Asian Warehousing Ltd Management Discussions

A. INDUSTRY STRUCTURE AND DEVELOPMENTS:

1. Business Overview

The Make in India and Atmanirbhar Bharat initiatives have significantly influenced the warehousing sector by promoting domestic manufacturing and reducing reliance on imports. India continues to be one of the fastest-growing economies globally, poised to become a major manufacturing and consumption hub. As economic expansion is inherently linked to the growth of logistics and warehousing, these sectors are expected to play a pivotal role in supporting the nations development.

Government initiatives such as building highways, improving logistics infrastructure, and conferring Infrastructure Status to logistics and warehousing have provided a strong foundation for sectoral growth. The rapid expansion of e-commerce and allied services, the rising needs of a massive consumption-driven market, and the ambition to position India as a global manufacturing hub have further accelerated demand for modern warehousing. Over the decades, Indias warehousing industry has evolved from unorganized godown structures to a well-recognized and institutionalized asset class. According to the UN Trade and Development Report, the global economy remained resilient in 2024 25 despite heightened geopolitical uncertainties and macroeconomic challenges.

2. Indian Economic Overview

In 2024 25, India remained among the fastest growing major economies, supported by infrastructure investments, a robust services sector, and progressive policy reforms. The consumer sector showed a balanced combination of growth and cautious optimism, driven by favourable demographics and supportive government measures. This momentum has driven increased demand for transportation, warehousing, and e-commerce delivery, boosting supply chain efficiency and order volumes. Driven by economic growth, digital transformation, and infrastructure reforms, the warehousing sector has become a cornerstone of Indias logistics ecosystem.

Projects like the Dedicated Freight Corridors (DFCs) are poised to enhance cargo movement efficiency and lower logistics costs.

3. Global Scenario

In early 2025, the sharp escalation in U.S. tariffs and the resulting trade tensions have significantly disrupted the global transport services sector. Costs for vehicles, spare parts, and fuel, often sourced from tariff-affected regions, have risen, placing pressure on freight operators, logistics providers, and public transportation systems.

These higher equipment and maintenance expenses, coupled with limited pricing flexibility in a competitive market, have compressed profit margins across the sector. The global warehousing and storage market has maintained strong growth momentum, expanding from USD 664.16 billion in 2024 to USD 713.06 billion in 2025, and is projected to reach approximately USD 1.15 trillion by 2029 at a compound annual growth rate (CAGR) of around 7.4 percent. North America currently represents the largest regional market, while Asia-Pacific is the fastest-growing region driven by manufacturing expansion, rising consumption, and increasing cross-border trade within the region.

4. Growth Drivers

Indias warehousing industry is undergoing a significant transformation, with tier II and III cities emerging as pivotal growth centers. The year 2024 demonstrated robust demand across both established and emerging markets. Warehousing is no longer about storage. Advanced logistics management tools like automated picking systems, robotics and IoT -enabled tracking are transforming operations. Policies like P M Gati Shakti plan aim to enhance logistics infrastructure, benefiting logistics companies in India and warehouse operators. With its focus on self-reliance, adaptability and alignment with global trends, India is poised for stable economic progress. The RBI projects the Indian economy to grow by 6.5% in FY 2025-26, supported by initiatives such as ‘Make in India, large-scale infrastructure development and continued policy reforms aimed at enhancing growth and competitiveness.

B. OPPORTUNITIES AND THREATS

1. Our Strengths:

We believe in our competitive strengths, including our leadership in providing high-quality services that enable clients to optimise the efficiency of their operations. Our proven commitment and dedication position us to become a leading competitive player in the sector. Demonstrating this capability, the Company has recently secured a significant tender from the Food Corporation of India (FCI) for providing warehousing services, reinforcing our market credibility and operational excellence. Our state-of-the-art warehousing solutions are designed to meet diverse storage needs while prioritizing safety, flexibility, and efficiency. By providing additional storage capacity, we enable businesses to better manage inventory fluctuations, reduce congestion, and optimize loading and unloading processes for smoother logistics operations. With security and safety at the forefront, we ensure the protection of cargo and personnel through advanced facilities and services tailored to meet the unique requirements of a wide range of industries, including the food sector.

