-UK Free Trade Agreement is a favourable environment for a vertically integrated retailer like us.

Germany: Germany remained a high-growth market for Vaibhav Global, with the business achieving EBITDA breakeven in FY26, a notable milestone for us. It is expected to contribute positively to group profitability from FY27 onwards.

Revenue Mix by Geography

	FY24	FY25	FY26
US	63%	59%	59%
UK	28%	29%	30%
Europe	9%	12%	11%

Revenue Mix by Format

	FY24	FY25	FY26
TV	61%	59%	56%
Digital	39%	41%	44%

Supply Chain

VGLs hybrid supply chain continues to be its core strength, integrating in-house manufacturing and a globally diversified sourcing network. To ensure control over quality and timelines, we produce fashion and gemstone jewellery internally. The lifestyle products are sourced through credible partners across 30+ countries, such as India, China, Asia- Pacific, Africa, Europe, and Latin America. This approach offers agility, scalability, and cost-effectiveness. With our vertical integration, we sustain gross margins over 60%, adapt to market shifts, and ensure faster turnarounds. This mitigates geographic risks and provides resilience against global disruptions, as seen during the trade tariff conflicts.

Improving Consumer Trust

Throughout FY26, we maintained a strong focus on building customer trust. We stayed close to our customers by listening carefully to their feedback and refining our engagement. Our 4R strategy, Reach, Registrations & Acquisitions, Retention, and Repeat, guides our execution. Across the US, UK, and Germany, our customer service teams have consistently worked to ‘Deliver Joy. Their dedication is reflected in our strong outcomes, with a CSAT score of 96%+ and an impressive NPS of 57+. Our instalment-based payment option, Budget Pay, is reinforcing consumer purchases. This year, it contributed to 38% of B2C revenue, strengthening its relevance in improving shopping affordability.

OPERATIONAL & FINANCIAL OVERVIEW

Key Highlights

Live 24/7 TV Shopping Network: As FY26 ends, our TV distribution network reached approximately 127 million households across the US, UK, and Germany, spanning cable, satellite, telco, and over-the-air (OTA) platforms. This comprehensive presence plays a vital role in customer acquisition. Television contributed nearly 56% to total B2C revenue, with 5.7 million units sold during the year. The average selling price of 38.6$ underscores our strong assortment strategy and value-led offerings. With our 24/7 live broadcast model, we ensure constant viewership and a curated, interactive shopping experience.

Digital Sales: Digital sales continued to expand in FY26, contributing 44% to overall B2C revenue. Sales were generated through our mobile apps, website-based live TV, third-party marketplaces, and social media platforms. Owing to constant investment in technology upgrades, content strategy, and digital marketing, our performance across channels has strengthened. Revenue from digital channels increased 17% year-on-year, led by improved customer engagement across platforms. We are well-positioned to reach our 50%+ digital revenue target by FY27, driven by ongoing enhancements in user experience, personalisation, and omnichannel integration. During FY26, VGLs digital sales rose to Rs. 1,541 crore compared to Rs. 1,314 crore while the average selling price increased to $36.7 compared to $31.8 last year.

B2B Sales: In FY26, B2B revenue grew to Rs.198 crore from Rs.166 crore in FY25, registering a 19.6% YoY increase. Despite this strong growth, B2B continues to be a complementary and opportu nity-led segment of our business. With our participation in B2B, we are enabled to stay attuned to emerging jewellery trends and advancements in manufacturing technologies. It also enhances operational efficiency and optimal capacity utilisation. Amid ongoing macroeconomic disruptions and the evolving China+1 strategy, we will expand B2B selectively, ensuring it supports our broader strategies.

FINANCIAL PERFORMANCE

Total Revenue: FY26 was a resilient year for our business. Revenue increased to Rs.3,692 crore from Rs.3,380 crore in FY25, delivering 9.2% growth despite macroeconomic volatility. All key markets contributed to this performance, although at varying growth rates.

