Allcargo Logistics Ltd Management Discussions

The International Monetary Fund in April 2026 World Economic Outlook indicated a moderation in global growth amid ongoing geopolitical uncertainties, including the West Asia conflict. Indias economic outlook continues to remain resilient and relatively stronger than the global average. Global GDP growth is now projected at around 3.1% in 2026, lower than earlier estimates, reflecting the impact of elevated energy prices, supply chain disruptions, and heightened macroeconomic uncertainty. In contrast, India is expected to maintain a robust growth trajectory of approximately 6.5% in FY2026-27, continuing to be one of the fastest-growing major economies globally. This growth is being supported by resilient domestic consumption, sustained public capital expenditure, a gradual revival in private investment, and strong momentum in the services sector.

On the inflation front, India remains relatively well- positioned, with headline inflation expected to stay broadly within the target range set by the Reserve Bank of India of 4% ? 2%. Consumer price inflation is projected at around 4.5%, supported by moderating commodity prices and calibrated monetary policy actions. However, volatility in food and energy prices continues to be an important risk factor to monitor, particularly in the context of global geopolitical developments. The ongoing tensions in West Asia pose near-term challenges through potential spikes in crude oil prices, increased logistics and insurance costs, and possible disruptions to global trade flows. Despite these headwinds, Indias macroeconomic fundamentals remain strong, underpinned by healthy foreign exchange reserves, a stable and well- capitalized banking system, steady credit growth, and a continued policy focus on fiscal consolidation.

The Governments sustained emphasis on infrastructure creation, manufacturing competitiveness, and economic formalization is expected to further reinforce growth momentum over the medium term. Structural reforms, alongside initiatives aimed at improving ease of doing business, are creating a conducive environment for investment and industrial expansion. Key sectors such as manufacturing, renewable energy, digital infrastructure, financial services, and consumer-driven industries are likely to witness strong growth, supported by favourable demographics, rising digital adoption, and ongoing policy support. Additionally, evolving global supply chain dynamics are expected to accelerate opportunities for domestic manufacturing, localization, and diversification, while also encouraging investments in renewable energy and emerging technologies. At the same time, sectors linked to Gulf remittances and overseas employment remain relatively sensitive to regional economic conditions, and will require close monitoring in the near term.

Source: https://www.imf.org/en/publications/weo/ issues/2026/04/l4/world-economic-outlook-april-2026

Source: https://www.imf.org/-/media/files/publications/ weo/2026/january/english/text.pdf

Indias logistics sector continues to play a pivotal role in supporting the countrys economic growth, acting as a backbone for trade, manufacturing, and consumption. The sector has evolved steadily over the past decade, driven by rising economic activity, increasing formalization, and a growing need for efficient, integrated supply chain solutions. As of FY2024-25, the Indian logistics market is estimated at over USD 225-240 billion and is expected to expand significantly over the medium term, reaching approximately USD 350-430 billion by the end of the decade. This implies a steady growth trajectory of around 6-8% CAGR, with key segments such as transportation, warehousing, freight forwarding, and value-added services contributing to this expansion. Warehousing and distribution, in particular, are emerging as high-growth segments, supported by the increasing need for organized storage and faster turnaround times.

The sector is undergoing a structural transformation, supported by a series of policy reforms and large-scale infrastructure investments. Landmark initiatives such as Gati Shakti, Dedicated Freight Corridors, Bharatmala, and Sagarmala are enhancing multimodal connectivity, reducing transit times, and improving overall supply chain efficiency. At the same time, reforms like the Goods and Services Tax and the E-way bill system have streamlined interstate movement of goods, minimized bottlenecks, and accelerated the shift toward a more organized and transparent logistics ecosystem. These measures are expected to gradually reduce logistics costs as a percentage of GDP, thereby improving the competitiveness of Indian industry on a global scale.

A major driver of growth for the logistics sector is the continued expansion of manufacturing and consumption. Government initiatives such as Make in India and the Production Linked Incentive Scheme are boosting domestic manufacturing capabilities, leading to increased demand for efficient logistics and supply chain services. Additionally, the rapid rise of e-commerce and organized retail is transforming logistics requirements, particularly in areas such as last-mile delivery, fulfillment speed, and inventory management. The third-party logistics (3PL) segment is witnessing strong traction, as companies increasingly outsource supply chain operations to specialized providers to enhance efficiency, scalability, and cost optimization.

