Balmer Lawrie & Company Ltd Management Discussions

(Forming Part of the Boards Report for the FY 2024-25)

Pursuant to the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations) and Guidelines on Corporate Governance for Central Public Sector Enterprises, 2010 issued by the Department of Public Enterprises, this Report is an endeavor of the Board of Directors to:

i. make an analysis of the financial condition and results of operations of the Company,

ii. provide an overview of the business environment and performance of each of the Strategic Business Units (SBUs) of the Company,

iii. analyse the underlying factors, which had acted upon or had impacted the performance of the Company during the FY 2024-25,

iv. share the future outlook of the Company. As we cross the halfway point of 2025, global trade is facing intensifying headwinds. A decade-long rise in trade restrictions has been supercharged by sharp tariff hikes and retaliatory measures from major economies over the past three months.

Although some of these measures have since been rolled back and fresh negotiations are underway, businesses continue to grapple with policy uncertainty, stretched supply chains and the ever-present threat of new barriers. Economies deeply integrated into global value chains or heavily reliant on the United States are poised to experience weaker trade growth. 2024 was a year of elections. Three big democracies went in for elections: India, America and Indonesia. Europe faced both political and economic uncertainties. Europes biggest economic engine, Germany, experienced economic contraction for two successive years. In general, Europe is facing competitiveness pressures amidst much higher energy costs caused, in part, by the transition towards renewable energy. Recent strength in the US dollar and rethinking in the Federal Reserve about the path of policy rates in America have caused emerging market currencies to weaken. Fiscal strains and low real rates relative to history have led to rapid erosion of value in some currencies compared to others. Borrowing costs for sovereigns are also rising as financial markets re-evaluate the outlook for inflation, policy rates and fiscal prudence.

The disruptions in the Red Sea that began in November, 2023 have forced changes in trade routes, causing higher shipping costs and longer delivery times. This is particularly true for trade between Asia and Europe, as 40% of this trade passes through the Red Sea region. Similar conflicts in the Hormuz Strait, which channels 21% of global petroleum liquid consumption, have disrupted energy trade and increased prices. Additionally, climate change is enhancing the uncertainties. Like the drought in the Panama Canal jeopardised international trade, affecting approximately 5% of global maritime trade volumes that transit through it. These conditions are creating uncertainty, leading to a slowdown in international trade, reshaping the contours of trade in terms of a rise in protectionist trade policies and shifting global supply chains. India is aiming to attain steady and sustain the growth momentum that the economy has experienced post-Covid. However, the countrys reliance on global trade poses challenges, especially as global export growth slows.

This means domestic growth levers will be relatively more important than external ones in the coming years. However, the Country faces limitations in producing critical goods at the scale and quality required to serve the infrastructure and investment needs of an aspiring economy. Another priority is climate change and energy transition. In this scenario, the role of Energy Security and Energy Affordability in enhancing and maintaining competitiveness is vital. It entails that the country shall be required to forge its own path to energy transition and diversify away from fossil fuels and switch to electric mobility. The outlook on the state of economy of the Country can be summed up to mention that there are many upsides owing to domestic investment, output growth and moderation of inflation in FY 2025-26. There are equally strong, prominently extraneous, downsides too. Nonetheless, the fundamentals of the economy appear robust and the GDP growth in FY 2025-26 is projected between 6.3% and 6.8%.

Indias exports saw significant growth and expansion into diverse markets despite global challenges. The country has added many new products to its export basket. India has not just carved out new markets but has become the market leader in exports of several of the new product categories. There have been a number of diverse markets, where exports happened in the FY 2024-25 from a zero base of FY 2023-24. Services sector exports have demonstrated resilience, while merchandise exports have witnessed moderation in recent months. They grew at 11.6% in the first nine months of FY 2024-25 amidst unfavourable geopolitical conditions. ‘Travel and ‘Transport services represent areas where India holds a relatively smaller share in global exports, at 2.1 % and 2.2%, respectively, facing competition from other worldwide tourism and logistics hubs.

The e-commerce industry in India has experienced swift expansion over the past few years, driven by various elements such as the rise of technology-powered advancements like online payments, localised delivery services, data-driven interactions with customers, and digital marketing. Factors driving Indias e-commerce exports include Government initiatives, such as Make in India and Aatmanirbhar Bharat, enhanced support and focus on e-commerce exports, thereby paving the way for more domestic sellers going global. Recognising the relevance of e-commerce exports, the Foreign Trade Policy (FTP) 2023 has laid down provisions for fostering cross-border digital trade and promoting e-commerce and other emerging export channels. Further, the Central Governments E-Commerce Export Hub initiative aims to revolutionise Indias cross-border e-commerce. These hubs connect SMEs, artisans and One District One Product producers to global markets, boosting logistics efficiency and economic inclusion in Tier 2 and Tier 3 cities.

In furtherance of its ease of doing business initiatives, the Government is enhancing logistics efficiency to supplement Indias manufacturing and exporting capabilities. The development of logistics hubs, investments in infrastructure and policy reforms to improve supply chain efficiency are measures in this direction. Such efforts aim to lower costs for Indian businesses, making exports more competitive and enabling quicker and smoother movement of goods, domestically and internationally. This also aligns with the National Logistics Policy of the Government. The recent developments in railways like increase in the number of Gati Shakti Cargo Terminals, identification of major economic corridors, commissioning of Dedicated Freight Corridors are also noteworthy.

Port capacity had improved significantly in FY 2024-25, leading to improvements in operational efficiency and reduction in average container turnaround time. On waterway transport connectivity, the Sagarmala programme is leading the port modernisation and port-led industrialisation. This is supported by advancements in port connectivity, coastal community development, coastal shipping and inland water transport.

The Indian lubricants and greases market is expected to experience strong growth in the coming years, driven by increasing industrialisation, automotive production and infrastructure development. While the automotive sector currently dominates, industrial lubricants are poised for significant growth, particularly in sectors like construction, mining and power generation. Specialised lubricants for electric vehicles and emerging technologies are also expected to see increased demand.

Onthetourisminfrastructurefront,theGovernment has introduced several initiatives to promote domestic tourism. Pilgrimage Rejuvenation and Spiritual Augmentation Drive (PRASHAD) aims to develop tourism infrastructure at identified pilgrimage destinations and heritage cities. Another major initiative of the Government to promote domestic tourism is Swadesh Darshan, which is aimed at the integrated development of tourism destinations, including theme-based tourist circuits. 40 projects across 23 states have been approved for interest-free loans for 50 years for an amount of Rs.3,295.8 Crore as special assistance to states for capital investment.

To conclude, global geopolitical headwinds including prolonged conflicts in Eastern Europe and West Asia, disruptions in key maritime routes like the Red Sea and trade policy shifts such as US tariff revisions are reshaping supply chains and impacting freight costs, transit times and global travel sentiment. These dynamics pose challenges to both the logistics and tourism industries, directly influencing segments of Balmer Lawries portfolio such as freight forwarding, project logistics and travel services. At the same time, Indias strong policy thrust on Make in India and export-led growth is creating structural opportunities across logistics, manufacturing and tourism. Balmer Lawries strategic focus on expanding sustainable logistics through railway freight movement, strengthening 3PL capabilities to cater to e-commerce growth and enhancing freight forwarding solutions positions it to capture the trade flow shifts. In manufacturing, the uptick in the automobile and industrial sectors, supported by Atmanirbhar Bharat, is spurring demand for the Companys greases and lubricants. The growth in the chemical sector, rising demand for fruit pulp and growing export opportunities are expected to be key drivers for our industrial packaging business. Despite global headwinds affecting tourism in certain countries and recent aviation safety disruptions such as the Air India flight crash, the tourism market has continued to witness strong demand, with Balmer Lawries Travel & Vacations business taking advantage of this growth trajectory, which is expected to sustain in the coming years. Leveraging its diversified business portfolio, Balmer Lawrie is poised to play a pivotal role in driving Indias journey towards a $5 trillion economy and realising the vision of Viksit Bharat by 2047.