2. Human Capital:

Our efforts remain purposefully focused on enhancing capabilities for both managers and employees. We are committed to sound performance, capability development, career advancement, and continuous learning, ensuring that individual aspirations are aligned with organisational goals. The Companys Human

Relations policies are reviewed and updated regularly in line with strategic priorities. As on 31 March 2025, the Companys total employee strength stood at 10. Employees are encouraged to grow within the organisation, with personal and professional development supported through regular training and engagement initiatives. We also actively promote internal talent mobility, providing employees with opportunities to take on new roles and expand their skills, thereby strengthening our talent pipeline.

3. Opportunities:

The warehousing sector in India is poised for sustained growth, supported by strong economic fundamentals, favourable government policies, and evolving market dynamics. The organized private sectors agri-warehousing capacity, estimated at 26.7 million tons in FY 2023 24, is projected to expand to 43.1 million tons by FY 2028 29 (F). This growth trajectory is supported by government programs such as the Pradhan Mantri Fasal Bima Yojana (PMFBY), Agriculture Infrastructure Fund (AIF), and Agriculture Infrastructure and Support Mechanism (AISM), which focus on capacity building, improving access to finance, and enhancing storage infrastructure. Rising agricultural output, increasing demand for organized storage solutions, and growing private sector participation are expected to accelerate this expansion. Furthermore, flagship government initiatives like Atmanirbhar Bharat and Make in India are encouraging the development of world-class warehousing facilities, aligning with Indias aspiration to emerge as a global manufacturing and export hub. In certain regions, wheat yields have recorded remarkable growth of approximately 11 percent between FY 2019 20 and FY 2023 24, far outpacing the national average increase of 3 percent. Rice yields have also risen by about 6 percent over the same period. These improvements reflect the agricultural sectors steady transformation, driven by advanced cultivation techniques, sustainable practices, high-quality inputs, and innovations in crop genetics and precision farming. Significant scope remains to further enhance the productivity of key crops such as fruits, oilseeds, pulses, vegetables, rice, and wheat. This potential can be unlocked through greater adoption of modern agri-technologies, deployment of auxiliary equipment, and the implementation of targeted micro-level policies for individual crops.

4. Threats:

While our warehousing business operates in a dynamic environment, we maintain robust processes to address potential implementation risks, security challenges, and operational threats. These could include unauthorized access, employee-related incidents, or environmental hazards.

To mitigate such risks, we have implemented strong physical security measures, access controls, and surveillance systems designed to protect agricultural commodities stored in our professional warehouses. Although we have not experienced any security breaches to date, we remain vigilant, as any lapse could potentially result in third-party liabilities or litigation. We maintain comprehensive insurance coverage to address such contingencies; however, claims would need to be made in accordance with our policy terms. Our operations are based on agreements with customers, and while disputes are rare, they may arise and could impact customer relationships or investments. By proactively managing these risks, we aim to safeguard our business, financial stability, and operational performance while continuing to deliver secure, reliable storage solutions to our clients. The Company is strategically positioned to benefit from robust growth in the warehousing sector while maintaining strong processes to mitigate operational and security risks. Our focus on efficiency, human capital, and risk management enables us to create sustainable value for all stakeholders.

C. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:

Asian Warehousings operations predominantly relate to a single segment namely, agri-commodity operations. Segment-wise performance together with a discussion on operational and financial performance has been covered in the Directors Report which should be treated as forming part of this Management

Discussion and Analysis Report.

D. OUTLOOK:

1. Warehousing Demand and Economic Linkage

Going forward, the Indian warehousing sector is expected to sustain its strong growth trajectory, driven by continued expansion in key industrial sectors such as food, automobiles, FMCG, agriculture, and pharmaceuticals. Rising private consumption, higher government spending, and improving supply chain efficiencies are also likely to support this momentum, even as the broader economy maintains a moderate pace of growth. The agriculture and allied sectors are projected to remain a vital contributor to the national economy, accounting for nearly 16 percent of Indias GDP in FY 2024 25. With rising production, increasing focus on food security, and the need for efficient storage and distribution, these sectors will continue to generate significant demand for modern, reliable warehousing solutions.

