MANAGEMENT DISCUSSION AND ANALYSIS REPORT
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 endeavour 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 2025-26.
iv. share the future outlook of the Company.
FY2025-26 witnessed continued uncertainty in the global economic landscape, driven by geopolitical conflicts, trade disruptions, the weaponisation of energy and finance, rising scepticism towards free trade, intensifying competition for critical minerals and divergent growth and inflation trajectories across major economies. Against this backdrop, global policymaking has increasingly been influenced by strategic, security and political imperatives, often taking precedence over economic efficiency and multilateral norms.
Gross Domestic Product (GDP): India retains strong growth momentum and its GDP is expected to grow by 6.8 - 7.2% in FY 2026-27. Growth in FY 2025-26 was largely driven by private consumption and investment. The main factors for this growth were Capital Accumulation (sustained capex, Private investment revival, logistics reforms), Labour Input (greater formalisation, implementation of labour codes, skilling & employability), Total Factor Productivity (regulatory simplification, efficiency gains).
Even as the global economy navigates uncertainty, India continues to chart a strong growth path, as reflected in the First Advance Estimates (FAE) for FY26.
India recorded the lowest inflation rate since the beginning of the CPI series, with April-December 2025 average headline inflation coming in at 1.7%. This was driven by a subdued food inflation. Decline in food inflation was driven by a persistent contraction in prices of major commodities like vegetables and pulses.
The industrial sector grew by 7% in first half of FY 2025-26, higher than the previous year (6%). The services sector accounted for 54% in GDP in the first half of FY 2025-26.
Heightened uncertainty in global trade and the imposition of high, penal tariffs created stress for manufacturers, particularly exporters and affected business confidence. The Government responded by using this crisis as an opportunity to push through key measures such as GST rationalisation, faster progress on deregulation and further simplification of compliance requirements across sectors.
Significant investments in multimodal logistics, ports, railways, airports, inland waterways and digital infrastructure under initiatives such as PM GatiShakti, the National Logistics Policy and ULIP are strengthening supply-chain efficiency and enhancing Indias competitiveness.
The countrys logistics costs have moderated, while freight movement through ports, railways, inland waterways and air cargo networks continues to expand, creating opportunities across transportation, warehousing, container freight stations and integrated logistics services.
Simultaneously, Indias manufacturing and industrial ecosystem is witnessing renewed momentum, supported by policy reforms, infrastructure expansion, GST rationalisation, export diversification and increasing integration with global value chains.
Growth in chemicals, petrochemicals, advanced manufacturing, industrial clusters and MSME- led supply chains is strengthening demand for industrial packaging, performance chemicals, lubricants and specialised industrial solutions. Investments in agriculture infrastructure, warehousing and cold-storage networks are further enhancing opportunities in temperature- controlled logistics and cold-chain services, while the recovery in domestic travel, hospitality and aviation continues to support growth in travel and vacation services.
Simultaneously, the importance of sustainability, digitalisation, climate resilience and responsible business practices as key drivers of long-term competitiveness and stakeholder value creation is to be given due credence.
Against this backdrop, Balmer Lawrie & Co. Ltd., with its diversified presence across integrated logistics, container freight stations, multimodal transportation, temperature- controlled warehousing, cold-chain solutions, industrial packaging, greases and lubricants, leather chemicals, travel and vacation services, remains well positioned to contribute to Indias growth story while creating sustainable value for customers, employees, communities and other stakeholders. Guided by its commitment to responsible business conduct and sustainable development, the Company continues to align its business strategy with national priorities of efficiency, resilience, innovation, sustainability and inclusive growth.
1. INDUSTRIAL PACKAGING (IP)
Industry Structure and Developments:
The Indian Packaging industry is estimated at USD 84 billion, making it the fifth largest sector of the Indian economy. It is also one of the highest growth sectors in the country with a projected CAGR of 7% to 8% through 2030. The packaging industry can be broadly segmented into Industrial and Consumer Packaging consisting of Rigid and Flexible sub-segments. The Rigid Industrial Packaging can be further segmented based on packing size, type of packing and the material of construction including a) Paper & Paper Board
b) Glass c) Plastic and 4) Metal drums.
The 210L Mild Steel (MS) Drums industry, a part of the rigid industrial packaging segment, has over 79 players across India. The industry has higher capacity compared to the market demand leading to intense competition in the marketplace. Despite higher and volatile steel prices, steel drums continue to hold a distinct advantage owing to their strength, stability, operational convenience and sustainability.
Balmer Lawrie & Co. Ltd. is the market leader in this industry with a formidable market share and this position is being sustained with technological upgradation and a very effective procurement policy. SBU-IP operates through six manufacturing plants on pan-India basis which includes the state-of-the-art facility at Navi Mumbai. After closure of its Kolkata manufacturing plant, SBU- IP continues to serve the Eastern Region Market with a Tolling Business Model locally.
The modernisation of the Chittoor plant has already been completed and IP-Silvassa has undergone modification in the plant layout due to road widening project without affecting day to day operations.
SBU-IP manufactures high-quality products ranging from Open-Head, Tight-Head, Plain Drums to Lacquered, Composite, Galvanized, Tall, Necked-In and Conical Drums catering to diverse industry segments and best-in-class customers in these segments. These products are utilised for packaging Lubricants, Additives, Chemicals, Agrochemicals, Transformer Oils, Food and Fruit Pulp. Overall industrial growth especially in the chemicals segment is the key driver for the drum industry in India.
Balmer Lawries Industrial Packaging is acclaimed for superior product quality, high reliability in supplies, modern manufacturing systems through customer-centric experienced personnel. It enjoys a high brand value, large, diverse and growing customer base across India and Exports markets. Focus on continuous improvement, quality assurance, innovation and sustainability & HSE has helped in having an edge over competition.
Balmer Lawrie remains committed to the Sustainability Badge by EcoVadis, a globally recognised sustainability ratings provider that partners with over 300 leading multinational organisations to help reduce supply chain risks and drive innovation in sustainable procurement.
Strength and weakness:
Strength:
SBU-IP enjoys a formidable position as a market leader in its area of operation, bolstered by strong brand recognition, referrals and a pan- India presence. It operates the largest capacity in the industry and maintains a diversified customer base. Furthermore, the division has robust financial strength, a highly professional workforce and a strong database. Its operations are characterized by high reliability, unparalleled technical capability and knowledge, along with reliable access to the best quality raw materials.
Weakness:
Despite its strong market position, the division faces challenges, including lower penetration in the Gujarat market due to cut-throat pricing. Additionally, it currently secures no business from Public Sector Undertakings because of the restrictive Micro, Small and Medium Enterprises (MSME) clause.
Opportunities & Threats:
Opportunities:
There are multiple avenues for growth, such as the introduction of new products to enhance the existing product portfolio and the potential to access new markets through exports. The division can also capitalize on the growing chemicals market segment in India. Operationally, the modernization of the Chittoor plant in the Southern Region, to include new product portfolios and the reorientation of the Silvassa Plant present significant opportunities for expansion and efficiency.
Threats:
The business environment is fraught with several threats such as the high input costs of key raw materials. Escalating steel prices are driving up the cost of MS Drums compared to High-Density Polyethylene (HDPE) drums. The division also faces intense competition from alternate packaging solutions, such as Intermediate Bulk Containers (IBCs), collapsible bins, HDPE and reconditioned drums. Furthermore, competition is intensifying from smaller players who leverage locational advantages and new barrel plants are emerging in the Western and Southern regions despite an existing market overcapacity to the tune of 100%. Finally, navigating a highly susceptible and price-sensitive customer base remains a persistent challenge.
Segment-wise or product-wise performance:
SBU-IP has been showing consistent growth in volumes, turnover and profits. During FY 202526, it registered 5% (YOY) growth in volumes, revenue growth was about 2% (YOY).