1. INDUSTRIAL PACKAGING (IP)

Industry structure and developments:

The Packaging industry in India, valued at 80 Billion USD is broadly segmented into industrial and consumer packaging, consisting of Rigid and Flexible sub-segments. Rigid industrial packaging is further sub-segmented based on packing size, type and material of construction. Balmer Lawrie specialises in production of metal drums and holds market leadership in production of 210L units of Mild Steel (MS) Drums in India.

The packaging industry, growing at 7% CAGR is extremely fragmented with the MS drums segment itself having presence of 75 players across the country. The market is characterised by high levels of competition and supply glut due to capacity outstripping market demand. Volatility in steel prices is a key risk parameter for the industry, affecting profitability across the market. BalmerLawrie(BL)maintainsitsmarketleadership through technological upgradations, unmatched quality and robust supply chain management across its six manufacturing plants at strategic locations. BL offers a wide range of high quality products including Open-Head, Tight-Head, Plain, Lacquered, Composite, Galvanized, Tall, Necked-In and Conical Drums catering to diverse industry segments viz. Lubricants, Additives, Chemicals, Agrochemicals, Transformer Oils, Food and Fruit Pulp.

BLs Industrial Packaging is acclaimed for superior product quality, high reliability in supplies, modern manufacturing systems and above all, unmatched customer-centric experienced packaging professionals. It enjoys a high brand value, large, diverse and growing customer base across pan-India and Exports Markets. Its focus on continuous improvement, Quality Assurance, Innovation and sharp focus on Sustainability & HSE helps in having edge over competition. Balmer Lawrie aims to maintain its segment leadership and achieve sustained growth over the long term through diversification of product portfolio, expansion of client base and exploration of export potential.

Opportunities and Threats: Opportunities:

The Industrial Packaging SBU is expanding its horizons through the introduction of new products, strengthening and diversifying its portfolio to meet evolving market needs. The Company is actively accessing new markets via exports, while capitalising on the growing chemicals segment in India. With the commissioning of the new plant at Vadodara, it is tapping into a fresh customer base in Gujarat and through the modernisation of its Chittoor plant in the Southern region, it is enhancing capabilities and adding new product lines to drive regional growth

Threats:

The MS drums segment continues to face challenges from high input costs of key raw materials such as steel, driving prices higher compared to HDPE drums. The market is further pressured by the growing adoption of alternate packaging solutions such as Intermediate Buk Containers (IBCs), collapsible bins, HDPE and reconditioned drums. Competition from smaller players with locational advantages, coupled with the emergence of new barrel plants in the Western and Southern regions despite an existing overcapacity of nearly 100%, is intensifying market pressures.

Segment-wise or product-wise performance:

SBU: IP has been showing consistent growth in volumes, turnover and profits. SBU: IP had registered growth in volumes during FY 2024-25 i.e. 5.3% YOY, revenue growth of about 2% (YOY). Segments like Agro Chemicals, Food and Chemicals witnessed a substantial growth in volumes of 77%, 48% and 15%, respectively, while other segments like lubes and additives have shown moderate growth. In terms of product, exponential growth is witnessed in value added barrels such as Composite barrels (93%), GI barrels (27 %), Epoxy coated barrels and Necked in barrels (17%) YOY.

Outlook:

Amid ongoing geopolitical tensions such as the Ukraine and Gaza conflicts and Chinese dumping, steel prices have been volatile; however, Government measures to curb inflation and the imposition of a 12% anti-dumping duty on steel imports have begun to stabilise prices. With industry growth projected at a CAGR of 6% and GDP expected to expand by 6.5% in FY 2025-26, SBU: IP is poised to maintain its growth trajectory. Key drivers will include demand from the chemicals, food, transformer oils and lubricants segments, alongside penetration in export market. The availability of the full product basket — including GI, composite and neck-in barrels — across all regions will further strengthen market presence. The SBU also has plans of exploring alternate packaging solutions to diversify its product base.

Risks and concerns:

Geo-political developments around the world like the Ukraine war, Israel war, Red Sea issues, etc. may pose challenges as an external environment. Large number of unorganised players with low overheads, increasing presence of substitute products, low entry barriers, switching over to HDPE drums in view of lowering prices, etc. continue to pose strong competition for SBU:IP.

Internal control systems and their adequacy:

SBU: IP is governed by performance budget system and internal control measures to monitor performance against targets / norms. BIS certification is available for all the plants of SBU: IP. All the six plants under SBU: IP are certified for ISO 9001:2015 and ISO 14001:2015 and OHSAS 45001:2018. Additional controls are maintained through Internal Audit, Vigilance Inspection, etc.

Discussion on financial performance with respect to operational performance:

SBU: IP improved its overall efficiency through continuous Operational Excellence across various manufacturing units.

Material developments in Human Resources / Industrial Relations front, including number of people employed:

SBU: IP continues to enjoy cordial relationship with employees at all its units. As on 31st March, 2025, SBU: IP had a total of 171 employees.

2. GREASES & LUBRICANTS (G&L)

Industry structure and developments:

The Lubricants Market in India is the 3rd largest in the world, with an annual volume of around

3 Billion litres and market size of approx. 6 - 7 Billion USD. The market is expected to grow at a CAGR of 4.5-5% till 2030, with the automotive segment, which accounts for approximately 60% of market size, growing at a CAGR of 6%. The Industrial applications segment which makes up 40% of lubricants market in India is expected to grow at a CAGR of around 3%. The market is moderately consolidated with top 5 players contributing over 65% of market size. The leading PSU – Oil Marketing Companies (OMCs) i.e. IOCL, HPCL and BPCL enjoy a dominant position in the market due to vertical integration, aggressive pricing and strong distribution network while private players have established their market presence through aggressive marketing campaigns, Original Equipment Manufacturers (OEM) tie-ups and specialised product lines. The lubricants industry is expected to maintain its sustained growth rate over the medium and long term due to automotive and industrial expansion in the Indian economy. Innovation and sustainability may emerge as key points of differentiation with bio-synthetics and EV-specific products offering new avenues of growth. The SBU: G&L serves both the automotive and industrial segments through a dual approach -channel sales and direct supply to B2B institutions while also undertaking contract manufacturing for OEMs. Operations are supported by three state-of-the-art manufacturing facilities located in Kolkata, Silvassa and Chennai. Backed by best-in-class applications research laboratory, a strong commitment to R&D, extensive production expertise and a positive brand reputation among its clientele, Balmer Lawrie is well-positioned to expand its market presence and establish itself as a leading player in the industry.