2. Advanced Warehousing Solutions:

Looking ahead, efficient and technology-driven warehousing will play a critical role in strengthening supply chains and addressing challenges such as price volatility and post-harvest losses. Asian Warehousing plans to expand its reach by developing strategically located, professionally managed storage facilities designed to serve diverse stakeholders, including small and marginal farmers, aggregators, and traders.

By integrating advanced technologies such as data-driven inventory management, the Company aims to ensure optimal storage conditions, minimize losses, and improve operational efficiency. In doing so, Asian Warehousing is well-positioned to capitalize on rising demand while supporting broader goals of food security and market stability.

3. Strengthening Market Position via Government Tenders

The Company aims to actively pursue large-scale tenders and long-term contracts from government agencies, including the Food Corporation of India (FCI), as well as other institutional clients. By targeting such opportunities, the Company seeks to enhance its market presence, secure stable revenue streams, and reinforce its positioning as a reliable partner in the organized warehousing sector. Asian Warehousing is committed to expanding its reach and integrating advanced technologies to deliver modern, efficient storage solutions. Going forward, the Company aims to strengthen its market position through strategic partnerships and government-led opportunities.

E. RISK AND CONCERNS:

The warehousing industry, while offering significant growth opportunities, is also exposed to certain risks and challenges. These include fluctuations in agricultural output due to climatic variations, regulatory changes, and policy uncertainties impacting demand patterns. Intense competition, price pressures, and evolving customer expectations may also affect margins and profitability. Further, dependency on timely government contracts and tenders poses concentration risks, while delays in payments from institutional clients may impact liquidity. Rising operational costs, technology adoption challenges, and potential supply chain disruptions remain additional areas of concern. To mitigate these risks, the Company focuses on diversifying its client base across sectors, maintaining long-term contracts with both government and private players, and investing in technology to strengthen operational efficiency. Strategic location planning, adoption of modern warehousing practices, and proactive engagement with regulatory bodies help in managing compliance and operational risks. Additionally, prudent financial management and robust internal controls ensure liquidity and resilience against market fluctuations.

F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has effectively and efficiently laid down policies, guidelines and procedures keeping in mind the nature, size and complexity of Companys business objectives. The Company maintains proper and adequate system of internal controls with well-defined policies, systems, process guidelines and operating procedures. The Company positively ensures strict adherence to various procedures, laws, rules and statutes. All transactions are recorded and reported in accordance with the applicable Indian Accounting Standards and within the terms of accounting policies.

The Company ensures the periodical Internal Audit by an independent auditor whose report is submitted to the Audit Committee and Board of Directors for consideration.

G. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

1. Revenue Performance

During the FY 2024 25, the Company recorded Revenue from Operations of 212.60 lakhs, compared to 163.26 lakhs in FY 2023 24, reflecting a growth of about 30.24%. This increase was mainly attributable to the introduction of Agro Product trading ( 94.17 lakhs) in the current year, which contributed a new revenue stream.

However, the Service Income from Agro Products declined to 114.68 lakhs in FY 2024 25 as against 156.74 lakhs in the previous year, due to reduced demand and lower service utilization in certain client segments. Similarly, the Weigh Bridge Income declined to 3.76 lakhs in FY 2024 25 as against 6.52 lakhs in FY 2023 24, primarily due to lower transaction volumes handled during the year.

2. Trends in Operating Expenditure

Total expenses increased to 232.49 lakhs in FY 2024 25 as compared to 161.62 lakhs in FY 2023 24, primarily on account of higher business activity and related operational outflows.:

Purchase of Stock-in-Trade:

During the year, the Company recorded purchases of rice amounting to 58.41 lakhs (Previous Year: Nil), reflecting the commencement of trading activity in this segment.

