Balurghat Technologies Ltd Management Discussions

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2026

The Management Discussion and Analysis Report presents the managements perspective on the business environment, the Companys operations, financial condition, opportunities, risks and outlook for the financial year ended 31 March 2026. It should be read in conjunction with the audited financial statements, the notes forming part thereof, the Boards Report and the other disclosures contained in the Annual Report.

1. OVERVIEW OF THE GLOBAL ECONOMY

The global economy remained resilient but uneven during the year under review. Economic activity was influenced by geopolitical conflicts, trade-policy uncertainty, supply-chain realignment, volatile commodity and energy prices, changing interest-rate conditions and climate-related disruptions. These factors continued to affect freight movement, insurance and transportation costs, delivery schedules and customer inventory decisions.

For logistics and supply-chain businesses, the operating environment required flexibility, cost discipline, technology-enabled visibility and close coordination with customers and service partners. Uncertainty surrounding global trade routes, fuel prices and financing conditions remained an important concern for businesses dependent on the timely and cost-efficient movement of goods.

2. OVERVIEW OF THE INDIAN ECONOMY

The Indian economy continued to demonstrate resilience during FY 2025-26, supported by domestic consumption, infrastructure investment, manufacturing activity, services growth and improved physical and digital connectivity. These factors supported the movement of goods and people and created opportunities for organised logistics and supply-chain service providers.

At the same time, businesses remained exposed to fuel-price movements, financing costs, competitive pricing, collection cycles and evolving regulatory requirements. Sustained investment in transport infrastructure, digital systems and formalisation of business activity is expected to support the long-term development of the logistics sector.

3. INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian logistics sector is a critical link between manufacturing, trade, agriculture, retail, e- commerce and consumption. The industry remains fragmented, with a large number of regional and unorganised service providers; however, customers are increasingly preferring organised operators capable of providing reliable, compliant, technology-enabled and integrated services.

Government initiatives relating to multimodal connectivity, logistics infrastructure, highways, railways, ports, cargo terminals and digital logistics platforms are intended to reduce delays and improve supply-chain efficiency. Digital documentation, e-way bills, vehicle-tracking systems, electronic billing and data-based route planning are also improving transparency and operational control.

The travel and tourism ecosystem has likewise benefited from improved connectivity, digital booking platforms and growth in domestic travel. Nevertheless, this activity remains sensitive to seasonality, discretionary spending, safety concerns and external events.

4. COMPANY AND BUSINESS OVERVIEW

Balurghat Technologies Limited operates in the fields of logistics solutions, supply-chain services and travel-related services. The Company focuses on dependable execution, customer relationships, cost control, regulatory compliance and prudent management of working capital. For financial reporting purposes, the Company operates within a single reportable business segment.

During FY 2025-26, the Company achieved substantial growth in revenue from operations. The higher scale of operations was, however, accompanied by a comparatively faster increase in the cost of services and finance costs, which compressed profitability. Management continues to focus on service-level discipline, route and customer profitability, recovery of receivables, vendor management and better utilisation of assets and financial resources.

5. OPPORTUNITIES

• Growth in manufacturing, retail, e-commerce and domestic consumption, which is expected to increase the requirement for efficient transportation and supply-chain services.

• Expansion of road, rail, port and multimodal infrastructure, enabling improved connectivity and shorter transit times.

• Formalisation of the logistics sector and increasing preference for compliant, organised and technology-enabled service providers.

• Use of digital tools for vehicle tracking, route optimisation, electronic documentation, billing, collection monitoring and customer reporting.

• Scope to deepen relationships with existing customers by offering reliable, customised and value-added logistics solutions.

• Improved domestic travel connectivity and wider use of online platforms, creating selective opportunities in travel-related services.

• Potential for better asset utilisation, vendor consolidation and process automation to improve operational efficiency.

6. CHALLENGES AND THREATS

• Volatility in diesel, crude oil, toll, insurance, maintenance and other transportation costs.

• Intense competition and customer pressure on pricing, particularly where contractual rates cannot be revised immediately.

• High working-capital requirements arising from delayed collections and the need to make timely payments to service partners and vendors.

• Dependence on third-party transporters, drivers, vendors and infrastructure, which may affect capacity, service quality and delivery schedules.

• Regulatory and compliance requirements relating to taxation, transport, labour, safety, environment, insurance and listed-company obligations.

• Cybersecurity, data-integrity and business-continuity risks arising from increasing use of digital systems.

• Seasonality and external disruptions affecting travel-related demand and movement of goods.

• Macroeconomic or geopolitical events that may disrupt trade routes, fuel availability, commodity prices and customer demand.