Opportunities and Threats: Opportunities:

With Indias greases and lubricants market among the fastest growing globally, SBU: G&L is well-positioned to expand its share, leveraging its strong brand equity and deep presence in core sectors such as Steel, Railways, Defence, Automobiles and Mining. The dual focus on industrial sales — catering to sectors like steel, mining and manufacturing — and channel sales in the automotive segment offers significant growth potential through wider distribution and customised solutions. Industry shifts towards electric mobility, stricter emission norms and advanced industrial machinery further open avenues for new product development, including eco-friendly and high-performance lubricants. Supported by state-of-the-art facilities, robust R&D and long-standing customer trust, Balmer Lawrie can capitalise on these opportunities to strengthen its presence in both industrial and automotive domains.

Threats:

SBU: G&L faces competitive pressures from rivals with higher branding spends and stronger retail visibility, while constraints in marketing reach, OEM approvals and technical tie-ups limit market penetration. Aggressive pricing strategies by PSU Oil Marketing Companies further intensify competition, squeezing margins. Additionally, geopolitical tensions pose risks to base oil supply security, leading to potential volatility in input costs and pricing.

Segment wise performance:

SBU: G&L operates across three segments — Channel Sales (Automotive & Industrial), Direct B2B & Institutional (Railways, Defence, STUs), and Contract Manufacturing. Though there was a meagre growth of 1% in Channel Sales in line with the industry trends, the industrial segment faced pressure from competitive pricing and higher costs in lithium-based greases. The overall G&L topline declined by 5.8%, while the bottomline fell by approx. 15.8% with respect to last year, primarily due to base oil prices fluctuations and stiff competition thus, impacting the revenue and margin of G&L.

Outlook:

The outlook for SBU: G&L remains optimistic, with focus on expansion in Diesel Engine Oils, Motorcycle Oils and penetration in the tractor segment, alongside the launch of new products and development of non-lithium grease formulations. The business aims to gain market share in high-margin products, scaling up metal working fluids and deepening penetration in sectors such as Infrastructure, Mining, Railways, and Defence. Strategic MOUs with reputed corporates, expansion of the channel sales network and scaling up contract manufacturing will support volume growth and capacity utilisation.

As a part of marketing and branding outreach, the SBU shall be enhancing market engagement through events, technical support, trials, loyalty programs and digital promotions along with investments in brand building, distributor management systems, sustainability and operational excellence to further strengthen its competitive position.

Risks and concerns:

SBU: G&L faces challenges from uncertain base oil availability, the threat of low-cost substitute products and low entry barriers in the lubricants market that intensify competition. A comparatively lower spend on branding, along with limited OEM tie-ups and certifications, further constrains competitive positioning of SBU: G&L which the SBU is addressing to strengthen its market presence and drive growth.

Internal control systems and their adequacy:

SBU: G&L has adequate internal control systems commensurate with its business operations. SBU: G&L also has a detailed Management Information and Control System to monitor performance against budgets / targets. All units of SBU: G&L are certified for quality system management and periodic / re-certification audits were conducted at all units for IMS 2018 (ISO 9001-2015, ISO 14001:2015 and ISO 45001:2018). The Silvassa unit is additionally certified to IATF 16949:2016 Quality Management System specifically for the automotive sector. Regular audits have been conducted during the year for assessment of internal control systems such as HSE Audit, Energy Audit, Internal Process Audit, Internal Financial Controls Audit and Legal Compliance Audit.

Discussion on financial performance with respect to operational performance:

SBU: G&L accounted a marginal 2% overall volume growth during the year. Scarcity of some base-oils, a critical input for many major finished good grades was a limiting factor in achieving a higher sales volume. During FY 2024-25, SBU: G&L remained focussed on consolidating its position in the market while enhancing operational excellence. In the backdrop of degrowth in industrial segment sale and strong headwinds on pricing and cost-competitiveness across all segments, SBU: G&L has achieved a considerable profit for the year.

Material developments in Human Resources / Industrial Relations front, including number of people employed:

SBU: G&L continues to enjoy cordial relationship with employees at all its units. SBU: G&L had total 172 employees as on 31st March, 2025.

3. CHEMICALS

Industry structure and developments:

The leather industry is one of the key manufacturing industries in India, ranking among the top 5 global producers of leather and leather goods. The sector assumes strategic importance in the economy as it provides employment to 4.5 million people and contributes to exports of around 5 Billion USD. The industry is expected to continue on its path of sustainable growth with several Government schemes such as Indian Footwear and Leather Development Programme, PLI Schemes and Make in India programme, providing necessary support and incentives to augment industrial production. The Key segments of the market are Beam House Chemicals (Wetting Agents, Degreasers, Liming Agents), Tanning Agents (Chromium Salts, Vegetable Tannins, Syntans), Post-Tanning Chemicals (Dyes, Fat Liquors, Re-tanning Agents) and Finishing Chemicals (Binders, Pigments, Topcoats, Waterproofing Agents).

Global chemical companies dominate the market and hold significant market share while domestic manufacturers have established their presence in specific product lines and selective segments. Balmer Lawrie is a market leader in Fat Liquors and has also acquired significant market share in Syntans. Balmer Lawrie has introduced its new offerings in Beam House and Finishing chemicals segments and plans to expand its market share through diversification of product line.

There is immense potential in the leather chemicals industry with process automation, pollution prevention, eco-friendly chemicals and high-end products catering to export markets being the key drivers of growth.

Equipped with a diversified product line and a network of ‘Technical Service Centres in major leather manufacturing clusters, Balmer Lawrie is well poised to enhance its brand image and market position in the coming years.

SBU: Chemicals has been awarded with Gold category manufacturing unit by International Research Institute for Manufacturing.

Opportunities and Threats: Opportunities:

SBU: Chemicals has enough opportunities to grow in other segments like Finishing and Beam House. New chemicals introduced in Beam House segments. SBU: Chemicals also launched a new range of finishing chemicals with modern manufacturing facility.

The SBU has well equipped ‘Technical Service Centers in all the major leather manufacturing clusters in India and renders high quality technical service to the tanneries. It has developed eco-friendly, metal free tanning process with Glutaraldehyde, which has gained popularity in the market. Well-known brand image, strong technical service team and with increased product basket the SBU has got many opportunities to improve the business in coming years.

Threats:

SBU: Chemicals is heavily dependent on Indias leather industry, which is largely unorganised and dominated by MSMEs. These family-run tanneries have limited capacity to mobilise funds through private placement or public issues, constraining their growth and in turn, causing stagnancy for SBU: Chemicals. Both the SBU and these unorganised players face stringent and evolving environmental norms that require significant investment in compliance, infrastructure and technology — a challenge for low-capital businesses. Additionally, the SBU contends with strong competition from MNCs and Italian companies with greater production scale, competitive pricing and cost advantages. The limited global presence of Indian brands in the leather fashion market further restricts the industrys growth potential in India. Emerging trends such as the PETA-led movement towards vegan, synthetic and artificial leather are reshaping the leather industry, which in turn impacts the growth prospects of SBU: Chemicals.

Segment-wise or product-wise performance:

In spite of the low demand of leather upholstery/ footwear due to Russia-Ukraine war, Red Sea issue, Global climate change issue and sustainable development steps taken by developed countries, SBU: Chemicals was able to maintain more or less both volume and turnover by better margins through cost reduction efforts and manpower optimisation. In FY 2024–25, the majority segment of SBU: Chemicals, Synthetic Fat Liquor, recorded a growth of 15% in volume and 13% in topline over the previous year. Other product segments, such as Syntan and Beam House, also registered moderate growth in both volume and turnover, contributing to the overall positive performance.