Technology adoption is emerging as a key differentiator in the sector. Logistics players are increasingly leveraging digital platforms, automation, Internet of Things (IoT), and advanced analytics to improve visibility, optimize routes, and enhance customer experience. Real-time tracking, warehouse automation, and integrated logistics platforms are becoming standard expectations, while cloud-based solutions are enabling better coordination across the supply chain. At the same time, sustainability is gaining importance, with companies focusing on green logistics practices such as energy-efficient warehousing, alternative fuel adoption, and optimized transportation networks to reduce carbon emissions.

Looking ahead, the outlook for Indias logistics sector remains robust, supported by strong macroeconomic fundamentals, favorable demographics, and continued policy support. The sector is expected to benefit from global supply chain realignments, increasing localization of manufacturing, and Indias growing integration with global trade networks. While near-term challenges such as fuel price volatility, infrastructure bottlenecks in certain regions, and geopolitical uncertainties may persist, the long-term growth trajectory remains intact. Overall, the Indian logistics sector is poised for sustained expansion, with increasing formalization, consolidation, and technological advancement expected to drive higher efficiency, improved service quality, and long-term value creation.

Source: https://indianinfrastructure.com/2026/02/ll/ logistics-trends-growing-focus-on-speed-storage- and-sustainability/

During the financial year, Allcargo Logistics concluded its composite scheme of arrangement, as per which the international supply chain business of the company was demerged into Allcargo Global Limited effective 1^st November 2025, with 12^th November 2025 as the record date. Following which the stock of Allcargo Logistics Limited traded ex the international business. Simultaneously, effective 1^st November 2025 the business of express and consultative logistics got merged into Allcargo Logistics.

As per the scheme, shareholders of Allcargo Gati (the company which stopped trading post the record date) received 63 shares of Allcargo Logistics for every 10 shares held. Shareholders of Allcargo Logistics will continue to hold existing shares of the company and will get shares of Allcargo Global as per the approved scheme.

In its new avatar, Allcargo Logistics operates as an integrated logistics player offering end-to-end solutions across domestic express distribution and consultative logistics space. Supported by a pan-India network covering ~100% of serviceable PIN codes, the domestic express business provides time-sensitive, technology-enabled transportation solutions across an extensive multimodal distribution network, while the consultative logistics business delivers customized supply chain solutions spanning warehousing, transportation, and process optimization. This integrated model enhances customer stickiness by combining execution-led express services with solution-driven supply chain capabilities.

The merger gives Allcargo Logistics strong geographic governance with 700+ facilities, 90+ hubs, 8 air logistics centers, and 12 million+ sq. ft of distribution and warehousing space. This enables Wide reach with extensive Tier 2, 3 & 4 Penetration, fast transit time, and market leadership in chemical warehousing. Geographical governance and market leadership in key sectors topped with advanced automation and technology strengthens Allcargos position as a formidable domestic logistics player.

Post the completion of the merger of the Express Distribution and Consultative Logistics business into Allcargo Logistics, the company stands as a domestic logistics powerhouse that will serve as a one stop shop for all logistics solutions of clients. The combined strength enables the company with an opportunity to unlock cross - synergies. Allcargo in its new avatar will gain from maximizing wallet share through cross - selling and driving new business by providing end- to-end solutions and strong execution.

For Allcargo Logistics, the road ahead is anchored in a simple but important objective—to grow consistently ahead of the market while building a business that is resilient, efficient, and capable of delivering sustainable profitability. The Companys focus remains on creating an organization that is stronger, leaner, more innovative and technology-driven.

The Companys key priorities include disciplined yield management, continuous service enhancement, long-term customer contracts and cost optimisation, all of which are expected to improve cash flows and enhance Return on Capital Employed (ROCE). Alongside these initiatives, the Company is focused on accelerating volume growth by strengthening its channel partner ecosystem through performance- led engagement programmes and incentive-driven initiatives that encourage market expansion, customer acquisition and higher shipment volumes across its network.