EBITDA: In FY26, we reported an EBITDA of Rs.399 crore, representing a margin of 10.8%, compared to Rs.317 crore and 9.4% in FY25.

Profit After Tax: Our PAT for FY26 stood at Rs.266 crore, up 73.8% year-over-year from Rs.153 crore in FY25. The PAT includes MAT credit of Rs. 47 crore. This growth reflects our focus on constantly improving our gross margin due to improved contribution from the digital business and Germany business getting back on track.

Operating Cash Flows, Free Cash Flows and Dividends:

FY26 was another year of strong cash generation. We closed the year with Rs.305 crore in operating cash flow and Rs.272 crore in free cash flow, while continuing to invest in our digital capabilities. We maintained a disciplined approach to capital allocation, with a net cash position of Rs.296 crore as of March 31, 2026. The dividend payout for the year stood at 37% of earnings, balancing shareholder rewards with continued investment in the business for future growth.

KEY FINANCIAL RATIOS

Standalone

Ratio	FY26	FY25	Explanation of significant changes, wherever applicable
Debtors Turnover (Times)	2.73	4.27	The decline is primarily due to an increase in trade receivables from group companies during the year.
Inventory Turnover (Times)	3.60	4.68	The decline is mainly attributable to higher average inventory levels maintained to support business operations and product availability.
Interest Coverage (Times)	23.66	26.72	Marginal decline is primarily due to a relatively higher increase in finance costs compared to growth in operating profit (EBIT).
Current Ratio (Times)	2.86	2.25	Improvement is mainly driven by higher current assets, including cash and bank balances and other current assets, resulting in stronger liquidity.
Debt-Equity Ratio (Times)	0.13	0.16	Improvement is attributable to lower borrowings and/or growth in shareholders equity during the year.
Operating Profit Margin (%)	25.00	20.19	The increase is mainly on account of improved operating efficiencies, a favourable product mix, and better cost management.
Net Profit Margin (%)	45.55	27.32	Improvement is primarily driven by higher operating profitability, along with increased other income and effective cost management. Also, due to the expected income due to the MAT Credit.
Return on Net Worth (%)	32.77	30.13	The increase is mainly due to higher profitability during the year, resulting in improved returns on shareholders funds.

Consolidated

Ratio	FY26	FY25	Explanation of significant changes, wherever applicable
Debtors Turnover (Times)	11.13	10.62	Improvement is primarily due to better collection efficiency and higher revenue growth relative to average trade receivables.
Inventory Turnover (Times)	4.88	5.21	Marginal decline is mainly attributable to higher average inventory levels maintained to support business growth and ensure product availability.
Interest Coverage (Times)	19.87	18.09	Significant improvement is primarily due to higher operating profit (EBIT) and lower finance costs, resulting in enhanced debt servicing capacity.
Current Ratio (Times)	2.76	2.37	Improvement is mainly due to an increase in current assets and better working capital management.
Debt-Equity Ratio (Times)	0.07	0.08	Improvement is attributable to lower debt levels and continued strengthening of the Companys net worth.
Operating Profit Margin (%)	10.70	9.31	Improvement is mainly driven by better operating efficiencies, favourable product mix, and effective cost optimisation initiatives.
Net Profit Margin (%)	7.21	4.53	Increase is primarily attributable to improved operating performance and higher profitability during the year.
Return on Net Worth (%)	17.75	11.74	Improvement is mainly due to higher consolidated profit after tax, leading to better returns on shareholders equity.

SWOT ANALYSIS Strengths

Integrated Channels: Our operations span a diversified customer interface, including television networks, websites, mobile applications, social media channels, and third- party marketplaces. This integrated ecosystem ensures strengthened customer connectivity across traditional and digital shopping experiences.

End-to-End Integrated Supply Chain: With our integrated supply chain, we ensure operational flexibility and oversight of the value chain. Combining internal manufacturing capabilities and a global sourcing network enables a response to market dynamics, improves cost structure, and maintains resilience despite supply disruptions.