Outlook:

The path forward for SBU: Chemicals focuses on driving sales growth through existing dealers while expanding the distribution network by appointing new dealers across all three regions. The SBU will strengthen its portfolio by emphasising new product lines such as Beam House and Finishing Chemicals and will actively target export markets including China, East Africa, Korea and Bangladesh to diversify revenue streams and enhance market presence.

Risks and concerns:

Increasing usage of non-leather products and environmental norms which may lead to closure of small tanneries due to increased operational costs.

Internal control systems and their adequacy:

SBU: Chemicals leverages SAP for effective control over raw materials and overheads. Its manufacturing unit at Manali and Chennai, are certified under the Integrated Management System, comprising ISO 9001:2015 ISO 14001:2015 and ISO 45001:2018, by M/s. International Certification Services Private Limited, Mumbai. SBU: Chemicals has also got Zero Discharge Hazardous Certification Level 3.1, being an international certification for usage of chemicals.

Discussion on financial performance with respect to operational performance:

SBU: Chemicals has consistently delivered profits through OPEX initiatives, process improvements, manpower restructuring and proactive sales and marketing efforts, achieving an all-time record profit in FY 2024-25. The SBU also recorded a steady year-on-year growth of 7.8%.

Material developments in Human Resources / Industrial Relations front, including number of people employed:

Training & development programs were continuously organized to improve the skill of employees with internal and external faculties. SBU: Chemicals has maintained cordial relations with all the stakeholders and as on 31st March, 2025, it had 82 employees.

4. LOGISTICS

Industry structure & developments:

Indias logistics market, valued at USD 228 billion in FY 2024-25, is rapidly evolving, driven by e-commerce growth, infrastructure expansion and tech adoption growing at 6.5% CAGR to reach USD 429 billion by 2033. Policy initiatives like the National Logistics Policy and Gati Shakti aims at accelerating efficiency and integration while reducing the logistics cost from current 12-13% to 7-8% of the GDP aligning with global benchmarks. Government initiatives such as the Dedicated Freight Corridor (DFC), Unified Logistics Platform (ULIP), Logistics Efficiency Enhancement Program (LEEP) and the e-waybill system are pivotal in driving integration, transparency and speed across the logistics value chain. It also provides livelihoods for over 22 million people and is expected to add another 10 million jobs by 2027, highlighting its significance in employment generation. The booming e-commerce sector, projected to reach USD 200 billion, is fueling demand for 3PL logistics, advanced warehousing and tech-enabled distribution infrastructure in India. In the drive towards sustainability, Indian Railways has introduced Special Freight Train Operations (SFTO) to attract private investment in rail movement , allowing operators to run customised rakes for containerised, bulk, or specialised cargo. Currently, a few SFTOs like Adani Logistics, JSW Infrastructure and CONCOR (in collaboration) are operational, marking a shift towards greater private participation in freight movement and green logistics. All key activities related to clearance, warehousing, temporary storage, re-export and transhipment are undertaken at Container Freight Stations (CFS). In FY 2024-25, container handling at Indias top 12 ports grew by 11%, matching the previous years 12% growth, driven by continued EXIM recovery post-COVID. The ports of JNPT, Kolkata and Chennai, which handle 58% of Indias container traffic, saw a 14% rise in imports, but cargo volumes routed to CFSs grew only 1% due to a shift towards Inland Container Depots (ICDs).

Balmer Lawrie Logistics business operates under two distinct SBUs -- SBU: Logistics Infrastructure and SBU: Logistics Services. The Logistics Infrastructure SBU comprises of CFSs located at Mumbai, Kolkata and Chennai, Warehousing & Distribution (W&D) in Kolkata and Coimbatore along with a warehousing facility in Andhra Meditech Zone (AMTZ) at Visakhapatnam. The SBU is also operating a Multi Modal Logistics Park named Visakhapatnam Port Logistics Park Limited. (VPLPL) developed jointly by Visakhapatnam Port Authority and Balmer Lawrie, primarily handling EXIM and domestic trade through its state-of-the-art Warehouses, CFS, temperature controlled warehouse, railway siding and open storage yard. The SBU successfully expanded its warehousing facilities at CFS - Kolkata and CFS - Chennai during the last financial year. Additionally, it completed the expansion of the open yard area at CFS Chennai to meet the growing export demand. The SBU is now exploring opportunities to diversify in Free Trade Warehousing Zone (FTWZ) near JNPT, Mumbai – a niche warehousing segment for handling / storage of EXIM goods within a special economic zone enabling cost and tax advantages to the customers. SBU: Logistics Services with a strong network of associates and partners offers end-to-end logistics solution including air freight, sea freight, transportation, charter movement, CHA services, project logistics and express movement services with offices located across pan-India. The SBU is diversifying by expanding its services by Third Party Logistics (3PL) in Eastern India and freight train operations to become an Integrated Logistics solution provider.

Logistics Infrastructure (LI) Opportunities and Threats: Opportunities:

Indias growing trade volumes, coupled with a 60% containerisation level offer substantial growth potential. To tap this, the Government is driving initiatives such as Sagarmala for port modernisation and connectivity, the Major Port Authorities Act for greater port autonomy and flexibility, PPPs to attract private investment and digital platforms like Port Community System (PCS 1x) and Logistics Data Bank (LDB) to streamline cargo handling. These measures are boosting capacity, efficiency and turnaround times at ports, creating strong opportunities for SBU: Logistics Infrastructure, given its close linkage to EXIM trade.

Threats:

Despite 11% growth in overall port container traffic and 14% growth at ports where the SBU operates, the CFS market expanded by only 1% due to cargo volume shifts to ICDs and increased DPD clearances. The presence of multiple players has intensified competition, triggering price wars. Geopolitical tensions like Russia Ukraine war, Israel Hamas war, etc., changes in bilaterial trade policies and sanctions have disrupted supply chains, causing container shortages and freight rate volatility. Further, inadequate infrastructure, port congestion, weak hinterland connectivity and security risks such as theft and smuggling continue to challenge the containerised segment.

Segment-wise or product-wise performance:

Despite muted growth in the CFS segment which contributes to the maximum percentage of SBU: LI topline and bottomline, the SBU was able to register a 10% growth in revenue with respect to last year. Due to high competition, the margins of the SBU were adversely affected despite growth in volumes and revenue. In FY 2024–25, the CFS segment of SBU: LI witnessed a growth of import volume by 22% and export volume by 15% YOY. The Warehousing & Distribution segment of the SBU recorded a robust 48% increase over FY 2023–24. The Logistics Infrastructure (LI) SBU won Gold for Commitment to Environmental Excellence and Silver for Managing Risks at the 7th Annual HSE Strategy Summit & Awards 2024. It was also named "Best Miniratna PSU" at the 11th National Awards for Excellence and received the "Golden Bird Award" for Leading Growing Infrastructure Company of the Year.

Outlook:

Despite challenges, the future for CFS operators in India is promising, driven by policy support, rising EXIM trade and growing demand for value-added logistics services. With container traffic expected to double over the next decade, CFSs will play a vital role in handling and storing cargo near ports, especially those managing high-volume mixed cargo.

The SBU is actively exploring diversification opportunities in ICDs, Multi Modal Logistics Hubs (MMLHs) and Gati Shakti Container Terminals (GCTs) across key strategic locations. Rail-linked facilities at Kolkata and Visakhapatnam enhance cost-effective and efficient logistics solutions for EXIM trade, with multimodal connectivity to both Eastern and Western ports. With pan-India service coverage, SBU: LI has positioned itself as a trusted partner for importers, exporters, shipping lines, CHAs and freight forwarders. Synergies with other logistics verticals such as Logistics Services and Cold Chain along with national footprint and experienced workforce has further strengthened its capability to offer integrated end-to-end logistics solutions.