Service excellence remains central to the Companys growth strategy. The Company continues to strengthen service quality through disciplined execution, operational excellence and industry-leading safety standards.

Within Express Distribution, the Companys focus in Ground Express remains on accelerating volume growth by expanding its reach through a stronger network of franchisees and channel partners. By deepening partner engagement and strengthening its distribution ecosystem, the Company aims to enhance market penetration, improve network accessibility and extend its service reach across existing and emerging markets. The Company continues to strengthen its Air Express network by expanding its presence across key airports, enhancing network connectivity and improving transit efficiency to deliver faster, more reliable and time-definite logistics solutions for customers across India.

Within Consultative Logistics, the Company continues to expand its footprint across diverse industry sectors, broadening its customer portfolio and strengthening its ability to deliver integrated, value-added supply chain solutions. By deepening its presence across multiple industries, the Company aims to create a more balanced business portfolio while addressing evolving customer requirements through tailored logistics solutions.

This reinforces the Companys commitment to faster, more reliable and time-definite logistics solutions for customers with critical supply chain requirements.

The integration of the Companys Express Distribution and Consultative Logistics businesses has enabled it to evolve into a more unified and customer-centric organization, offering end-to-end logistics solutions under one roof. The integrated model not only strengthens the Companys value proposition but also enables deeper customer relationships, unlocks cross-selling opportunities and improves operational efficiencies, positioning the Company to address diverse customer requirements across industries.

The broader logistics sector in India continues to present a compelling growth opportunity, supported by multiple structural tailwinds. Government initiatives such as Make in India and the Production

Linked Incentive Scheme are driving manufacturing growth, while transformative reforms like the Goods and Services Tax and the E-way bill have enhanced efficiency and transparency across the supply chain. At the same time, large-scale infrastructure programs including Gati Shakti, Dedicated Freight Corridors, and Bharatmala are improving connectivity and reducing transit times. Backed by these developments and steady growth in consumption, the B2B express and supply chain services markets are expected to expand at a healthy pace over the medium term, offering significant headroom for growth.

The express business continues to have the widest reach in the country with extensive tier 2, 3 and 4 penetrations. Within our express business, we are focused on driving quality-led growth. Our efforts are centered on improving service reliability, optimizing yields, and taking a more disciplined approach to contract selection by moving away from low-margin businesses. At the same time, we are actively building long-term partnerships with customers and expanding our footprint in the MSME and retail segments. By adopting a more value-driven pricing strategy and enhancing our service offerings, we aim to gain better wallet share and strengthen our positioning in these highly potential segments.

In the Consultative Logistics business, we continue holding market leadership in the chemical warehousing segment while expanding into other sectors. The strategy is to scale our presence by expanding warehousing capacity at strategically important locations. We are also selectively diversifying into high-growth segments such as e-commerce, life sciences, and consumer durables.

Our approach is increasingly sector-focused, allowing us to design customized solutions that address specific industry requirements.

For instance, in the life sciences and healthcare segment, we continue to strengthen our capabilities in temperature-controlled storage while expanding specialized logistics solutions tailored to the sectors unique operational and regulatory requirements, ensuring reliability, compliance and end-to-end supply chain integrity.

For instance, in life sciences and healthcare space, we are building capabilities around temperature-controlled storage and specialized transportation, while in the automotive sector, we are supporting time-sensitive and high- value logistics needs. Apart from providing customized solutions we also provide value added services (VAS) to our customers. These services include knitting and bundling, labelling, repacking and reverse logistics amongst others. Providing customers with value added services and customized solutions helps build customer satisfaction which leads to stickiness.

Another area of focus is improving the pie of transportation revenue; we service multiple clients on the consultative logistics side to whom we can offer the Express Distribution.

Technology continues to be a strategic differentiator and a key enabler of operational excellence across Allcargo Logistics. Our continued investments in digital transformation are focused on building a connected, intelligent and data-driven logistics ecosystem that enhances visibility, improves operational efficiency and delivers a superior customer experience across every stage of the supply chain. During the year, we introduced several technology-led initiatives to optimise first-mile, mid-mile and last-mile operations. Our AI-powered pickup automation solution leverages advanced artificial intelligence to transform unstructured customer email requests into structured pickup instructions, significantly reducing manual intervention, improving response times and enhancing customer service efficiency.