The major segments which saw double digit growth were agro chemicals (10%), transformer oil (14%) and fruit (14%) and the chemicals segment registered moderate growth.
In the product category, exponential growth was witnessed in value added barrels such as Lacquered barrels (10%) and internally painted (27%).
Outlook:
Factor |
Outlook |
Market Demand |
Positive and growing, driven by chemicals & industrial production |
Growth Rate |
5-8% year-on-year |
Input Costs |
Elevated crude/commodity prices may pressure margins |
Economic Impact |
Moderately supportive GDP growth (6.9%) underpins industrial demand |
Long-Term Trends |
Sustainability & reuse gaining attention, impacting packaging choices |
SBU-IP expects to continue its growth trajectory in FY 2026-27. SBU-IP anticipates significant growth in the coming years with the biggest drivers being Chemicals, Food, Transformer Oils and Lubes segment. SBU-IP also plans to expand aggressively in the Exports segment. Further, the full product basket will be available in all regions by inclusion of GI, composite and neck in barrels.
Risks and concerns:
Geo-political developments around the world like the West Asia crisis may pose challenges. 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 ISO 45001. 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 2026, SBU-IP had a total of 169 employees.
Environmental protection and Conservation, Technological conservation, Renewable energy developments, Foreign Exchange conservation:
a) Modernisation of IP Chittoor has been completed and this will ensure an enhanced product basket.
b) Conversion of fuel from High-Speed Diesel (HSD) to Light Diesel Oil (LDO)/Liquefied Petroleum Gas (LPG) gas in Silvassa/Chittoor/Chennai plants.
c) SDB (Standard Domed Bottom) drums introduced in Silvassa/Chittoor/Asaoti which will ensure reinforcement in case of low thickness drums.
d) Conversion to 642 diameter lids from 648 diameter initiated across all plants of IP which will lead to saving of 7% steel.
e) Direct application of special type of Paint over Cold Rolled (CR) steel i.e. without surface treatment in Taloja plant.
f) Encouraging domestic substitutes for imported goods.
g) Product improvement, cost reduction, product development or import substitution have led to:
• Improvement in efficiency.
• Quality improvement.
• Focus on Sustainability.
• Cost reduction/Value engineering
2. GREASES & LUBRICANTS (G&L)
Industry structure and developments:
India continues to be one of the worlds largest lubricants markets, ranking amongst the top three globally after China and the USA. The domestic finished lubricants market (excluding process oils) is estimated at around 2.90 billion litres and is expected to reach approximately 3.18 billion litres by 2027, registering a healthy CAGR of about 4-5%. Growth is being driven by sustained investments in infrastructure, manufacturing, mining, construction, railways, defence and the expanding automotive sector.
The Indian lubricants industry continues to witness increasing demand for premium engine oils, specialty industrial lubricants, high-performance greases, environmentally acceptable lubricants and long-life synthetic products. Simultaneously, the industry is experiencing structural changes arising from electric mobility, sustainability requirements, tightening emission norms and increasing customer preference for technologically advanced lubricants.
Despite volatility in crude oil and base oil prices during the year, the industry demonstrated resilience through improved supply chain management and greater emphasis on value- added products.
SBU-G&L continues to maintain its leadership position in specialty greases while strengthening its presence in automotive and industrial lubricants through product innovation, customer- focused solutions and expansion of contract manufacturing business.
Strength and weakness:
Strength:
SBU-G&L enjoys a strong leadership position in the specialty greases segment with over eight decades of market presence and the trusted "Balmerol" brand. SBU-G&L is supported by three strategically located manufacturing plants at Kolkata, Silvassa and Chennai, enabling efficient pan-India supply. The DSIR-recognised Applications Research Laboratory (ARL) provides strong capabilities in product development, innovation and customer-specific technical solutions. Long-standing relationships with key customers in Railways, Defence, Steel, Mining, Power and Engineering sectors, coupled with a growing Contract Manufacturing business and an extensive distribution network, provide a strong foundation for future growth.
Weakness:
SBU-G&L continues to face challenges in increasing its market share in automotive lubricants due to intense competition from multinational companies and Oil Marketing Companies (OMC) with significantly higher investments in branding and marketing. Dependence on imported base oils and specialty additives exposes the business to supply chain disruptions and price volatility. Limited OEM approvals in certain product categories and comparatively lower brand visibility in the retail lubricants segment also remain areas requiring focused attention. SBU-G&L continues to address these challenges through product innovation, digital marketing initiatives, channel expansion, cost optimization and enhanced customer engagement.
Opportunities and Threats:
Opportunities:
SBU-G&L is well-positioned to capitalize on emerging opportunities owing to its leadership position in specialty greases with the trusted "Balmerol" brand. This is supported by manufacturing facilities strategically located in Kolkata, Silvassa and Chennai, as well as a DSIR-recognized ARL equipped with strong product development capabilities. The division is well poised to cater to the increasing demand across the Railways, Defence, Mining, Steel, Ports, Infrastructure and Heavy Engineering sectors, alongside significant opportunities in contract manufacturing for reputed domestic and multinational lubricant companies. Furthermore, there is a growing demand for synthetic, food-grade, biodegradable, calcium sulphonate and polyurea greases, coupled with expansion opportunities in tractor oils, motorcycle oils, commercial vehicle lubricants and industrial specialties. The division aims to increase its focus on digital engagement through mechanic loyalty programs and channel partner development initiatives, as well as strategic collaborations and long-term supply arrangements with major industrial customers.
Threats:
The business continues to face persistent challenges, primarily driven by continued volatility in crude oil, base oil and additive prices. Aggressive pricing strategies adopted by large OMCs and multinational lubricant manufacturers, has resulted in intense competition in the automotive retail lubricants sector. Operational risks include supply chain disruptions and uncertainty regarding the availability of critical raw materials, notably the limited availability and rising cost of lithium-based raw materials. Additionally, our competitors are aggressively increasing investments in branding, digital marketing and OEM partnerships in order to gain a competitive edge in the marketplace.
Segment wise performance:
SBU-G&L operates through three major business segments:
1. Channel Sales (Automotive & Industrial)
During FY 2025-26, SBU-G&L continued to strengthen its presence across automotive and industrial markets through expansion of distributor network, focused marketing initiatives and enhanced engagement with mechanics, retailers and industrial customers.
Marketing initiatives included participation in industry exhibitions, customer meets, mechanic engagement programmes and promotional campaigns to improve brand visibility and market penetration.
During the year, the division focused on expanding its Diesel Engine Oil (DEO), Motor Cycle Oil (MCO) and premium lubricant segments and launch of new automotive and industrial grades. To drive growth, the business actively increased its penetration within the tractor and commercial vehicle markets while strengthening its distributor network across key regions. Additionally, the division enhanced its commercial outreach by combining digital customer engagement via the "Balmerol Connect Plus" platform with targeted industry exhibitions and awareness programs.
2. Direct B2B & Institutional Business
SBU-G&L continued to focus on expanding business with institutional and industrial customers across Railways, Defence, Steel, Mining, Ports, Cement and Engineering sectors.
Key initiatives during the year focused on acquiring new industrial clients, strengthening existing key accounts and supplying high-margin specialty greases and industrial lubricants. This growth was directly supported by ARLs customer-specific product development, comprehensive technical support and field trials, while the division further enhanced its market visibility by participating in industry seminars and technical conferences.
3. Contract Manufacturing
Contract Manufacturing remained one of the fastest growing segments of SBU-G&L during FY 2025-26.
SBU-G&L continued to leverage its manufacturing capabilities to undertake blending and filling operations for reputed lubricant companies, resulting in improved capacity utilization, operational efficiencies and additional revenue generation. The Company continues to explore new opportunities with domestic and international lubricant marketers to further expand this business.
