Asian Warehousing Ltd Management Discussions

A. INDUSTRY STRUCTURE AND DEVELOPMENTS:

1. Business Overview

Agricultural warehousing remains the fastest-growing segment within the broader logistics real estate space, reflecting both rising foodgrain output and the widening gap between production growth and storage capacity addition. Over the decades, Indias warehousing industry has evolved from unorganised godown structures into a recognised and institutionalised asset class, supported by scientific storage norms and regulatory oversight under the Warehousing (Development and Regulation) Act, 2007. Agricultural warehousing continues to expand alongside rising foodgrain procurement, and pledge-finance-linked demand from farmers and traders remains a structural driver, even as aggregate national storage capacity keeps pace with requirement and pressure points remain regional rather than nationwide.

2. Indian Economic Overview

Indias real GDP grew 7.6% in FY 2025-26 (per the National Statistics Offices revised estimate), making it the fastest-growing major economy for the year, supported by infrastructure investment, resilient private consumption, and continued policy reform.

The consumer sector showed a balanced mix of growth and cautious optimism through the year, aided by favourable demographics and government support measures. This momentum sustained demand for transportation, warehousing, and e-commerce fulfilment capacity, reinforcing supply chain efficiency and order volumes. Infrastructure programmes, including the Dedicated Freight Corridors, continued to improve cargo movement efficiency and reduce logistics costs. Looking ahead, the RBIs August 2026 policy review projects FY 2026-27 growth at 6.7%, moderating from FY26s exceptional pace but still reflecting sustained underlying momentum.

3. Global Scenario

The global warehousing market was valued at USD 1,155.3 billion in 2025 and is projected to grow to USD 1,240.4 billion in 2026 and USD 2,298.4 billion by 2033, at a CAGR of 9.2% between 2026 and 2033, with North America accounting for the largest regional share at 30.8% of 2025 revenue (Grand View Research). Growth continues to be driven by e-commerce expansion and rising globalisation and supply chain complexity.

Global manufacturing and export flows through 2025 were affected by shifting tariff regimes across major economies, which complicated cost structures and long-term planning for corporates in tariff-exposed sectors. Against this environment, the Reserve Bank of India projected FY 2026 GDP growth of approximately 7.4% for India, with inflation remaining within its target range, positioning India among the fastest-growing major economies for the year. Indias own tariff exposure to key export markets weighed on select labourintensive sectors during the year but also accelerated a shift toward higher-value manufacturing and supply chain localisation, supported by the Production Linked Incentive scheme. Reflecting this relative strength, Indias industrial and warehousing market recorded occupier demand of 6.74 mn sq m (72.5 mn sq ft) across its eight primary markets in 2025, a 29% year-on-year increase and a post-pandemic high.

4. Growth Drivers

Manufacturing has emerged as the principal driver of Indias warehousing demand, accounting for 47% of total transaction volumes in 2025 (34 mn sq ft, up 55% YoY), fuelled by supply chain diversification, the China-plus-one strategy, and Production Linked Incentive schemes. This is reinforced by a sustained shift toward Grade A, institutional-quality stock - now 45% of total inventory across the eight primary markets, up from 41% a year earlier - as occupiers prioritise compliance, automation-readiness and ESG alignment. Secondary markets (including Lucknow, Nagpur, Indore and Vadodara) are expanding in parallel as consumption broadens across Indias hinterland, supported by continued public investment in multimodal infrastructure, freight corridors and integrated logistics parks.

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:

As on 31 March 2026, the Companys total employee strength stood at 8. Given this scale, the Companys approach to human resources is necessarily direct rather than structured through formal large-organisation systems, performance, role changes, and development needs are addressed on an individual basis by management. The Company remains committed to fair treatment, capability-building relevant to each employees role, and retaining a stable, experienced core team, which is particularly important for a warehousing operation where continuity of operational knowledge (client relationships, storage protocols, compliance processes) has a direct bearing on service quality.

3. Opportunities:

Indias agricultural warehousing sector offers substantial headroom for expansion. Total capacity stands at approximately 90 million tonnes, with the Food Corporation of India accounting for around 45% (owned and hired), state agencies and State Warehousing Corporations around 41%, and the Central Warehousing Corporation around 14%; sector capacity is projected to reach approximately 356 million tonnes by FY 202829 at a historical CAGR of around 10%. This growth is underpinned by government programmes including the Agriculture Infrastructure Fund, the Grain Storage Plan targeting 223 million tonnes of foodgrain storage capacity by FY 2026-27, and the Credit Guarantee Scheme for e-NWR based Pledge Financing, which de-risks bank lending against warehouse receipts and sustains demand for WDRA-accredited capacity.