Risks and concerns:

Policy reforms and the growing share of DPD customers have increased competition in the CFS sector, with both new and existing players vying for limited volumes. Reduced container dwell times have further compressed margins, making differentiation through service quality and value-added offerings essential. Operational challenges such as port congestion and inadequate last-mile connectivity continue to impact efficiency. Security risks, including cargo theft and smuggling, demand robust preventive measures and adherence to international standards. Additionally, increasing regulatory focus on sustainability and environmental compliance may require substantial investment in green technologies, adding to cost pressures for operators.

Internal control systems and their adequacy:

SBU: LI operates on its new Logstar software for operational control, while financials are managed in SAP. Periodic internal and external audits are conducted, supported by a robust performance budgetary control system. All three units hold ISO 9001:2015, ISO 14001:2015, ISO 45001:2018 and AEO-LO certifications. Additionally, CFS -Mumbai and CFS - Chennai are ISO 28000:2007 certified, with Mumbai also CT-PAT certified.

Discussion on financial performance with respect to physical / operational performance of SBU:

During FY 2024-25, SBU: LI was able to achieve 22% growth in terms of Imports, 15% growth in terms of Exports as compared to last FY. SBU: LI was able to achieve a growth of 21% of overall volumes with respect to last year. The turnover has increased by 10% and profit has reduced by 23% in comparison to last FY.

Material developments in Human Resources / Industrial Relations front, including number of people employed:

Industrial relations in all the units of CFS, WD, AMTZ and MMLH remained cordial right throughout the year. As on 31st March, 2025, SBU: LI had a total 94 employees.

Logistics Services (LS) Opportunities and Threats: Opportunities

SBU: LS has established expertise in freight forwarding for Defence and Government of India organisations handling sensitive and high-value cargo, while increase in outsourcing of logistics by private corporates opens opportunities in sectors like pharmaceuticals, auto components and chemicals. Adopting to rising need for technology-driven logistics covering real-time tracking, digital documentation, AI route optimisation and automated customs clearance can enhance efficiency and scalability of the SBU. The e-commerce boom is further driving demand for 3PL, warehousing and distribution. With the Dedicated Freight Corridor gaining momentum and rail logistics expanding as a sustainable solution, SBU: LS is well-placed to foray into freight train operations and integrated 3PL operations, positioning it for sustained growth.

Threats:

The Russia-Ukraine war has disrupted supply chains, driving up prices of key commodities, increasing freight charges, causing container shortages and reducing warehousing availability. The Israel-Hamas conflict has further escalated freight rates, led to port closures, shipment delays and congestion from longer transit times. Additionally, the logistics industry faces a shortage of skilled manpower, with 3PL providers citing recruitment, retention and training as major challenges.

Segment-wise or product-wise performance:

SBU: LS during the year achieved a growth of 32 % from last year in revenue . Growth in bottom line is 26.5% as compared to previous year. In FY 2024–25, the share of SBU topline from private sector business increased to 33% up from 29% in FY 2023–24, along with a strong 49% growth in turnover from this segment as compared to last year. Business from PSU and Government customers also recorded a healthy 24% growth over the previous year. Operationally, the SBU achieved remarkable growth across key activities, with Air Exports up by 113%, Air Chartering by 61%, Ocean Imports by 31% and Air Imports by 20% compared to FY 2023–24. Topline growth is registered in all the activities of this SBU.

Outlook:

In FY 2025–26, the Indian logistics sector is poised for strong growth, supported by Government initiatives, expanding manufacturing, e-commerce growth and increasing supply chain optimisation. Despite global geopolitical disruptions affecting freight rates and availability, the freight forwarding industry continues to gain traction from rising international trade, defence procurement and capital goods movement in key sectors such as pharmaceuticals, chemicals, auto components and electronics. SBU: LS maintained its strong position across Government of India, CPSE and corporate clients, while expanding into high-growth areas. Indias 3PL market is projected to grow at over 8% CAGR till 2029, driven by e-commerce growth, rising consumption and the formalisation of retail supply chains. Leveraging this trend, SBU: LS is entering the 3PL business in the Eastern region, with operations expected to commence next year. The SBU also forayed into railway logistics through freight train operations on a leased model under the SFTO scheme, aligning with national plans to increase rails modal share from 27% to 45% by 2030. Technology upgrades, including API-enabled "Trace and Track" (PATANG) facilities, have enhanced real-time cargo visibility and operational flexibility. SBU: LS further strengthened its global network with new associate tie-ups in the USA, UK, Germany, China, Singapore and Vietnam and remains actively engaged with key industry associations such as IATA, MTO, ACAAI, FFFAI, WCA, WSA, JCTRANS, AMTOI and OPCA, positioning it as an emerging integrated logistics solutions provider.

Risks and concerns:

SBU: LS continues to face significant challenges in the dynamic logistics landscape, primarily driven by freight market volatility, especially on key lanes such as China–India and India–Africa, where ocean freight rates fluctuate unpredictably. Geopolitical disruptions—including the Red Sea crisis, port strikes and conflict zones—have disrupted trade routes and created operational uncertainties. Sudden changes in bilateral trade policies and sanctions, particularly involving countries like Iran and Russia, further complicate cargomovements.Persistentcontainercongestion at ports and ICDs also hampers efficiency and impedes sectoral growth. Operational dependencies on shipping lines, airlines and trucking vendors for rate and slot availability add to the unpredictability. Compliance-related challenges, including delays and penalties due to documentation errors or misdeclarations—especially for hazardous or sensitive cargo like pharmaceuticals and defense goods—remain a concern amid growing regulatory scrutiny. Cargo security risks such as theft, pilferage or damage during transit or warehousing persist, while financial risks from SME clients delayed payments and currency fluctuations in USD/ EUR-denominated shipments continue to impact cash flows. Frequent routing disruptions have also escalated costs, directly affecting margins and overall profitability.

Internal control systems and their adequacy:

SBU: LS has in place an effective Internal Control Mechanism and during the year under review, a fairly large number of Internal Audits were carried out in all branches and the findings were found to be satisfactory. All the branches of the SBU: LS are ISO accredited and such accreditations were valid in FY 2024-25.

CORVI, our operating process is re-looked and revamped to strengthen internal operations through enhanced control, automation and process standardisation aligned with our SOPs.

Discussion on financial performance with respect to operational performance:

During the year SBU: LS witnessed growth in turnover coupled with increased volume in all activities except for Ocean Export and Express Service. Air Export, Ocean Import and Air Charter activity registered noticeable growth in volume.

Material developments in Human Resources / Industrial Relations front, including number of people employed:

As on 31st March, 2025, SBU: LS had a total of 228 employees.

5. COLD CHAIN (CC)

Industry structure and developments:

India, as an agrarian economy, continues to face significant post-harvest losses due to inadequate cold chain infrastructure, stemming from limited storage, insufficient temperature-controlled transport and fragmented supply chains. The Indian cold chain market, valued at USD 26 billion in 2023, is projected to reach USD 70 billion by 2032, growing at a CAGR of 11.4%. Cold storage capacity is expected to expand to 40.7 million metric tonnes, driven by rising demand for temperature-sensitive products, the growth of organised retail and quick service restaurants, supportive Government policies and greater consumer awareness of food safety.