Product Development and Innovation
Innovation remained a key growth driver during the year, propelled by ARLs successful development and commercialization of an expanded product portfolio. These new technological advancements include Calcium Sulphonate Complex Greases, high-performance synthetic greases and Polyurea Greases specifically tailored for electric vehicles (EV) and industrial applications. Furthermore, the division strengthened its market offerings by introducing premium automotive lubricants and specialty industrial lubricants designed for niche applications.
SBU-G&L continues to invest in development of environmentally acceptable lubricants, nonlithium grease technologies and next-generation lubrication solutions aligned with future industry requirements.
Outlook:
The outlook for the Greases & Lubricants (SBU- G&L) business remains positive, fueled by sustained growth across the manufacturing, infrastructure, mining, railways, defence and transportation sectors. The division intends to focus on expanding its Channel Business in automotive and industrial lubricants, expanding the contract manufacturing operations and strengthening its leadership in specialty greases. Product innovation will center on high-value synthetic lubricants and non-lithium grease technologies. SBU-G&L shall continue to expand its pan-India channel network, enhance digital marketing and CRM-driven customer engagement and secure long-term supply agreements with major industrial clients. These strategic efforts will be supported by a steadfast commitment to operational excellence, cost optimization and sustainable manufacturing practices.
Risks & concerns:
The principal risks associated with the SBU-G&L business include raw material vulnerabilities, including supply risks for strategic inputs, foreign exchange fluctuations impacting imported materials and volatility in crude oil, base oil and additive prices. The division also faces intense competition from multinational corporations and PSU Oil Marketing Companies, which creates significant pricing pressures on operating margins. Additionally, the business must navigate structural and compliance challenges, such as a reliance on OEM approvals and customer qualifications, evolving environmental regulations and technological shifts driven by electric mobility. To proactively mitigate these threats, the Company continues to strengthen its enterprise risk management framework through diversified sourcing, strategic inventory planning, product innovation, customer diversification and continuous operational improvements.
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 the SBU-G&L are certified for quality system management and periodic/re-certification audits were conducted at all units for IMS (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:
During FY 2025-26, SBU-G&L achieved 10% volume growth. However, further growth was constrained by the scarcity of certain base oil grades. While our focus remained on expanding sales volumes, intense pricing pressure resulted in a decline in profitability despite the increase in quantities sold.
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 168 permanent employees as on 31st March 2026.
Environmental protection and Conservation, Technological conservation, Renewable energy developments, Foreign Exchange conservation:
SBU-G&L continued its focus on sustainable manufacturing through efficient utilisation of energy and natural resources during FY 2025-26. Energy conservation initiatives included optimisation of manufacturing processes, installation of energy-efficient equipment and LED lighting and continuous monitoring of utility consumption.
The ARL continued to develop advanced lubricants and specialty greases, including environmentally friendly and non-lithium technologies, thereby strengthening the Companys technological capabilities. SBU-G&L also continued to evaluate opportunities for adoption of renewable energy at its manufacturing locations.
Environmental protection remained a key priority through compliance with all statutory environmental regulations, waste minimisation and responsible disposal practices. Foreign exchange earnings were generated through export of greases and lubricants to overseas markets, while foreign exchange outgo primarily comprised imports of additives and raw materials not available domestically. The Company remains committed to sustainable growth through innovation, operational excellence and responsible environmental stewardship.
3. CHEMICALS
Industry Structure and Developments:
The leather sector has been identified as one of the focus sectors under the Government of Indias Make in India initiative. Leather is a byproduct of the meat industry, with hides and skins generated during meat processing being recycled into valuable products through various stages of tanning and finishing. This process not only adds economic value but also promotes the efficient utilisation of by-products, contributing to sustainability and the circular economy.
There are three stages of Leather processing such as beam house, wet end and finishing. SBU- Chemicals is stronger in wet end operations in which it holds considerable market share among the Indian players. This year SBU-Chemicals entered the finishing chemicals segment and launched its own manufactured finishing chemicals. With this wider product basket, SBU- Chemicals will have an advantage to add more customers.
India is well endowed with hide and skin as 20% of the worlds cattle population and 11% of its goat and sheep population are in our country. Almost the entire availability of hides and skins are being converted into leather and leather products for exports and domestic consumption.
Given the significant growth potential of the leather chemicals market, SBU-Chemicals is well positioned to capitalise on this opportunity by strengthening its portfolio of existing products while introducing new, innovative solutions to meet the evolving needs of the industry.
The annual leather production in India is around 3 billion square feet which is 10% of the worlds leather production.
In FY 2025-26, the export from Indian leather industry has been quite similar to last year mainly due to the geopolitical scenario. Thus, annual export of leather industry from India is USD 4.75 Billion during the year as compared to USD 4.83 Billion in the previous year.
The leather industry is an intensive employment sector, providing jobs to about 4.5 million people, mostly from the weaker sections of the society. The leather products sector is a significant source of employment for women, who constitute nearly 30% of its workforce.
In terms of market potential, the Southern region accounts for approximately 44% of Indias leather chemicals market, followed by the Northern region at 33% and the Eastern region at 23%. Each region has a distinct manufacturing focus, driving demand for specialised leather chemicals. The Eastern region is predominantly engaged in the manufacture of safety gloves, the Southern region specialises in footwear and leather goods, while the Northern region is a key hub for upholstery leather and leather garments.
India is the second largest producer of footwear and leather garments in the world. The leather Industry is a fashion driven industry and based on current trends and fashion, new products are introduced without affecting the cost of production of leather. Technical services and commercial viability are the important factors of this business.
In the Fat Liquor segment, we have developed a range of products based on new technology like Hybrid Sulphitation, which will help us to increase the market share.
In line with environmental clearance, SBU- Chemicals has received consent to establish (CTE) from Tamil Nadu Pollution Control Board for expansion which is valid up to 2031.
SBU-Chemicals was awarded in Gold category by International Research Institute for Manufacturing (IRIM) in their audit for "India Green Manufacturing Challenge".
Strength & weakness and Opportunities & Threats:
Strength & Opportunities:
SBU-Chemicals has established itself as a market leader in the Fat Liquors segment and commands a significant market share in the Syntan category. The divisions market position is further fortified by its modern manufacturing capabilities and a recently expanded product portfolio, highlighted by the successful launch of new chemical ranges tailored for Beam House and Finishing operations. Operationally, the SBU maintains a distinct competitive edge through well-equipped Technical Service Centers strategically located across major Indian leather manufacturing clusters, ensuring high-quality, on-ground support for tanneries. Additionally, the division has demonstrated strong innovative prowess by developing a highly popular, eco-friendly and metal-free tanning process with Zeolite.
Weakness:
A significant portion of the Indian leather industry remains highly unorganized, with the vast majority of enterprises operating as family- owned Micro, Small and Medium Enterprises (MSMEs). Because these tanneries and leather goods manufacturers have a limited capacity to raise capital through private placements or public issues, their ability to invest in technology upgradation and capacity expansion is severely constrained. This financial limitation within the customer base inherently restricts the immediate scalability and modernization of the broader market SBU-Chemicals serves.
Opportunities
Backed by a trusted brand legacy, a highly proficient technical service team and an increasingly diversified product basket, SBU-Chemicals is well-positioned for sustained future growth. The division possesses substantial headroom to capture new market share, scale its operations and accelerate business momentum by strategically deepening its penetration into the high-potential Finishing and Beam House segments in the coming years.
Threats
The business navigates a challenging commercial landscape characterized by intense competition from multinational corporations and established Italian chemical manufacturers, which poses a significant hurdle, particularly within the premium leather segment. Furthermore, the broader industry faces the financial and operational burden of complying with increasingly stringent international environmental regulations. This necessitates continuous, capital-intensive investments in compliance, plant modernization and sustainable infrastructure. Finally, the overarching absence of globally recognized Indian brands in the international leather fashion market restricts the domestic industrys ability to capture premium value and expand its global footprint.