Customer Value Proposition: We maintain a value-driven approach to cost management as we offer one of the lowest average selling prices (ASP) in the market while upholding quality standards.

In-house Production: Our internal manufacturing facilities offer greater control over quality, operational execution, and timelines, reducing dependency on external third-party production schedules.

Sustainability-led Operations: Sustainability remains embedded in our business practices. Through clean energy adoption, community engagement initiatives such as meal support, and focussed efforts to lower the carbon footprint, we continue to build a responsible business model.

Budget Pay: Our Budget Pay initiative is poised to drive sales growth, accounting for 38% of B2C revenue in FY26. With this instalment model, we ensure purchasing affordability and repeat purchase behaviour.

Advanced Digital Infrastructure: To build a resilient and future-ready digital infrastructure, we constantly invest in IT systems. Artificial intelligence, process automation, and analytics platforms are embedded, aiming at improving supply chain visibility, accelerating orders, strengthening consumer responsiveness and data-driven decision-making.

Experienced Management and Strong Governance: The company is led by an experienced management team, supported by an independent board of directors. Structured governance, internal audits, and independent statutory auditors reinforce regulatory compliance and ethical conduct.

Scalability and Expansion: Our business model is designed to support expansion across product portfolios and geographies without structural challenges. The underlying systems, processes and technology platforms enable us to scale without foundational redesign. This approach strengthens our ability to enter new markets and cost-effectively expand product offerings.

Human Capital Excellence: The Company is committed to building a resilient and future-ready workforce. We invest in training programs, leadership development and employee engagement initiatives to foster a motivated organisation. Our inclusive and collaborative culture strengthens innovation while ensuring employee retention.

Customer-Centric Approach: The customers remain at the centre of our organisation. Employees are empowered with the right tools, training and decision-making frameworks to ensure consistent service delivery across departments. Our people-first philosophy translates into enhanced organisational success and brand loyalty.

Weaknesses

Dependency on Technology: As a technology-driven business, our operations rely significantly on secure technology infrastructure. Any interruptions such as network outages, data breaches or application failures may temporarily impact sales, operations, and customer experience. Although we continue to invest in IT upgrades and cybersecurity protocols, technology resilience remains critical to our operations.

High Return Rates: Product Returns are a structural feature of e-commerce and teleshopping formats. However, it can exert pressure on profitability due to added logistics, quality inspections, and handling costs. We continue to emphasise improving product distribution, quality controls, and sizing guidance to manage returns and profit margins.

Regulatory Issues: Our international presence exposes us to diverse regulatory frameworks such as data protection, taxation, advertising standards, and consumer protection laws. Considering regulatory complexity as an ongoing operational consideration, we maintain a dedicated compliance mechanism.

Opportunities

Driving Higher Customer Lifetime Value (LTV): Expanding customer engagement across multiple channels enhances customer lifetime value. Customers who interact through multiple touchpoints, such as TV, digital web, mobile applications, OTT, and social commerce, demonstrate higher purchase frequency, stronger retention, and overall spending. Our focus on personalised and data-driven communication further strengthens cross-platform adoption, accelerating customer relationships and revenue growth.

Technology-Led Engagement: Emerging technologies, including artificial intelligence, machine learning and augmented reality, are creating opportunities to improve customer personalisation. These tools improve product recommendations, predictive insights and immersive shopping experience, including virtual trials. At VGL, we are integrating Al-driven recommendations and advanced CRM systems to refine targeting, cross-selling opportunities and customer relationships. Early outcomes indicate improved conversion efficiency and repeat-buying behaviour.

Accelerating Digital Growth: Owing to increasing consumer adoption of online platforms, digital channels now contribute approximately 44% of our B2C revenue. Our investment in mobile applications, smart TV integration, live video commerce, and social media platforms is likely to enhance digital engagement, particularly among Millennial and Gen Z. Live video commerce is a particularly natural opportunity for VGL - our decades of live broadcast retailing give us production capabilities, presenters and real-time merchandising expertise that digital-native entrants must build from scratch.