Government initiatives, including financial incentives, tax benefits and infrastructure development schemes are accelerating growth, while modern temperature-controlled warehouses, refrigerated vehicles and the adoption of automation and IoT are addressing long-standing infrastructure gaps in this industry. With increased production of perishables and growing demand from food and pharmaceutical sectors, certain market segments are expected to grow at nearly 17% annually.

Against this backdrop, SBU: Cold Chain has built a strong operational footprint with five strategically located, state-of-the-art temperature-controlled warehouses in Hyderabad, Vijayawada, Rai, Patalganga and Bhubaneswar. These facilities handle a diverse range of perishable and high-value products, adhering to stringent safety and quality standards. Complementing this warehousing network, a dedicated fleet of 30 reefer vehicles provides pan-India coverage, with real-time temperature monitoring ensuring product integrity during transit. By integrating infrastructure, distribution capability and value-added services, SBU: Cold Chain is well-positioned to meet the growing demand for end-to-end cold chain solutions, contributing to food security, supply chain efficiency and the resilience of Indias agri-economy.

Opportunities and Threats: Opportunities:

Indias cold storage sector, though challenged by fragmentation, skill shortages and limited tech adoption, presents significant growth potential. Rising consumer focus on food safety and compliance is accelerating demand for modern, end-to-end cold chain solutions. Key growth drivers include the expansion of sectors like QSRs, dairy, meat, seafood, pharmaceuticals and fresh produce, all requiring reliable temperature-controlled logistics. The push for real-time monitoring is boosting adoption of IoT-enabled vehicles, while stricter pharmaceutical regulations and vaccine distribution are making pharma logistics a high-growth vertical. Additionally, organised retail and the surge in e-commerce grocery delivery are fueling last-mile cold chain demand in urban and semi-urban regions.

Threats:

The cold chain industry faces several threats that can impact long-term viability. High capital investment in infrastructure, coupled with steep operating costs for electricity, maintenance and skilled manpower, put pressure on profitability. Intense competition among organised players often leads to price undercutting and unsustainable margins. Underutilisation of capacity, especially in multi-commodity storage, results in poor ROI and financial strain. In rural and semi-urban areas, unreliable electricity and weak transport infrastructure disrupt cold chain continuity. Additionally, a shortage of trained personnel affects operational efficiency, while seasonality and fluctuating demand, particularly in agri-based cold chains, lead to inconsistent utilisation and revenue instability.

Segment–wise or product-wise performance

SBU: CC has demonstrated an improved performance, recording a 10% year-on-year (YoY) growth in topline. The growth is largely fueled by the expanding food processing industry and increasing demand for processed and frozen foods, driven by shifting consumption patterns and the rise of organised retail.

On the other hand, the Temperature-Controlled Vehicle (TCV) segment has seen a substantial increase in utilisation during the same period. To improve vehicle utilisation operational efficiency and generating higher revenue, SBU: CC has successfully onboarded new customers from diverse industry segments with a special focus on Retail & Quick commerce segment.

Outlook:

SBU: CC is strengthening its national footprint through the development of new cold storage facilities with lower capital investment and faster execution timelines, ensuring quick market readiness. The SBU has plans of adopting cold storage facilities on asset light model by leasing of infrastructure facilities and reefer vehicles enabling rapid scalability while minimising capital risk. A new facility in Kolkata, currently under development, will enhance SBU: CCs presence in Eastern India and meet the regions growing demand for cold chain logistics. These initiatives are expected to drive higher turnover, improved profitability and greater operational flexibility, delivering cost-effective and customer-focused solutions across the country.

Risks and concerns:

The Temperature Controlled Warehouses (TCW), the key revenue stream for SBU: CC, faced several operational risks that require active mitigation and monitoring. Seasonal demand volatility especially in Agri and food processing sectors, leads to underutilisation during off-peak months and inconsistent revenue. Growing competition in Tier 1 and Tier 2 cities has resulted in market saturation, price wars and shrinking margins. Additionally, high equipment maintenance costs due to continuous refrigeration and aging systems increase operational expenses and capital burden. Human resource challenges, including high attrition of trained staff and limited availability of skilled professionals, further strain operations and heighten dependency on a narrow talent pool.

Internal control systems and their adequacy:

Operational Controls and System Integration in Cold Chain Operations SBU: CC has established a robust operational framework to enhance efficiency, accuracy and system integrity across its TCW network. Regular Perpetual Inventory checks and Warehouse Management Software ensure real-time inventory tracking and traceability, while SAP integration supports transparent financial management procurement, sales and asset modules, backed by internal and external audits. SCADA systems are deployed for real-time monitoring of refrigeration, automatedalerts,remotediagnosticsandhistorical data logging to maintain temperature consistency. Additionally, SBU: CC is leveraging e-commerce platforms to expand reach and strengthen last-mile cold chain logistics, particularly in the food and pharmaceutical sectors, reinforcing the shift toward a digitally enabled and responsive infrastructure.

Discussion on financial performance with respect to operational performance:

SBU: CC achieved a 10% year-on-year revenue growth, driven by improved utilisation of temperature controlled warehouses and vehicles, effective deployment of assets across key geographies and customer segments and the expansion of integrated end-to-end cold chain solutions.

Material developments in Human Resources / Industrial Relations front, including number of people employed:

SBU: CC has strengthened its position in temperature-controlled logistics through centralised operations at its Mumbai HQ, enabling faster decision making and standardised processes. The recruitment of seasoned professionals and a restructured, strength-aligned marketing team have enhanced domain expertise, driven customer acquisition and deepened market penetration. As of 31st March, 2025, the SBUs manpower stood at 50.

6. TRAVEL & VACATIONS

Industry Structure and developments:

In FY 2024-25, the Indian travel and tourism industry experienced strong growth, supported by strategic infrastructure investments and evolving market dynamics that position the country as a global tourism hub. Business travel spending reached USD 38.3 billion, returning to pre-pandemic levels. The airline sector carried 165.7 million domestic and 33.86 million international passengers, registering YoY growth of 7.8% and 14.1%, respectively. Foreign Tourist Arrivals stood at 9.66 million, aided by increased MICE activity, rising Bleisure travel and growing outbound demand. Government support included Rs.20,000 crore allocations for infrastructure, last-mile connectivity, visa reforms, skills development and PPP-based tourism projects. In aviation, Tata Group consolidated Air India, Vistara and AIX Connect under a unified brand, while IndiGo expanded international reach through codeshare agreements. Leisure travel grew 20% YoY, with Tier 2 & 3 cities outpacing Tier 1 in holiday spending. Outbound travel reached record highs to destinations such as Abu Dhabi, Hanoi and Bali.

The travel and tourism segment has undergone technological transformation by expansion of digital ecosystem through Online Travel Agents (OTA) and aggregators who are extensively using AI and Gen AI to increase customer engagement through chatbots and virtual assistants. The consumers have gradually migrated from traditional ways of booking to mobile first platforms. DigiYatra initiative was extended to 24 airports, improving the passenger experience through contactless and paperless travel. Airport infrastructure also inducted IoT and AI driven technology for surveillance, contactless scanning, automated baggage tracking, etc.