Segment-wise or product-wise performance:
In spite of low demand of leather upholstery and gloving leather due to import surcharge imposed by USA, global geopolitical and climate change issue, sustainability development steps by developed countries, SBU-Chemicals was able to achieve all time highest profit and turnover with increased volume through operational excellency, aggressive marketing through customers data analysis, new products development as per market need and necessary counter steps taken against competitors activities.
Outlook:
The path forward as envisaged in SBU-Chemicals is as follows:
Improve the sales volume through existing dealers and increase the distribution channel by appointing new dealers in all three regions.
• Focusing more on new product line like Beam House and Finishing Chemicals.
• Focusing export market like China, Africa, CIS countries and Bangladesh.
Risks and concern:
Increasing usage of non-leather products, environmental norms which may lead to closure of small tanneries due to increased operational costs.
Internal control systems and their adequacy:
SBU-Chemicals uses SAP to have control on raw materials and overheads. The manufacturing unit at Manali, Chennai is certified for Integrated Management System comprising of ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 of M/s. International Certification Services Private Limited, Mumbai.
SBU-Chemicals also has Zero Discharge Hazardous Certification Level 3.1, which is an international certification for usage of chemicals.
Discussion on financial performance with respect to operational performance:
In last couple of years, SBU-Chemicals is growing in good scale through Operational Excellence initiatives, process improvements, R&D work, proactive sales and marketing activities and thus in FY 2025-26, SBU-Chemicals marked all time highest turnover and profit.
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 stake holders. As on 31st March 2026, it had 91 employees.
Environmental protection and Conservation, Technological conservation, Renewable energy developments, Foreign Exchange conservation:
Environmental Protection & Conservation:
SBU-Chemicals enhanced its environmental stewardship through Zero Liquid Discharge (ZLD) practices, regulatory-compliant emission controls and the annual reuse of 1,970 KL of treated water, improving resource efficiency and reducing freshwater consumption. A Corporate Environment Responsibility-driven plantation of 5,000 trees further strengthened ecological restoration efforts and is expected to sequester approximately 100 tCO2e annually.
Technological Conservation:
SBU-Chemicals leveraged cascade reactor engineering and sink reactor technology to drive sustainable process innovation, cumulative reduction of SO2 consumption by 307 MT, eliminating 677 MT of sodium sulphate waste, conserving 3,836 KL of water and reducing alkali consumption by 384 MT annually. The initiative established a closed-loop circular process, eliminated high-TDS effluent load to the ZLD system.
Renewable Energy Developments:
SBU-Chemicals strengthened its renewable energy portfolio through the Manali, Chennai complex captive solar power plant, which generated 140,335 kWh of clean electricity during FY 2025-26, meeting 15.48% of the Manali complexs power demand and avoiding approximately 99 tCO2e emissions. To further accelerate decarbonisation, SBU-Chemicals is implementing an additional 200-kW captive solar power project.
Foreign exchange Conservation:
SBU- Chemicals does not have any major transaction in Forex.
4. LOGISTICS
Industry Structure & Development:
The Indian logistics ecosystem has evolved into one of the worlds largest by volume, crossing USD 380 billion in annual value during FY 202526 and positioning India among the top five logistics markets globally. Industry projections reflect robust long-term growth, with forecasts indicating an 8-10% CAGR through 2030, alongside specific estimates anticipating a market scale of approximately USD 546 billion by 2030 (at a 9% CAGR). This momentum is underpinned by aggressive infrastructure development across rail, road and port networks. Key national milestones include the Dedicated Freight Corridor (DFC) network reaching 96.4% completion with 2,741 km operational out of 2,843 km and the Mumbai- Ahmedabad High-Speed Rail (MAHSR) corridor achieving over 55% physical progress. Under the PM GatiShakti programme, the Government has identified 434 projects valued at Rs.11.17 Lakhs Crore to integrate multimodal infrastructure planning and align port development with national transport corridors.
Concurrently, alternative real estate assets like logistics parks and warehousing facilities are attracting substantial institutional investor interest as a recognized industrial asset class. Favourable policy reforms—including GST-led network consolidation, 100% Foreign Direct Investment (FDI) allowance, infrastructure status and Real Estate Investment Trusts (REITs)—offer low-risk opportunities with capital appreciation and easy exit avenues. Parallelly, the Indian e-commerce sector is projected to expand at an 18-20% CAGR from 2023 to 2030, with parcel volumes targeted to reach 1 billion per month by 2030 via 15-20% CAGR. Driven by high smartphone penetration, affordable data, digital payment comfort, Tier 2/3 market penetration and emerging formats like social commerce and live selling, this growth has intensified competition among third-party logistics (3PL) providers, who catered to 40-42% of total logistics shipments in FY 2025.
In the maritime and EXIM trade domain, total container throughput across India increased to 17.52 million TEUs in FY 2025-26 compared to 16.03 million TEUs in FY 2024-25, with container handling at the top 12 ports growing by 9.25%. Container Freight Stations (CFSs) serve as extended arms of seaports, facilitating port decongestion, integrated customs clearance (for home use, warehousing, temporary admissions, re-export, transhipment and outright export) and value-added services like cargo handling, packaging and labelling. Import volumes at major ports like JNPT, Kolkata and Chennai rose by 9%, driving a 12% growth in import container movement to CFS facilities. However, trade facilitation reforms—notably Direct Port Delivery (DPD) at JNPT, which now handles approximately 79% of import container clearances—have expedited cargo evacuation and altered traditional CFS revenue models.
Driven by changing customer requirements and government schemes like the National Logistics Policy, Sagarmala and Bharatmala, the broader logistics market is rapidly shifting from standalone transportation toward integrated, end-to-end supply chain management. Industry operations are heavily adopting digital transformation, AI- driven decision making, automation and real-time shipment visibility.
Balmer Lawries Logistics Infrastructure (SBU-LI) operates state-of-the-art CFS facilities at Nhava Sheva, Chennai and Kolkata (ports accounting for nearly 58% of Indias container traffic), operational warehousing at Kolkata and Coimbatore, an expanded open yard at CFS Chennai, a warehouse at Andhra MedTech Zone (AMTZ) and a Multi-Modal Logistics Hub with Visakhapatnam Port Authority, while actively setting up a Free Trade Warehousing Zone (FTWZ) near JNPT.
Balmer Lawrie Logistics Services (SBU-LS) functions as an integrated service provider delivering international freight forwarding, customs brokerage, multimodal transportation, project logistics and specialized vertical supply chain solutions.
Logistics Infrastructure (LI)
Strength and weakness:
Strength:
The CFS business continues to benefit from Indias strong macroeconomic fundamentals and sustained growth in international trade. Robust GDP growth, rising manufacturing activity, increasing consumption and continued Government focus on infrastructure development and trade facilitation are driving higher EXIM cargo volumes through major ports. Expansion of port capacity, improved multimodal connectivity through dedicated freight corridors, highways and logistics parks, along with initiatives such as PM GatiShakti and the National Logistics Policy, are enhancing the efficiency of the countrys logistics ecosystem. As containerised cargo volumes continue to grow, CFSs remain an integral part of the supply chain by providing essential services including container handling, customs facilitation, warehousing, cargo consolidation, stuffing, destuffing and value-added logistics solutions. Their strategic proximity to ports, ability to decongest port terminals and integrated logistics capabilities position CFS operators to capitalise on the long-term growth in Indias trade and logistics sector. Furthermore, increasing diversification of global supply chains and the Governments continued emphasis on exports are expected to create sustained opportunities for the CFS industry over the medium to long term.