Product Diversification: Product diversification remains pivotal to our growth strategy. We prioritise differentiated, value-driven and higher-margin categories. Lab-grown diamonds have demonstrated strong performance and margin potential. Building on this growth, we aim to scale high-potential categories in line with evolving consumer preferences.

Threats

Cybersecurity Risks: Expanding digital commerce increases exposure to cybersecurity threats such as data breaches, phishing attacks, and system intrusions. Safeguarding customer information and system integrity remain critical priorities. We maintain comprehensive cybersecurity protocols, including regular audits and increased access controls.

Regulatory Changes: Our operations are subject to dynamic regulations across jurisdictions, relating to e-commerce, taxation, data privacy, and consumer protection. We actively monitor regulatory developments and update our international policies accordingly to ensure proactive compliance.

Market Competition: We operate in an intensely competitive retail environment characterised by pricing pressures, evolving consumer preferences, and rising customer acquisition costs. This increased competition may impact market share, requiring ongoing agility. To remain competitive, we emphasise differentiated products, disciplined pricing, and enhanced consumer experience across all touchpoints.

Macroeconomic Events: Our international operations are subject to macro events such as geopolitical tensions, climate disruptions, regulatory shifts and pandemics. These factors may impact sourcing, logistics and supply chain efficiency. We proactively manage this risk through our comprehensive Business Continuity Plan and a diversified sourcing strategy designed to maintain operational resilience.

MANAGEMENT OUTLOOK

With consumer behaviour shifting toward digital and multi-platform engagement, VGL continues to strengthen omnichannel capabilities. Our presence across e-commerce platforms, television, mobile apps, and OTT channels enables brand visibility and customer interaction. Our recent acquisitions of Ideal World and Mindful Souls are contributing meaningfully to growth. Ideal World is building operational momentum, and Mindful Souls continues to perform strongly, supported by a loyal consumer base and steady margins. Together, these businesses improve our customer reach and profitability.

Our digital business is demonstrating sustained growth. In FY26, our digital channels recorded 44% of total B2C revenue, and we steadily progressed toward our target of achieving 50%+ by the end of FY27. As we accelerate digital adoption, our focus will be to optimise mobile interfaces, upgrade technology, scale live video commerce across our apps, OTT and social channels, and increase investment in scalable digital platforms. Artificial intelligence will remain a key enabler - from personalisation and customer acquisition to scheduling, demand forecasting and content creation - as we deepen the ‘Digital-First transformation across the Group.

Our lifestyle segment and proprietary brand portfolio are expected to become central to our growth. Lifestyle products currently contribute to 35% of B2C revenue with a medium- term target of 50%. In parallel, our in-house brands are scaling steadily, and we aim to increase their contribution to 50%+ of revenue by FY27. Focussed brand building, differentiated positioning, and customer retention initiatives are expected to support this transition.

Our approach to B2B remains strategic and selective. While B2B may not be a primary growth driver, it offers valuable market insights and enables efficient deployment of manufacturing resources during surplus availability. Amid ongoing supply chain realignments and the adoption of the China+1 Sourcing strategy, we acknowledge potential opportunities to expand our B2B footprint.

Keeping sustainability at the core of our long-term strategy, our ‘your purchase feeds... programme has now delivered over 112 million meals cumulatively till FY26. This deepens our social impact and reinforces our commitment to the community. On the environment front, one of our two manufacturing units in India is now fully solar-powered, with the second unit on our renewable transition roadmap. Additionally, two facilities in the USA and one each in the UK and Germany are leveraging renewable energy.