Employee Benefits Expense:

Employee costs increased to 30.75 lakhs (FY 2023 24: 19.91 lakhs), primarily due to increments and manpower additions in line with increased operational requirements.

Finance Costs:

Finance costs declined to 72.04 lakhs (FY 2023 24: 90.83 lakhs), mainly on account of repayment and optimization of certain borrowings, coupled with lower bank charges.

Depreciation:

The expense remained stable at 22.23 lakhs (FY 2023 24: 22.17 lakhs), in line with the existing asset base.

Other Expense:

Other expenses rose sharply to 49.06 lakhs (FY 2023 24: 28.71 lakhs). The increase was primarily due to higher provisioning for doubtful debts ( 26.40 lakhs vs. 4.00 lakhs in the previous year), along with higher electricity, transportation, and handling expenses.

As a result, the Company recorded a Loss Before Tax of 1,883.96 lakhs as against a Profit of 890.01 lakhs in FY 2023 24. However, due to deferred tax credit, the Net Profit for FY 2024 25 stood at 598.67 lakhs, compared to 1,460.51 lakhs in FY 2023 24. Consequently, the Earnings per Share declined to 0.17 in FY 2024 25 from 0.42 in the previous year.

With an expanded revenue base and reduced finance costs, the Company is strategically positioned to improve profitability in the coming years through enhanced operational efficiencies, cost rationalization, and adoption of advanced warehousing solutions.

H. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED.

During FY 2024 25, there were no material developments in human resources or industrial relations that adversely affected the Companys operations. The industrial relations environment remained cordial and stable throughout the year. The Companys employee strength increased from 7 as on 31^st March 2024 to 10 as on 31^st March 2025. The Company continues to invest in skill development, training, and employee engagement initiatives to nurture talent and align individual aspirations with organisational goals.

I. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR:

Sr. No.	Particulars	2024-25	2023-24	% of change	Reason for change
1	Debtors Turnover	4.87	2.87	69.7	Higher revenue and lower trade receivables improved collection efficiency.
2	Interest Coverage Ratio	0.74	1.10	32.73	The Interest Coverage Ratio declined mainly due to a sharp fall in EBIT despite a marginal reduction in finance costs.
3	Current Ratio	0.07	0.21	-68.81	Decrease in current ratio is due to increase in current liability and increase in current assets.
4	Debt Equity Ratio	0.27	0.29	-7.01	Not Applicable
5	Operating Profit Margin (%)	41.75	69.99	-40.35	Due to a substantial increase in operating expenses
6	Net Profit Margin (%)	2.82	8.95	68.5	Net profit margin declined due to higher purchases, operating expenses, and finance costs

Note:

Changes in the ratios are considered significant if there is a 25% or more variation compared to the previous year.

J. DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF:

Return on Net Worth stood at 1.37% for the financial year ended 31st March 2025, which is lower by 3.11% as compared to 4.48% for the financial year ended 31^st March 2024, and the same was mainly because of an increase in operational and administrative expenses.

K. DISCLOSURE OF ACCOUNTING TREATMENT:

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS), as notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. The Company confirms that no accounting treatment other than those prescribed under the applicable Ind AS has been adopted in the preparation of these financial statements.

L. MEDIUM-TERM AND LONG-TERM STRATEGY

In line with SEBI circular SEBI/HO/CFD/PoD2/CIR/P/0155 dated December 28, 2023, disclosure of medium-term and long-term strategy of the entity are as follows:

Medium-term Strategy:

• Strengthening the warehousing and logistics portfolio through capacity expansion and efficiency enhancement.

• Improving client relationships by offering integrated and technology enabled solutions.

• Capital management including structured debt repayment plans to ensure financial stability.

Long-term Strategy:

• Strategic acquisition of land parcels in key locations to support new facilities and operational growth.

• Pursuing diversification into value-added services such as cold chain and specialised warehousing.

• Drive sustained growth and profitability while maintaining robust governance and risk management practices.