Weakness:
The CFS industry has been facing significant operational and commercial challenges arising from an increasingly competitive market environment. Intense competition among CFS operators, coupled with pricing pressures from shipping lines and logistics service providers, has resulted in sustained margin compression across the sector. Furthermore, continuous improvements in port infrastructure, customs digitisation, automation and technology-driven cargo clearance processes have substantially reduced container dwell times, thereby limiting storage-related revenues, which have traditionally been a key contributor to CFS profitability. Government-led initiatives aimed at enhancing the ease of doing business, including DPD, paperless customs procedures, faceless assessments, risk- based inspections and streamlined clearance mechanisms, have further accelerated cargo evacuation from ports, reducing the dependence on conventional CFS operations. While these reforms have significantly improved supply chain efficiency and trade facilitation, they have also intensified the need for CFS operators to diversify their service offerings, improve operational efficiencies and focus on value-added logistics solutions to sustain profitability in an evolving logistics landscape.
Opportunities & Threats:
Opportunities:
Indias logistics sector, currently valued at $380 billion is projected to grow at an 8-9% compound annual growth rate to reach $546 billion by 2030, driven by massive Government infrastructure investments and rising trade volumes. The warehousing segment offers exceptional potential with 19% CAGR, expected to reach $35 billion by 2029. Multimodal logistics parks now include thirty-five identified locations with private operators able to commercially manage these integrated hubs. Port modernisation under the Sagarmala Programme encompasses 233 projects worth Rs.2.84 Lakhs Crore by 2035. Key Government initiatives including PM GatiShakti, the National Logistics Policy, Dedicated Freight Corridors, Bharatmala and Sagarmala are restructuring Indias supply chain ecosystem. E-commerce expansion, Production Linked Incentive manufacturing schemes and growing EXIM trade volumes further fuel demand. While containerisation levels in India have improved over the years, they continue to remain below those of developed economies, presenting substantial long-term growth potential for CFSs, inland logistics infrastructure and integrated supply chain solutions.
Threats:
Despite an overall growth of 9.25% in container traffic at major ports during FY 2025-26, the ports where the SBU-LI operates recorded a comparatively lower growth of 8.81%.. Furthermore, the container volumes of the CFS industry grew by 12% and Balmer Lawrie also achieved a 12% growth in volumes compared to FY 2024-25, thereby maintaining its market position. The presence of many CFS operators at all locations where the SBU-LI has operations further intensified competition, resulting in increased pressure on both volumes and pricing. During FY 2025-26, geopolitical developments—including the Middle East conflict, the Russia-Ukraine war, the strategic rivalry between the United States and China, rising global trade protectionism and maritime security risks—led to significant disruptions in global supply chains and containerised cargo movement. These developments contributed to heightened uncertainty in global trade, volatility in freight markets and fluctuations in cargo flows. Looking ahead, these geopolitical and economic uncertainties are expected to persist and will continue to pose challenges to the containerised cargo and logistics sector in the near term. Accordingly, SBU-LI will need to focus on operational efficiency, customer retention and service excellence to sustain its growth and competitiveness in an increasingly challenging business environment.
Segment-wise of Product Wise Performance:
SBU-LIs CFS volume growth remained at par with the overall market growth, with both registering a 12% increase during FY 2025-26. However, owing to intense competition across all operating locations and sustained pricing pressure, SBU- LIs turnover recorded a modest growth of 5% over the previous financial year. During FY 2025-26, import volumes increased by 12% year-on-year, while export volumes registered a 10% (9.98%) year-on-year growth, reflecting healthy growth across both business segments. SBU-LIs Warehousing and Distribution business also recorded a 1% year-on-year increase in throughput volumes.
In recognition of its operational excellence and service quality, SBU-LIs CFS at Chennai was conferred the prestigious "Container Freight Station Operator of the Year (Public)" award at the 16th South East CEO Conclave & Awards 2025, organised by Exim India - Shipping Times. This recognition underscores the commitment of SBU-LI to delivering efficient, customer-centric and high-quality logistics services.
Outlook:
Despite evolving market dynamics and increasing competition, the long-term outlook for CFS operators in India remains positive, supported by strong policy initiatives, expanding EXIM trade, infrastructure investments and Indias growing role in global supply chains. The future success of CFS operators will depend on their ability to transform into integrated logistics service providers by leveraging technology, operational excellence and value-added services.
SBU-LI is actively undertaking feasibility studies for the development of Inland Container Depots (ICDs), Multi-Modal Logistics Hubs and Free Trade Warehousing Zones (FTWZs) at various strategic locations across the country. SBU- LI expects these projects to be finalised in due course, which will further strengthen its logistics network and enhance its service capabilities.
Within its asset-centric business model, SBU- LI offers a comprehensive portfolio of logistics solutions comprising CFS, Ambient Warehouses, TCW and a Multi-Modal Logistics Hub through Visakhapatnam Port Logistics Park Limited, the subsidiary of the Company. This diversified service offering, supported by a pan-India presence, enables SBU-LI to serve a broad customer base, including importers, exporters, shipping lines, Customs House Agents, freight forwarders and other stakeholders in the EXIM trade.
While the logistics industry continues to face challenges arising from intense competition, evolving customer expectations, infrastructure constraints and geopolitical uncertainties affecting global trade, SBU-LI remains well positioned to capitalise on emerging opportunities. Its diversified service portfolio, strategic asset base, pan-India presence, technology-enabled customer engagement and experienced workforce are expected to support sustainable growth and strengthen its competitive position in the years ahead.
Risks & Concerns:
The logistics sector continues to present significant long-term growth opportunities driven by Government infrastructure initiatives and multimodal connectivity projects. However, the increasing adoption of DPD, expansion of on-port storage facilities and greater customs digitisation have intensified competition and reduced container dwell time, thereby impacting traditional CFS revenues. The industry also faces challenges such as port congestion, infrastructure bottlenecks, last-mile connectivity issues and evolving customer expectations for faster, technology-enabled services. In response, CFS operators are increasingly diversifying into integrated logistics solutions, including warehousing, transportation, distribution and value-added services, while investing in digital technologies such as AI, IoT, Warehouse Management Systems (WMS), RFID and data analytics to enhance operational efficiency and customer experience. At the same time, increasing digitalisation has elevated cybersecurity and data privacy risks, making cyber resilience a critical strategic priority.
Internal Control Systems and their Adequacy:
SBU-LI through its Operation package ‘Log star has built in high degree of control with checks and balances to conduct its operations effectively and efficiently. Financial records are however maintained in SAP. There are periodic internal and external audits conducted for SBU- LI. Like all other SBUs of the Company, SBU-LI also has a very robust Performance Budgetary control system whereby actual performance is weighed against the Business Plan developed before the commencement of the year. All the three units of SBU-LI are certified under ISO 9001:2015, ISO 14001:2015, ISO 45001:2018 and AEO-LO certified. Additionally, CFS Mumbai is certified ISO 28000:2007, CT-PAT and CFS Chennai is certified with ISO 28000:2007. SBU- LI has completed the implementation of new software Log star in all its CFS units. With the implementation of the new software, the strength of Company in terms of technology/systems will be improved technologically and the customers will be served with more efficiency.
Discussion on Financial Performance with respect to operational performance:
During FY 2025-26, SBU-LI was able to achieve 12% growth (11.65%) in terms of Imports and 10% growth in terms of Exports as compared to last financial year. The turnover increased by 5% and profit reduced by 26% as compared to last financial year.
Material developments in Human Resources/Industrial Relations front, including number of people employed:
Industrial relations in all the units of CFS, Warehousing Division, AMTZ and Multi Modal Logistics Hub remained cordial right throughout the year. As on 31st March 2026, SBU-LI had a total 81 employees.
Environmental protection and Conservation, Technological conservation, Renewable energy developments, Foreign Exchange conservation:
SBU-LI will continue to explore additional opportunities to lower grid dependence, optimise resource use and advance its decarbonisation targets across the network.