Balmer Lawries Travel Management and Vacations business is well-placed to leverage these trends, integrating technology to serve the expanding business and leisure travel segments. Despite the growth of travel and tourism segment in India, the sentiment of travelers was notably affected by the safety related incidents like tragic crash of Boeing 787 and terror attack in Pahalgam. This prompts for heightened scrutiny and need for enhanced safety measures in travel and tourism. Geopolitical disruptions in the Middle East, Russian airspace restrictions and fuel price volatility also impacted the travel and tourism industry adversely.

Opportunities and Threats: Opportunities:

The Indian travel industry is projected to grow annually at 12%–15% over the next five years, with its contribution to the economy expected to increase by 21% over 2019 (pre-pandemic) levels. The resurgence of business travel to pre-pandemic levels, coupled with strong growth in both domestic and inbound tourism, presents substantial headroom for expansion. This creates a compelling opportunity for TMCs like Balmer Lawrie to strengthen their market presence by offering integrated travel solutions under one roof. Concurrently, Indian LCCs witnessed clear growth, expanding their fleet from 728 to 812 aircraft in FY 2024–25, alongside a rise in departures, thereby unlocking new avenues for both TMCs and Online Travel Agencies (OTAs). The increasing adoption of digital platforms, AI-driven personalisation and enhanced e-visa systems have significantly improved traveler convenience and operational efficiency across the sector.

Threats:

Geopolitical disruptions in regions such as the Middle East, Pakistan and Russia continue to pose significant risks to the industry by leading to longer flight routes, increased fuel consumption and a decline in inbound tourism. Jet fuel price volatility further compounds the problem, contributing to high operational costs for airlines. Additionally, airport congestion at major hubs like Delhi, Mumbai and Bengaluru has impacted on-time performance and turnaround efficiency. Safety concerns like terrorist attacks and airline crash remains a threat to this segment.

On the tourism front, the industrys heavy dependence on seasonal travel creates inconsistent demand, resulting in idle capacity during off-peak periods. The rapid expansion of tourism also raises serious environmental concerns, with increased pressure on local ecosystems. Events such as flash floods in

Himachal Pradesh, landslides in Uttarakhand and extreme heatwaves have disrupted travel plans and bookings, underlining the growing threat of climate volatility. Additionally, a fragmented market with numerous unorganised players has led to price wars and eroded margins for established operators. Despite ambitious policy initiatives and funding at the central level, execution at the state level remains uneven, often delaying the full realisation of intended impacts.

Travel:

Segment-wise or product-wise performance:

In FY 2024–25, the Travel SBU delivered strong, diversified growth, achieving record profitability and milestone ticket issuance. The exclusive Government of India employee travel portal, launched in April, 2022, recorded a 50% rise in registrations, nearing 3 lakh users. Enhancements are underway to make it a one-stop platform with international ticketing, hotels, cabs and cruise bookings.

The Defence Travel System expanded its footprint, while the Self Booking Tool improved customer satisfaction and cost efficiency for corporate clients. The Corporate Hotel team strengthened its presence in bookings and MICE, managing high-profile national events attended by top dignitaries. The Company also entered the charter booking segment, serving ministries and corporate clients.

Through product diversification, digital integration and customer-centric services, the Travel SBU enhanced Balmer Lawries revenue and market presence in Indias competitive travel industry.

Outlook:

Indias travel industry is set for strong growth in FY 2025–26, with the sector projected to expand 12%–15% annually, driven by robust macroeconomic fundamentals, Government initiatives and rising demand from Tier II / III cities. Domestic and outbound travel are expected to see healthy traction, supported by infrastructure upgrades and digital booking adoption. In the corporate and MICE segments, demand for large-scale event management and Government conferences is likely to remain strong, creating scope for bundled hospitality and logistics services. The SBUs portal-based booking systems and self-booking tools for Government, Defence and corporate clients will see higher traction, while the expansion of services into hotels, cabs, cruises and MICE (Meetings, Incentives, Conferences and Exhibitions) will be critical in offering end-to-end travel solutions. The SBUs focus towards service excellence by upgrading technology interventions will drive the growth of the SBU in the coming years. While challenges around climate-related disruptions, airport congestion, geo political conflicts and uneven on-ground policy implementation persist, the overall trajectory signals robust expansion. With strategic diversification, digital innovation and operational scalability, Balmer Lawrie is poised to play a pivotal role in shaping Indias transformation into a leading global travel hub.

Risks and concerns:

The Indian travel industry faces several challenges that could hinder its growth in FY 2025–26. Visa complications and the lack of visa-on-arrival options continue to deter international tourists, while a drastic 97% cut in global tourism promotion budgets limits Indias visibility abroad. Infrastructure gaps, especially in Tier II / III and religious destinations, along with overcrowding and cleanliness issues, hamper the tourist experience. Rising pollution levels and environmental degradation also affect tourist health and heritage preservation. Additionally, geopolitical tensions, security risks and growing digital threats—such as payment fraud and data breaches—pose operational and reputational challenges for travel service providers.

Internal control systems and their adequacy:

Balmer Lawries SBU: Travel operates under a robust Internal Financial Control (IFC) framework to ensure operational efficiency, compliance and financial integrity. Annual internal audits cover all key functions—procurement, sales, billing, payments and receivables—ensuring transparency and adherence to policies. Audit findings are reviewed with SBU head and integrated into improvement plans. The control environment is further strengthened by ongoing technology upgrades that enhance service delivery and stakeholder interface.

SBU: Travel maintains a well-structured and adequately monitored internal control system that supports its business objectives, ensures regulatory compliance and safeguards assets, thereby contributing to its sustained growth and profitability

Discussion on financial performance with respect to operational performance:

SBU: Travel has delivered outstanding performance across both financial and operational metrics. In FY 2024-25, SBU: Travel achieved its highest-ever turnover and no. of ticket issuance in its history. While the number of tickets issued soared to 31.30 lakhs—a remarkable 26% year-on-year (YoY) growth compared to the previous year, the turnover and profit in the year has archived a 24% and 46% year-on-year (YoY) growth, respectively.

Material developments in Human Resources / Industrial Relations front including number of people employed:

Balmer Lawries SBU: Travel has upheld its reputation for professional management, employee-centric policies and a strong focus on diversity and development. In FY 2024–25, several HR initiatives were implemented, including executive recruitment, D&I programs and targeted training across all employee categories (FTC, OS, Officers, Executives). Regular workshops were conducted on soft skills, grievance handling, customer service and communication, particularly for ticketing staff. Monthly product sessions with airlines and vendors, leadership interactions and specialised training for second-line managers supported succession planning. These efforts reflect the SBU: Travels commitment to continuous learning and employee engagement. As on 31st March 2025, the total manpower engaged by SBU: Travel ware 319.

Vacations

Nature of companys business:

Vacations Vertical is in the business of providing integrated travel and holiday solutions for a wide range of services, primarily including International Group Tours / Customised and Domestic leisure holidays and the booking of standalone services such as Air, Hotel, Rail Europe Travel, Car,

Cruises, sightseeing, visa processing, Travel insurance, etc. The vertical also serves Corporates (MNCs, Private and Public Limited Companies), PSUs, and various other Government departments for their comprehensive business travel needs and end-to-end MICE (Meetings, Incentives, conferences, and Exhibitions) movements.