Across our network, the Gate Scan App has digitised warehouse gate and dock operations through automated dock allocation, real-time vehicle tracking and OTP-based driver authentication, improving turnaround times, operational visibility and governance. HubEye, our centralized hub monitoring platform, provides real-time visibility into network operations by integrating vehicle tracking, shipment movement and hub throughput monitoring, enabling proactive planning and improved network efficiency. To further strengthen nationwide operational control, we launched a centralized Control Tower that provides end-to-end visibility across our mid-mile network using multimodal tracking technologies, AI-driven risk profiling and proactive exception management. Supported by a dedicated 24*7 operations team, the platform enhances ETA adherence, network reliability and operational resilience.

On the last mile, our Allcargo Intelligent Mobility (aim) platform leverages telematics, machine learning and GPS-enabled route intelligence to improve delivery planning, increase first-attempt delivery success and enable real-time visibility for both operations teams and customers. Our digital transformation journey also extends to enterprise operations. During the year, we successfully completed the migration to Oracle

Fusion, creating a scalable, integrated finance platform aligned with global best practices. This transformation has streamlined business processes, improved data accuracy, strengthened governance and enhanced decision-making through real-time business insights. These initiatives are complemented by a robust technology ecosystem developed in collaboration with leading global technology partners, including Amazon Web Services, Oracle, IBM and Capgemini. Together, these investments continue to strengthen our digital capabilities, improve operational agility and position Allcargo Logistics to deliver scalable, efficient and future-ready logistics solutions.

As we look ahead, we remain confident that our integrated business model, supported by favorable industry dynamics and a strong execution focus, will enable us to deliver sustainable growth while continuing to create long-term value for all our stakeholders.

Allcargo Logistics delivered a resilient performance on the back of strong execution, improved service quality and cost control measures. The resilient performance came in despite an unstable geopolitical environment which impacted the trade flow both globally as well as in India.

For the financial year 2025-26, on a consolidated basis, the company reported revenue of INR 2,058 crores, up 5% as compared to previous financial year. Gross profit stood at INR 607 crores, up 2% as compared to previous year. EBITDA was reported at INR 233 crores, up 16% as compared to the previous year, reflecting stable operating performance supported by disciplined cost and yield management.

During financial year 2025-26, Allcargo logistics handled total volume of 12.3 lakh metric tons, which was flat compared to the previous year. Total revenue stood at INR 1,442 crores, registering a growth of 2% year-on- year. The realization per ton stood at INR 11,701 reflecting a growth of 2% over the previous year. Client mix for the financial year stayed skewed towards KEA clients with 79% contribution to the revenue followed by retail with 19% contribution and MSME with 2% contribution.

The Consultative Logistics business continued to demonstrate steady growth, with warehouse space under management reaching 8 million square feet as of March 2026. The segment reported annual revenue of INR 615 crores, reflecting a strong growth of 17% year- on-year. E-commerce sector contributed highest to the revenue mix with 55%, followed by auto & engineering which contributed 23% followed by chemical which contributed 22% to the revenue mix.

#The figures have been re-stated to give effect to the Composite Scheme of Amalgamation/Merger.

Debtors Turnover: The improvement was primarily due to higher revenue from operations (Credit sales) during the year.

Interest Coverage Ratio: The ratio improved primarily due to higher EBITDA and lower finance costs following the significant repayment of borrowings during the year.

Current Ratio: The improvement was primarily due to the reduction in current borrowings through repayment of debt during the year.

Debt Equity Ratio: The ratio improved primarily due to the repayment of borrowings during the year and an increase in shareholders equity arising from profits earned during the year.

Operating Profit Margin: The improvement was primarily driven by higher EBITDA resulting from increased revenue from operations and cost optimisation initiatives, including lower Employee and Other Expenses during the year.

Net Profit Margin: The ratio declined primarily due to the exceptional gain, higher other income and favourable tax adjustments relating to merger accounting recognised in the previous year.

Return on Equity: The ratio declined primarily due to the exceptional gain, higher other income and favourable tax adjustments relating to merger accounting recognised in the previous year.