During the year, SBU-LI strengthened its commitment to environmental protection and conservation by embedding responsible operational practices across all business locations. The organisation continued to promote water conservation through rainwater harvesting, process reuse and reduced freshwater consumption, while also advancing its sustainability agenda through energy-efficiency and renewable energy initiatives. As part of these efforts, conventional lighting has been replaced with energy-efficient LED systems across yard, warehouse and administrative areas at all locations, helping to reduce energy consumption, improve operational efficiency and lower maintenance requirements. In Mumbai, rainwater harvesting systems have been implemented to support groundwater recharge and reduce dependence on external water sources. The Mumbai facility has also achieved zero liquid discharge through its Sewage Treatment Plant, with treated water being recycled for non-potable applications such as landscaping and washing. In addition, solar plant at Mumbai has already been commissioned to reduce reliance on conventional electricity sources which is followed in Chennai
as well.
Looking ahead, SBU-LI continues to evaluate further opportunities in renewable energy sourcing, storage solutions and other decarbonisation measures as part of its medium- term sustainability roadmap.
Logistics Services (LS)
Strength and Weakness:
Strength:
The division benefits from a strong brand reputation backed by over a century of corporate legacy, alongside a pan-India presence featuring an extensive branch network and strategic logistics infrastructure. It offers an integrated portfolio covering freight forwarding, customs clearance, warehousing, project logistics and multimodal transportation. Furthermore, the business leverages strong customer relationships across the Defence, Oil & Gas, Petrochemicals, Engineering, Pharma, Automotive and Government sectors. These operations are driven by an experienced workforce with domain expertise in handling complex logistics assignments, all functioning under a strong governance framework and compliance-driven business practices.
Weakness:
Operating in a highly competitive and fragmented industry creates persistent pressure on margins. The division also faces a heavy dependence on external shipping lines, airlines and transport service providers for execution. Additionally, market volatility continuously affects freight rates and procurement costs. Furthermore, the longer decision-making cycles for large strategic investments, which is typical of public sector enterprises, can impact operational agility.
Opportunities and Threats:
Opportunities:
Significant growth potential exists in light of increasing manufacturing activity under the ‘Make in India initiative, coupled with growing EXIM volumes from sectors such as pharmaceuticals, engineering goods, chemicals and defence. The ongoing expansion of multimodal logistics infrastructure across the country and rising demand for integrated supply chain solutions, contract logistics and warehousing points to a positive demand environment in the long term. Further opportunities lie in the increasing adoption of digital technologies, AI and automation in logistics, as well as growth in project logistics and specialized cargo handling. The division is also well-positioned to capitalize on opportunities arising from strategic partnerships and government infrastructure projects.
Threats:
The business must navigate intense competition from both domestic and global logistics service providers. Macro-level threats include geopolitical uncertainties impacting global supply chains, severe volatility in ocean and air freight markets and persistent port congestion, shipping disruptions and changing trade regulations. Finally, fluctuations in fuel prices and transportation costs, combined with increasing customer expectations regarding service quality and turnaround time, continue to pose significant challenges to the sector.
Segment-wise or product-wise performance:
SBU-LS continued to strengthen its presence across key service offerings including international freight forwarding, customs brokerage, project logistics, multimodal transportation, warehousing and integrated logistics solutions.
The freight forwarding business maintained a diversified customer portfolio across imports and exports while expanding its presence in strategic sectors including Defence, Petrochemicals, Engineering, Pharmaceuticals, Automotive and Government projects.
Project logistics continued to contribute significantly through successful execution of heavy-lift, over-dimensional cargo and specialised logistics assignments. The warehousing and value-added logistics business also continued to support customers through integrated inventory management and distribution solutions.
SBU-LS remained focused on enhancing customer engagement, expanding strategic accounts and developing customised logistics solutions aligned with customer requirements.
Outlook:
The outlook for the logistics sector remains positive, supported by sustained economic growth, increasing industrial output, infrastructure development and continued policy support from the Government of India.
Balmer Lawrie Logistics Services will continue to focus on expanding integrated logistics solutions, strengthening its digital capabilities, enhancing multimodal transportation, increasing participation in project logistics, defence logistics, warehousing and supply chain management while leveraging technology to improve operational efficiency and customer experience.
SBU-LS also intends to explore new business opportunities through strategic partnerships, digital transformation initiatives and expansion into emerging logistics segments.
Risks and concerns:
The business environment continues to be influenced by external factors such as global trade uncertainties, freight market volatility, geopolitical developments, currency fluctuations and changes in international trade regulations.
Operational risks include transportation disruptions, infrastructure bottlenecks, supply chain interruptions and fluctuations in logistics costs.
SBU-LS continuously monitors market developments and adopts appropriate mitigation strategies through diversified sourcing, customer diversification, robust procurement practices, continuous market intelligence and operational planning to minimize business risks.
Internal control systems and their adequacy-
SBU-LS has established adequate internal control systems commensurate with the nature and size of its operations. Standard operating procedures, delegation of authority, financial controls and procurement guidelines are implemented to ensure operational efficiency, compliance and transparency.
Regular internal audits, management reviews, statutory audits and compliance monitoring provide assurance regarding the effectiveness of internal control systems. Continuous efforts are also being made towards process digitalisation, automation and strengthening risk management practices.
Discussion on financial performance with respect to operational performance:
The operational performance of the SBU-LS remained supported by sustained customer engagement, diversification across industry segments and continued focus on integrated logistics solutions.
Operational efficiencies were enhanced through better procurement practices, improved vendor management, strategic pricing initiatives and optimisation of logistics operations. Continued emphasis on value-added services, customer retention and business diversification contributed positively towards overall operational performance.
SBU-LS remains focused on sustainable and profitable growth while maintaining financial discipline and operational excellence.
Material developments in Human Resources/Industrial Relations front, including number of people employed:
Human Resources continued to remain a key enabler of business growth. SBU-LS focused on strengthening employee capability through structured learning and development initiatives, technical training programmes and leadership development interventions.
Efforts continued towards enhancing employee engagement, improving digital competencies and promoting a culture of safety, collaboration and continuous improvement. Industrial relations remained cordial throughout the year with continued emphasis on employee welfare, transparent communication and statutory compliance.
SBU-LS continues to recognise its employees as its most valuable asset and remains committed to creating a safe, inclusive and performance- oriented work environment. SBU-LS had total 227 employees as on 31st March 2026.
Environmental Protection and Conservation, Technological Conservation, Renewable Energy Developments and Foreign Exchange Conservation:
SBU-LS remains committed to conducting its operations in an environmentally responsible and sustainable manner. Efforts continue towards promoting paperless documentation, digital workflows and optimisation of transportation routes to reduce environmental impact.
Technology continues to play an increasingly important role in enhancing operational efficiency through digital platforms, shipment visibility tools, process automation and data-driven decision making. SBU-LS is also exploring opportunities for adoption of Artificial Intelligence and advanced digital solutions across logistics operations.
Balmer Lawrie continues to encourage efficient utilisation of energy resources, adoption of environmentally responsible business practices and optimisation of transportation networks for reducing fuel consumption and carbon emissions.
Foreign exchange earnings continue to be generated through international freight forwarding and logistics services, while prudent procurement practices and optimisation of overseas logistics operations contribute towards efficient utilisation and conservation of foreign exchange.
5. COLD CHAIN SERVICES (CC)
Industry structure and developments:
The Indian cold chain market is projected to grow from Rs.2,162.56 billion to Rs.6,061.7 billion by 2033 (10.86%-11.4% CAGR), driven by rising demand for temperature-sensitive food, dairy and pharmaceutical products, alongside expanding organized retail and QSR sectors. Capitalizing on this momentum, SBU-CC operates five state- of-the-art Temperature Controlled Warehouses (TCWs) in Hyderabad, Rai, Vijayawada, Patalganga and Bhubaneshwar. Supported by 29 real-time monitored refrigerated vehicles (TCVs), the division provides integrated, pan-India cold chain solutions.
Strength and Weakness:
Strength:
SBU-CC offers integrated, end-to-end cold chain solutions encompassing warehousing, blast freezing and transportation. It benefits from a strategic pan-India footprint, a highly diversified customer base across the food, pharma and retail sectors and a strong commitment to sustainable, zero-discharge operations.