Segment–wise or product-wise performance:

Complementing the industrys growth, the SBU: Vacations recorded its highest-ever gross topline in FY 2024–25, marking a 61% increase over the previous year and delivering a positive bottom line. Key contributors included a 108% surge in Corporate & MICE, 53% growth in GIT Retail and 10% in FIT Retail. This performance was driven by strengthened internal operations, enhanced social media marketing, improved IT and customer service, full staffing and the launch of a dedicated call center. New GIT and LTC-focused packages, along with employee incentive schemes and cross-BU referrals, further supported SBU: Vacations strong post-pandemic recovery.

Outlook:

The outlook for the tourism industry in the upcoming fiscal year remains highly positive, both globally and within India, offering strong growth prospects for tour operators catering to retail international and domestic travel. International tourist arrivals are projected to reach 1.5 billion in 2025—up 17.23% from 2023—surpassing pre-pandemic levels, with global tourisms contribution to GDP expected to touch USD 11.1 trillion. Fueled by evolving traveler preferences, rising demand for personalised and tech-driven experiences and renewed interest in sustainable travel, the industry is witnessing robust momentum, especially across Asia-Pacific, Europe and North America.

For Indian tour operators, this recovery translates into a surge in demand for both outbound and domestic packages. Travelers are increasingly seeking immersive, curated itineraries—whether its short-haul international getaways or culturally rich domestic experiences. With continued emphasis on modern retailing, connected trip ecosystems, and AI-enabled services, there is a clear opportunity to expand offerings across flights, hotels, activities and transport—all through a single, seamless platform. However, geopolitical tensions, inflation and economic uncertainties remain risks that could influence sentiment and spending. For operators like us, the focus will be on agility, digital innovation and customer- centricity to capitalise on this high-growth environment.

Risks and concerns:

The global tourism industry will face significant challenges, including geopolitical tensions, economic uncertainty, high inflation, rising energy and interest rates and conflicts in Ukraine and the Middle East. Additional concerns like overcrowding, extreme weather events, terrorist attacks, labour shortages and supply-demand imbalances are disrupting services and driving up costs. These factors continue to hinder full recovery, underscoring the urgent need for the industry to build resilience, enhance safety protocols and adopt sustainable practices for long-term stability.

Internal control systems and their adequacy: The Vacations vertical has a robust internal control system in place, which is essential for ensuring the accuracy, completeness, and reliability of financial and operational information. The vertical has an effective internal control mechanism and internal audits were conducted in all branches during the review period which covered various areas, including customer feedback management and billing to customers. The results of the audits were satisfactory, indicating that the internal controls are operating effectively

Discussion on financial performance with respect to operational performance:

SBU: Vacations has delivered outstanding performance across both financial and operational metrics. In this FY, SBU: Vacations has achieved a growth of 17% in revenue with respect to last year, along with more than double growth in the bottom line. Key contributors included a 108% surge in Corporate & MICE, 53% growth in GIT Retail and 10% in FIT Retail.

Material developments in Human Resources / Industrial Relations front, including number of people employed:

The Vacations vertical places strong emphasis on employee development and fostering positive workplace relations. With cordial employee relations maintained across all branches, the vertical actively invests in training and skill-building initiatives to enhance team capabilities. As of March 31st, 2025, the team comprised of 117 employees. This focus on building a skilled and cohesive workforce is central to driving sustained business growth and operational excellence.

7. REFINERY & OIL FIELD SERVICES [ROFS] Industry structure and developments:

SBU: ROFS is engaged in the activity of Mechanized Oily Sludge Processing and Hydrocarbon Recovery from Crude Oil Storage tanks and Lagoons. This activity pertaining to oily waste recycling through recovery of hydrocarbons, is a niche segment in the oil & gas industry and ROFS has been the pioneer and market leader in the field over the last two decades.

Presently, there is an influx of new competitors in the space with entry of 9-10 new companies. The increased competition has affected the profitability margins and equipment utilisation levels throughout the sector.

Stagnant Demand and high competitive intensity are presently adversely affecting the business viability in this sector.

Opportunities and Threats:

The market share of ROFS has decreased in the recent years due to entry of new competitors and lower processing rates. The overall market size is also showing a downward trend due to lower processing rates and stagnant volume. The main threats visualized by the SBU: ROFS relate to subdued market demand and the entry of new players in the niche market. Preference to MSME vendors also poses a significant challenge to SBU: ROFS with respect to booking of new orders.

Segment-wise or Product-wise performance:

The operational performance was lower than our budgeted estimates, due to sluggishness of market demand for sludge processing services. The new order booking was lower due to high competitioninthemarketandexpectedprofitability of newly booked orders is expected to be lower than historical trends.

Outlook:

The demand for sludge processing services is expected to be stagnant in the near term. Phased exit from sludge processing space and diversification of Business into other allied areas is being explored.

Risks and Concerns:

Increased competition in the market is putting downward pressure on market share as well as profit margins for SBU: ROFS.

Other risks include adoption of modern technologies in refineries, which would reduce generation of oil sludge in the storage tanks, thereby limiting the need for sludge processing in the long run.

Internal control system and their adequacy:

Tank Bottom Sludge processing and Lagoon Sludge Processing are onsite operations and SBU: ROFS adheres to the best norms and HSE practices followed by oil refineries and oil exploration companies. No near-miss incidents have been recorded by SBU: ROFS during the year. Periodic audits, risk mitigation measures and compliance with HSE guidelines ensure robustness of the internal control systems.

Discussion on financial performance with respect to operational performance:

The Financial and operational performance was lower than budgeted estimates due to lower market demand and price sensitivity in the market due to high levels of competition.

Material Developments in Human Resources / Industrial Relations front, including number of people employed:

Industrial relations continued to be satisfactory during the FY under report. SBU: ROFS had total 13 employees.

ENVIRONMENTAL PROTECTION AND CONSERVATION, TECHNOLOGICAL CONSERVATION, RENEWABLE ENERGY DEVELOPMENTS, FOREIGN EXCHANGE CONSERVATION

The requisite details on the subject are disclosed in Boards Report.

CORPORATE SOCIAL RESPONSIBILITY

The requisite details on the subject are disclosed in Boards Report.

KEY FINANCIAL RATIOS

Ratios	FY 2024-25	FY 2023-24
Debtors Turnover	5.77	6.17
Inventory Turnover	13.36	12.08
Interest Coverage Ratio	45.54	41.86
Current Ratio	2.34	2.17
Debt- Equity Ratio	0.00	0.00
Operating Profit Margin (%)	9.25	8.33
Net Profit Margin (%)	9.03	8.46
Return on Net Worth (In %)*	15.76	14.62

*NOTE:

The increase is majorly attributable to the remarkable performance by SBUs: Travel & Vacations and Logistics Services

CAUTIONARY NOTE

The statements in the Management Discussion and Analysis describing the Companys focal objectives, expectations and anticipations and those of its SBUs may be forward looking within the meaning of applicable statutory laws and regulations. Actual results may differ materially from the expectations expressed or implied in such forward looking statements. Important factors that could influence the Companys operations include global and domestic supply and demand conditions affecting selling prices of products, input availability and prices, changes in Government regulations / tax laws, economic developments within the country and factors such as litigation and Industrial relations.

The information and opinion stated in this section of the Annual Report essentially cover certain forward-looking statements, which the Management believes to be true to the best of its knowledge at the time of its preparation. The Management shall not be liable to any person or entity for any loss, which may arise as a result of any action taken on the basis of the information contained herein.

The nature of opinions herein is such, that the same may not be disclosed, reproduced or used in whole or in part for any other purpose or furnished to any other person without the prior written permission of the Company.