Beyond agri-linked storage, the broader industrial and general warehousing segment presents a parallel opportunity. Continued supply chain diversification under the China-plus-one strategy, together with progress on the India-EU trade agreement, is expected to reinforce Indias position as a manufacturing and distribution hub. Sustained government investment in multimodal infrastructure, freight corridors, and logistics parks continues to improve supply chain efficiency, while the expanding role of third-party logistics operators and a gradual e-commerce recovery are driving rising demand for modern, Grade A warehousing, including deeper penetration into secondary markets (Knight Frank India Warehousing Market Report, 2025).

Together, these trends position the Company to pursue growth both within its established government/institutional client base and, per its stated proposals, in industrial, e-commerce, 3PL, and private-sector agri-warehousing segments as it evaluates expansion opportunities.

4. Threats:

The Companys warehousing operations are exposed to a range of operational, counterparty, and market risks inherent to the sector. Storage of agricultural and other commodities carries inherent risk of loss through unauthorised access, spoilage, or environmental hazards; the Company addresses this through physical security measures, access controls, and insurance coverage, though claims remain subject to policy terms and any lapse could expose the Company to third-party liability.

Structural constraints including limited availability of viable, clear-title land in established warehousing clusters, rising competition for such land from residential development, and evolving regulatory requirements may also affect the pace and cost of future capacity expansion. The Companys operations further depend on contractual arrangements with customers; while disputes have been infrequent, any material dispute could affect customer relationships or operational continuity.

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

The Indian warehousing sector is expected to sustain its growth trajectory into FY 2026-27, supported by continued expansion in key end-use sectors including food, automobiles, FMCG, agriculture, and pharmaceuticals, alongside rising private consumption, sustained government capital expenditure, and improving supply chain efficiencies. Agriculture and allied sectors continued to be a significant contributor to the economy, accounting for approximately 16-18% of Indias Gross Value Added in FY 2025-26 (estimates vary by pricing methodology), with GVA growth moderating to around 3.1% at constant prices for the year per the governments First Advance Estimates. With record foodgrain production, continued emphasis on food security, and the need for efficient storage and distribution infrastructure, the sector is expected to continue generating demand for organised, reliable warehousing capacity.

2. Advanced Warehousing Solutions:

Efficient, technology-enabled warehousing will remain important to strengthening agricultural supply chains and addressing price volatility and post-harvest losses.

The Company has identified expansion as a forward-looking opportunity including additional storage capacity, new locations, and diversification into industrial, e-commerce, 3PL, and private-sector agriwarehousing segments proposed within the scope permitted by its Memorandum of Association. These initiatives remain at the proposal stage and have not yet been quantified in terms of capacity, investment, or timeline; the Company will evaluate them against prevailing market conditions and capital availability before committing to specific execution plans.

3. Strengthening Market Position via Government Tenders

The Company intends to continue pursuing tenders and contracts from government and institutional clients, including the Food Corporation of India, building on the tender secured during the year under review. This is expected to support the Companys positioning as a reliable, compliance-oriented participant in the organised warehousing sector and to contribute to revenue visibility, consistent with the tenure structures typical of government-linked warehousing arrangements.

E. RISK AND CONCERNS:

The warehousing industry, while offering significant growth opportunities, is exposed to certain risks and challenges. These include fluctuations in agricultural output due to climatic variability, regulatory changes, and policy shifts that can affect demand patterns, along with competitive pressure on pricing and margins as WDRA-accredited capacity expands nationally. Rising operational costs, the pace of technology adoption, and potential supply chain disruptions remain additional areas of ongoing attention. To manage these risks, the Company maintains contractual arrangements with its institutional clients, invests in operational infrastructure to improve efficiency, and engages proactively with regulatory bodies on compliance matters. The Company has also identified client and geographic diversification including expansion into industrial, e-commerce, 3PL, and private-sector agri-warehousing segments as a proposed future initiative to reduce reliance on any single client or sector over time, though this remains at an early, unquantified stage as noted under Outlook. Prudent financial management and internal controls remain central to managing liquidity and operational resilience against these risks.

F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has laid down internal controls, policies, and operating procedures commensurate with the nature, size, and complexity of its business objectives. The Company maintains a system of internal controls with defined policies, processes, and operating procedures, and ensures adherence to applicable laws, rules, and statutes.

All transactions are recorded and reported in accordance with applicable Indian Accounting Standards and within the Companys accounting policies. The Company undertakes periodical internal audit through an independent auditor, whose report is submitted to the Audit Committee and Board of Directors for consideration, and the Companys internal control framework is strengthened on an ongoing basis as part of its normal governance process.

G. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

1. Revenue Performance

Revenue from Operations declined to U79.10 lakhs in FY 2025-26 from Rs212.60 lakhs in FY 2024-25. Sale of Goods - Agro Product fell sharply to U.00 lakh from Rs94.17 lakhs, reflecting a near-complete wind-down of trading activity during the year. This was partly offset by growth in Sale of Services - Agro Product, which rose to U74.11 lakhs from U14.68 lakhs, indicating a shift in the Companys revenue mix toward its core service-warehousing operations. Weigh Bridge Income - Agro Product remained broadly stable at Rs3.99 lakhs against Rs3.75 lakhs in the previous year.