Weakness:
Refrigeration operations are highly energyintensive, making profitability exceptionally sensitive to electricity tariff hikes that cannot always be passed to customers. The division also faces capacity underutilization during seasonal demand fluctuations and relies heavily on a few large customers, posing significant concentration risks.
Opportunities:
Growth in the QSR, pharmaceutical and fresh produce sectors creates robust demand for advanced cold chain infrastructure. Additionally, the rapid expansion of e-commerce, quick- commerce and the integration of real-time temperature monitoring technologies present significant avenues for enhancing last-mile distribution and supply chain compliance.
Threats:
Intense competition from emerging organized players threatens to compress profit margins. Furthermore, persistent seasonal demand fluctuations tied to agricultural cycles continually expose the business to sub-optimal capacity utilization and revenue volatility.
Segment-wise or product-wise performance:
SBU-CC achieved its highest-ever pallet occupancy and 37% revenue growth, primarily driven by the operationalization of the Vijayawada TCW alongside surging demand from the food processing industry and the continued expansion of organized retail. The TCV business also recorded improved utilization through focused customer onboarding within the retail and quick- commerce sectors.
Outlook:
The division is well-positioned for sustained growth and expansion across key Indian markets by maintaining a strategic focus on improving asset utilization, operational efficiency and revenue generation through integrated solutions. As a core component of its strategic growth plan, SBU-CC is currently developing a new TCW facility in Kolkata to strengthen its presence in Eastern India, enhance service capabilities and capture regional demand for comprehensive cold chain distribution.
Risks and concerns:
Key operational risks include seasonal demand volatility causing inconsistent revenues, market saturation leading to price wars and inherently high equipment maintenance costs for complex continuous refrigeration systems. Strict adherence to food safety, environmental and statutory regulations remains critical to avoiding operational disruptions.
Internal control systems and their adequacy:
Operational Controls and System Integration in Cold Chain Operations.
SBU-CC has implemented a robust framework to ensure operational efficiency, inventory accuracy and system integrity across its TCW network. Inventory is meticulously managed via Warehouse Management Software (WMS) and Perpetual Inventory (PI) checks, while financials are seamlessly integrated through SAP. The division also undergoes periodic internal and external audits to ensure transparency, compliance and process improvement. Supervisory Control and Data Acquisition (SCADA) software ensures real-time temperature monitoring, historical data logging and automated deviation alerts across all TCWs. The SBU is actively leveraging e-commerce platforms to expand its customer base and address growing demand for efficient last-mile cold chain logistics.
Discussion on financial performance with respect to operational performance:
SBU-CC recorded a 37% growth in revenue over the previous financial year, primarily driven by the successful operationalisation of the Vijayawada TCW and improved capacity utilization across both TCWs and TCVs, along with strong customer retention driven by end-to-end cold chain solutions.
Material developments in Human Resources/Industrial Relations front, including number of people employed:
To streamline decision-making, SBU- CC centralized its functions at its Mumbai headquarters and recruited industry experts to enhance domain competence. Operationally, the division modernized its material handling with new Reach Trucks and is actively exploring AI for yard and inventory management. The total headcount stood at 50 employees as of 31st March, 2026.
Environmental protection and Conservation, Technological conservation, Renewable energy developments, Foreign Exchange conservation:
All TCWs maintain zero-discharge operations for responsible wastewater management. SBU-CC has installed solar power systems and utilizes SCADA, alongside occupancy-based auto cut-off sensors, to heavily optimize energy consumption and lower carbon emissions.
6. TRAVEL & VACATIONS
Industry Structure & Development:
The Indian travel and tourism industry is experiencing a robust and multi-faceted expansion, cementing its position as the worlds eighth-largest tourism economy. Currently contributing between 5.22% and 6% (or USD 231.6 billion) to the national Gross Domestic Product (GDP) and supporting approximately 76 million jobs, the sector has emerged as a vital economic driver. The World Travel and Tourism Council (WTTC) projects the industrys economic contribution to exceed Rs.22 Lakhs Crore, with long-term estimates pointing toward a potential USD 3 trillion output in line with a fully developed national economy. Reflecting this momentum, the core travel and tourism market is projected to reach USD 34.44 billion in 2026, scaling at a compound annual growth rate (CAGR) of 12.08% to hit USD 54.34 billion by 2030.
Building upon this strong macroeconomic foundation, domestic travel remains the absolute cornerstone of the sector, capturing an overwhelming 88% share of total tourism spending and accounting for 4.13 billion domestic tourist visits annually. Driven by rising discretionary incomes and expanding regional infrastructure, domestic travel expenditure alone is expected to reach Rs.16 Lakhs Crore. At the same time, consumer preferences are rapidly evolving toward the experience economy. This shift is giving rise to significant growth in specialized segments, most notably spiritual and religious tourism, domestic experiential leisure such as adventure and wellness and an exploding event and concert tourism landscape.
Parallel to domestic growth, Indias outbound tourism market has emerged as one of the fastest growing in the world, currently valued at USD 23.4 billion with 33 million international departures. Propelled by a young, aspirational demographic with a median age of 28 years and an influx of first-time travellers from Tier-2 and Tier-3 cities, outbound departures are expected to reach 40 to 44 million, with total overseas spending projected to scale to USD 120 billion annually by 2035.
This surge is further supported by international flight capacities reaching 110% of pre-pandemic baselines. From a destination perspective, the United Arab Emirates remains the primary choice with over 8.6 million Indian visitors, while short- haul Southeast Asian countries offer seamless entry and long-haul United States and European markets command nearly 20% of total outbound traffic.
In tandem with leisure growth, corporate travel has fully rebounded to pre-pandemic levels, fuelled by expanding business activity and strong corporate spending. The Meetings, Incentives, Conferences and Exhibitions (MICE) sector, currently valued at USD 42.25 billion, is expanding at an 11.9% CAGR and is forecast to reach between USD 74.12 billion and USD 95.15 billion. To support these expanding volumes across corporate and leisure verticals, the industry is heavily leveraging digital technologies, including Online Travel Agencies (OTAs), AI-enabled customer engagement, mobile-first booking systems and contactless platforms like Digi-Yatra across 24 airports. However, as the ecosystem scales, it must continuously navigate potential market vulnerabilities, including geopolitical disruptions, fuel price volatility, airport congestion and regional safety concerns that can periodically influence traveller sentiment and booking momentum.
Strength and Weakness:
SBU-Travel has emerged as a key growth driver for Balmer Lawrie in the post pandemic period, with strong revenue revival and improving operating performance, though it remains exposed to industry cyclicality, intense competition and dependency on airline/sector dynamics.
Strength:
Anchored by a 160-year legacy of trust, Balmer Lawrie maintains a dominant, established presence within the Indian travel trade. This unique positioning provides a formidable foundation for securing repeat and recurring government business and large enterprise contracts. The consolidated vertical offers a highly synergistic and diversified portfolio encompassing corporate travel, retail vacations and MICE capabilities. This strategic diversification enables the division to fluidly rebalance its revenue streams across segments during periods of isolated market stress. Furthermore, a steadfast commitment to pricing transparency alongside ongoing digital centralization and a diverse, highly capable workforce, significantly enhances service consistency and operational agility.
Weakness:
Despite its strong market foothold, the divisions revenue base reflects a high reliance on Government and PSU clients, exposing the business to significant customer concentration risk. While the corporate travel segment commands a strong market position, brand visibility and word- of-mouth recall within the highly competitive retail leisure and MICE segments remain comparatively subdued. This is largely attributable to a historically conservative approach to marketing investments and prevailing gaps in digital capabilities when benchmarked against leading private-sector Online Travel Agencies (OTAs). Consequently, the business remains vulnerable to intense margin pressures and broader industry cyclicality, including geopolitical shocks, airline capacity rationalization and shifting commission structures that can rapidly compress market share.