Looking ahead, we are optimistic about our strategic direction. Germany is moving towards a meaningful bottom-line contribution, and Ideal World continues to build momentum. As a result, we anticipate enhanced operating leverage and overall profitability. Combined with our core business performance, these developments are likely to drive more resilient earnings across geographies. Our focus remains firmly on long-term value creation, while maintaining a disciplined approach to growth, ongoing investment in strategic priorities, and delivering consistent stakeholder returns.

HUMAN RESOURCE MANAGEMENT

Our workforce remains integral to our growth and operational success. Over the years, our focus has been on improving capabilities rather than expanding headcount. We are committed to enhancing talent density by attracting professionals who contribute meaningfully and uplift team effectiveness. This approach enables us to maintain agility, execute faster, and build a culture where collaboration, accountability, and high performance are expected and actively supported.

We remain committed to investing in employee development, well-being, and engagement. Our policies are centred on equity, fairness, and transparency, improving an inclusive and supportive work culture. Employee feedback is actively incorporated into our decision-making and people practices.

To promote transparency and collaboration, we have further improved our internal communication and feedback mechanism. ‘VDot, our in-house application, allows employees to exchange feedback and appreciation across the organisation, reinforcing a responsive and connected workplace. Monthly 1-2-1 reviews recorded via ‘Hono strengthen performance and professional development. Our annual goal-setting discussions align individual objectives with organisational priorities.

Drawing on Humanocracy principles, we have promoted decentralised decision-making and minimised structural complexity, which enables faster decision-making. This model encourages initiative, transparency, and accountability across teams. These efforts are contributing to a stable work environment, and VGL earned recognition as a Great Place to Work across India, the US, UK, Germany, and China.

As of March 31, 2026, the Group had a total workforce of 3,333 employees.

Further details are available in the human capital section of this report and in our Annual ESG Report.

RISK MANAGEMENT

Risk management remains an integral part of our governance approach and is embedded in business activities. Our Enterprise Risk Management (ERM) framework offers a disciplined approach to identifying, assessing, mitigating, and monitoring risks at all organisational levels. The framework is aligned with the globally recognised standard, promoted by the Committee of Sponsoring Organisations (COSO). As a result, it enables us to effectively manage operational, financial, regulatory, and strategic exposures while supporting long-term value.

Risk management is a part of our business strategy and planning. During the annual business planning phase, key risks are identified and evaluated to ensure realistic objectives. Strategic decisions such as geographic expansion, acquisitions, and new product launches are reinforced by scenario analysis and stress-testing. Clearly defined risk appetite and tolerance limits guide decision-making, ensuring alignment between growth initiatives and risk parameters.

Further information is available in the ‘Risk Management and Internal Controls section of the Integrated Annual Report.

INTERNAL CONTROLS

Our organisational framework, with distinct authority levels and internal protocols, upholds rigorous corporate governance standards. We have a robust internal control framework appropriate for the size and complexity of our operations. The internal control systems are designed to provide reasonable assurance about recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance with company policies.

Regular internal audits and management reviews are conducted to ensure the effectiveness of our internal controls. We maintain a comprehensive set of documented policies, guidelines and procedures, supported by technologically advanced platforms that strengthen our Internal Financial Control (IFC) framework. An application- based compliance management system monitors compliance across the Group, aligning with our zero-tolerance policy and enhancing reporting efficiency. The Company has an in-house Internal Audit Department and has appointed PricewaterhouseCoopers Services LLP (PwC), working in a co-sourced model, to oversee and carry out the internal audit. The audit is based on an internal audit plan, reviewed in consultation with the statutory auditors and approved by the Audit Committee, and is oriented towards coverage of all major functions and locations. The Audit Committee is regularly briefed on significant audit observations and corrective actions.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis, describing the Companys objectives, projections, estimates, expectations, or predictions, may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those either expressed or implied. Key factors influencing the Companys operations include, but are not limited to, economic conditions impacting demand, supply and price conditions, fluctuations in raw material prices, changes in government regulations and tax policies, economic trends and other incidental factors.