2. Trends in Operating Expenditure

Total expenses declined to U64.25 lakhs in FY 2025-26 from Rs232.49 lakhs in FY 2024-25, reflecting the discontinuation of trading activity during the year and lower costs across most expense heads.

Purchase of Stock-in-Trade:

The Company recorded no purchases of stock-in-trade (rice) during FY 2025-26, against Rs58.41 lakhs in FY 2024-25, reflecting discontinuation of the trading activity commenced in the prior year.

Employee Benefits Expense:

Employee costs declined to Rs26.01 lakhs (FY 2024-25: Rs30.75 lakhs).

Finance Costs:

Finance costs declined to Rs69.71 lakhs (FY 2024-25: Rs72.04 lakhs), continuing the reduction trend from borrowing repayment and optimization.

Depreciation:

Depredation was broadly stable at Rs22.96 lakhs (FY 2024-25: Rs22.23 lakhs), in line with the existing asset base. Other Expense:

Other Expenses declined to Rs45.57 lakhs in FY 2025-26 from Rs49.06 lakhs in FY 2024-25, primarily on account of the absence of any fresh Provision for Expected Credit Loss during the year (FY 2024-25: Rs26.40 lakhs), partly offset by a Bad Debts write-off of U7.11 lakhs (FY 2024-25: Nil). The net reduction in credit-loss-related charges was the principal driver of the year-on-year decline, partly offset by higher Administrative and Warehouse & Weigh Bridge expenses reflecting increased operational activity during the year.

H. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT,

INCLUDING NUMBER OF PEOPLE EMPLOYED.

During FY 2025-26, there were no material developments in human resources or industrial relations that adversely affected the Companys operations, and the industrial relations environment remained cordial and stable throughout the year. The Companys employee strength stood at 8 as on March 31, 2026. Given the Companys scale, human resource matters are managed directly by management on an individual basis rather than through formal large-organisation systems, with a continued focus on retaining a stable, experienced core team.

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

EXPLANATIONS THEREFOR:

Sr. No. Particulars	2025-26	2024-25	% of change	Reason for change
1 Debtors Turnover	6.77	4.87	39%	Increase due to faster collection of trade receivables
2 Interest Coverage Ratio	1.24	0.74	67.43%.	Increase in Interest Coverage Ratio is primarily due to increase in earnings before interest and tax, coupled with a decrease in finance costs during the year.
3 Current Ratio	0.03	0.07	-54.07%	Decrease in current ratio is due to both decrease in Current Assets and an increase in Current Liabilities.
4 Debt Equity Ratio	0.27	0.27	0.46%	Not Applicable
5 Operating Profit Margin (%)	47.21%	24.53%	92.46%	Due to a reduction in operating expenses.
6 Net Profit Margin (%)	13.04%	2.82%	362.41%	Due to higher operating profit.

Notes:

1. Inventory Turnover Ratio is Not applicable as the Company does not hold any inventory on its Balance Sheet as of 31st March 2026 and 31st March 2025.

2. Changes in the ratio 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 6.83% for the financial year ended March 31, 2026, which is higher by 5.00% as compared to 1.83% for the financial year ended March 31, 2025, and the same was mainly because of substantial reduction in operational and administrative expenses coupled with improved operational efficiency. The improvement in Return on Net Worth was driven by elimination of Purchase of Stock in Trade, Reduction in Operational and Administrative Expenses, Improved Profitability and Operational Efficiency.

Note: Return on Net Worth has been calculated using Net Profit after tax divided by the average Net Worth (excluding Revaluation Surplus and items of Other Comprehensive Income)

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, disclosure of medium-term and long-term strategy of the entity are as follows:

Medium-term Strategy:

1. Expand & Optimize:

Strengthen our warehousing and logistics portfolio through strategic capacity expansion and operational efficiency improvements to meet growing client demand.

2. Digital-First Solutions:

Enhance client relationships by delivering integrated, technology-enabled solutions that differentiate our offerings and drive operational excellence.

3. Financial Resilience:

Ensure sustainable growth through prudent capital management and structured debt reduction, strengthening our financial stability and shareholder value.

Long-term Strategy:

1. Strategic Real Estate Expansion: Acquiring strategically located land parcels in key logistics hubs to support the development of new facilities and accelerate operational growth, ensuring scalability and market presence in high-demand regions.

2. Service Diversification and Value Creation

Expanding service offerings into high-growth segments such as cold chain logistics and specialized warehousing solutions, enabling us to serve broader market segments and enhance revenue streams and client stickiness.