Opportunities:
The Indian travel and tourism ecosystem is undergoing a profound structural transformation, presenting substantial avenues for strategic growth. Rising discretionary incomes are accelerating demand from Tier-II and Tier-III cities, driving a discernible consumer shift toward highly curated, experiential travel, including wellness retreats, spiritual tourism and rural homestays. Supported by a continued national focus on tourism infrastructure, destination enhancement and skill development, the macroeconomic environment remains highly favorable. By accelerating the integration of Artificial Intelligence, deploying robust B2B digital platforms and capitalizing on enhanced e-visa facilitation, the division is exceptionally well-positioned to expand its end-to- end service offerings and capture these evolving, high-yield consumer segments.
Threats:
The broader travel sector must continually navigate a complex matrix of global and domestic risks. Globally, geopolitical instability, elevated travel inflation and sudden route disruptions threaten to constrain corporate travel budgets and alter tourist flows. Environmentally, the industry faces severe, escalating threats from climate-driven extreme weather, critical resource depletion and systemic infrastructure strain caused by overtourism. The hospitality ecosystem also continues to grapple with persistent shortages of skilled human capital stemming from pandemic-era workforce shifts. On the domestic front, operational continuity is increasingly threatened by a massive surge in cyberattacks targeting digital booking platforms, necessitating continuous, capital-intensive investments in digital security to protect consumer trust.
Segment-wise or product-wise performance:
The consolidated vertical delivered an outstanding operational performance in FY 2025-26, successfully accelerating its postpandemic growth momentum. The Travel division recorded an approximate 15% year-over-year growth in overall ticket issuance. Functioning as the exclusive travel platform for Government of India employees, the Government Portal recorded a 25% surge in registrations, driving substantial growth in transaction volumes. The Defence Travel System (DTS) seamlessly expanded its operational footprint across defense establishments nationwide, while the corporate ticketing segment successfully drove robust transaction volumes via its Standard Self Booking Tool (SSBT). In the Vacations vertical, the Retail segment achieved a 33% increase in gross topline over the previous year, propelled by a remarkable 70% surge in Customized Holidays (FIT). Similarly, the MICE division showcased exceptional execution capabilities, recording a 52% increase in gross topline year-over-year.
Outlook:
The strategic outlook for FY 2026-27 remains decidedly optimistic, supported by sustained growth across business, leisure and outbound segments. While global travelers are increasingly prioritizing regional stability-pivoting toward stable travel corridors for shorter, budgetconscious and safe itineraries—domestic and outbound demand within India remains exceptionally resilient. Armed with upgraded proprietary booking tools, expanded self-booking platforms and a strategically diversified service portfolio, Balmer Lawrie is optimally positioned to capitalize on this high-growth environment, seamlessly bridging the gap between corporate travel efficiency and curated leisure experiences.
Risk and Concerns:
Beyond macro-level threats, the sector faces ongoing operational risks from visa complexities, limited global tourism promotion, infrastructure bottlenecks and crowding at major destinations. Security incidents, cyber threats and payment fraud remain material concerns for travel service providers, holding the potential to severely affect both operational continuity and customer confidence. These factors underscore the urgent need for the industry to build operational resilience and adopt sustainable practices for long-term stability.
Internal control systems and their adequacy:
The vertical operates under a rigorous Internal Financial Control (IFC) framework, meticulously designed to ensure operational efficiency, absolute billing accuracy and strict statutory compliance. Supported by routine, comprehensive internal audits across all branches and seamless SAP (ERP) integration, these controls address multiple aspects, including customer feedback management, procurement and payment processing. The control environment consistently yields positive audit outcomes, safeguarding corporate assets and ensuring robust policy adherence.
Discussion on financial performance with respect to operational performance:
During FY 2025-26, the division maintained strong operational momentum, translating healthy ticketing volumes and efficient execution across categories into highly positive business results. The digital and corporate businesses contributed meaningfully to overall performance, while the strategic expansion in Retail Vacations and MICE added vital diversification and resilience to the revenue base. This balanced portfolio approach enabled both the Vacations Retail and MICE divisions to deliver robust, positive bottomline profit margins, reflecting the fundamental strength of the business model and its execution capabilities.
Material developments in Human Resources/Industrial Relations front, including number of people employed:
The division maintains a strong focus on people development, capability building and employee engagement. Management continues to proactively invest in executive recruitment, diversity and inclusion programs, soft-skills workshops, grievance handling training and regular product updates with airline vendors. These initiatives foster a culture of continuous learning and support effective succession planning. As of 31st March, 2026, the consolidated workforce comprised a total of 464 employees (394 in Travel and 70 in Vacations), reflecting a cohesive, high-performing team capable of driving sustained market leadership.
Environmental protection and Conservation, Technological conservation, Renewable energy developments, Foreign Exchange conservation:
While operating as a service-led entity with minimal direct energy-intensive operations, the vertical remains resolutely committed to advancing corporate ESG and sustainability objectives. The division actively champions environmentally responsible travel by enforcing digital documentation, paperless ticketing and intelligently optimized itineraries designed to minimize unnecessary carbon emissions. Technologically, the ongoing transition to advanced, centralized digital booking platforms extends the lifecycle of core IT infrastructure, minimizes operational rework and strategically reduces corporate travel footprints through the promotion of virtual collaboration tools. There was no foreign exchange conservation required or recorded during the reporting year.
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.
At present, 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.
Strength:
SBU-ROFS is the market leader in tank cleaning and sludge processing services for oil refineries. It has state-of-the-art and proven technology which provides competitive edge for cleaning tanks having sludge volume of 10,000 KL or more. Experienced business professionals of the relevant fields have added to the strength.
Weakness:
Being a PSU, overhead cost of SBU-ROFS is high compared to other players. As the SBU-ROFS had to follow tendering procedures even for procuring/outsourcing small value jobs, it sometimes stretches the overall execution period of the job than the time stipulated in the contract of client.
Opportunities and Threats:
The market share of BL-ROFS has decreased in 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 visualised 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 new orders. At present the business seems economically unviable to Balmer Lawrie.
Segment wise performance:
The operational performance was lower than our budgeted estimates, due to sluggishness of market demand for sludge processing services.
The Board of Directors has decided to discontinue the business of SBU-ROFS. Accordingly, no new orders will be accepted and the existing orders will be completed before exiting the business.
Outlook:
The demand for sludge processing services is expected to be stagnant in the near term.
The Company will exit the sludge processing business upon completion of all existing orders, with no new orders being accepted.
Risks & concerns:
Increased competition in the market is putting downward pressure on market share as well as profit margins for the 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 systems 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 financial year under report. SBU-ROFS had total 13 employees as on 31st March 2026.
Environmental protection and Conservation, Technological conservation, Renewable energy developments, Foreign Exchange conservation. - Nil
8. CORPORATE SOCIAL RESPONSIBILITY
The requisite details on the subject are disclosed in the Boards Report.
KEY FINANCIAL RATIOS
Ratios |
FY 2025-26 | FY 2024-25 |
Debtors Turnover |
5.54 | 5.77 |
Inventory Turnover |
15.41 | 13.36 |
Interest Coverage Ratio* |
24.54 | 45.54 |
Current Ratio |
2.22 | 2.34 |
Debt- Equity Ratio |
0.00 | 0.00 |
Operating Profit Margin (In %) |
9.10% | 9.25% |
Net Profit Margin (In %) |
8.82% | 9.03% |
Return on Net Worth (In %)# |
15.94% | 15.76% |
NOTE: * Increase in Interest Cost on Lease Liabilities. The Company has entered in to Lease agreements for SFTO and 3PL.
#The increase is majorly attributable to performance by SBU-Travel & Vacation and Logistics businesses.
CAUTIONARY NOTE
The statements in the Management Discussion & 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 forwardlooking 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 are 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.
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