7. RISKS AND CONCERNS

Risk Area	Nature of Risk	Management Response
Operating-cost risk	Fuel, toll, maintenance, insurance and vendor costs may rise faster than realisation from customers.	Periodic rate review, route and service profitability analysis, vendor negotiation and cost monitoring.
Credit and receivable risk	Delayed collections or customer defaults may increase working- capital requirements and credit losses.	Customer-wise credit review, ageing analysis, follow-up, escalation and provisioning in accordance with applicable accounting policies.
Liquidity and leverage risk	Higher short-term borrowing and finance costs may affect liquidity and debt-servicing ability.	Cash-flow forecasting, monitoring of drawing power and borrowing limits, collection discipline and prudent funding decisions.
Customer and competition risk	Concentration, loss of major customers or aggressive pricing by competitors may affect revenue and margins.	Service reliability, customer engagement, diversification, value addition and regular review of commercial terms.
Operational and vendor risk	Dependence on third-party fleets, drivers and service partners may affect capacity and timely delivery.	Vendor empanelment, performance monitoring, documentation, insurance and contingency arrangements.
Regulatory risk	Non-compliance with transport, tax, labour, corporate and securities laws may result in penalties or business disruption.	Compliance calendars, professional review, internal approvals, periodic reporting and oversight by the Board and its Committees.
Technology and cybersecurity risk	System failure, unauthorised access or loss of data may interrupt operations and reporting.	Access controls, data backup, system monitoring, user training and periodic strengthening of information-security practices.
External-event risk	Weather events, accidents, civil disruption, geopolitical developments or public-health events may affect movement and demand.	Business-continuity planning, insurance coverage, alternative routing and close coordination with customers and vendors.

8. SEGMENT-WISE PERFORMANCE

The Company operates within a single reportable business segment. Accordingly, separate segment- wise financial performance is not presented. The overall operational and financial performance of the Company is discussed in the following sections and should be read with the audited financial statements and notes forming part thereof.

9. FINANCIAL PERFORMANCE AND RESULTS OF OPERATIONS

The key financial results for FY 2025-26, together with the corresponding figures for FY 2024-25, are set out below:

Revenue from operations increased by 38.01% to Rs. 1,20,08,081 (in hundreds), reflecting a significant expansion in the scale of business. Total expenses, however, increased by 41.81%. The cost of services rose by 44.03% and represented approximately 89.17% of revenue from operations, compared with approximately 85.45% in the previous year. This increase, together with an 83.59% rise in finance costs, resulted in a decline in profit before tax and profit after tax.

Profit after tax for the year was Rs. 54,851 (in hundreds), compared with Rs. 2,10,826 (in hundreds) in FY 2024-25. The net profit margin declined from 2.42% to 0.46%. Management is accordingly placing greater emphasis on pricing discipline, route and customer profitability, recovery of receivables, cost optimisation and efficient utilisation of borrowings.

Total assets increased by 14.96% to Rs. 48,69,688 (in hundreds). Net property, plant and equipment increased by 61.61%, primarily reflecting capital expenditure during the year. Trade receivables increased by 9.81%, while short-term loans and advances increased substantially. The Company will continue to monitor the recoverability, ageing and deployment of current assets.

Total borrowings increased by approximately 31.55%, with short-term borrowings rising by 33.96%. The increase in borrowings supported working-capital and investment requirements but also contributed to higher finance costs and a lower debt-service coverage ratio.

Net cash flow from operating activities was negative Rs. 4,42,899 (in hundreds), compared with negative Rs. 8,46,276 (in hundreds) in the previous year. Net cash used in investing activities was negative Rs. 1,32,832 (in hundreds), while financing activities generated Rs. 6,45,497 (in hundreds). Consequently, cash and cash equivalents increased by Rs. 69,766 (in hundreds) and stood at Rs. 5,81,941 (in hundreds) at year-end.

10. KEY FINANCIAL RATIOS AND SIGNIFICANT VARIATIONS

The following ratios are based on the audited financial information and the computation methodology applied by the Company. Material variations of 25% or more, including the change in return on net worth, are explained below:

Ratio	FY 2025-26	FY 2024-25	Change and explanation
Trade receivables turnover ratio	3.90	3.10	Increase 25.81 %. Revenue from operations increased at a higher rate than average trade receivables.
Inventory turnover ratio	N.A.	N.A.	Not applicable, as the Company is principally engaged in service activities and does not maintain material inventory.
Interest coverage ratio	1.34	3.45	Decrease 61.13%. The ratio declined due to lower earnings before interest and tax and higher finance costs.
Current ratio	1.49	1.63	Decrease 8.59%. The movement was below the 25% materiality threshold.
Debt-equity ratio	1.50	1.18	Increase 27.53%. The ratio increased mainly due to higher long-term and short-term borrowings.
Debt service coverage ratio	0.40	1.94	Decrease 79.50%. Lower earnings available for debt service and higher debt-servicing obligations affected the ratio.
Trade payables turnover ratio	5.50	2.22	Increase 147.75%. Higher cost of services and a reduction in average trade payables resulted in faster turnover.
Net capital turnover ratio	9.04	6.35	Increase 42.36%. Revenue increased at a higher rate than average working capital.
Operating profit margin	2.77%	5.10%	Decrease 45.66%. The cost of services and other operating costs increased faster than revenue.
Net profit margin	0.46%	2.42%	Decrease 81%. Operating costs and finance costs increased faster than revenue.
Return on capital employed	3.73%	15.20%	Decrease 75.46%. Lower operating earnings and higher capital employed affected the return.
Return on investment	24.96%	25.11%	Decrease 0.63%. The movement was below the 25% materiality threshold.
Return on equity / net worth	3.15%	12.11%	Decrease 73.98%. The decline was mainly attributable to the reduction in profit after tax.

11. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has internal financial and operational control systems commensurate with the nature and size of its business. The control framework covers authority and approval levels, accounting and financial reporting, safeguarding of assets, statutory compliance, banking and treasury operations, customer billing and collections, vendor payments and maintenance of supporting records.

The Audit Committee reviews financial reporting, internal-control observations, statutory and internal-audit matters and compliance status at periodic intervals. Management takes corrective action where weaknesses or improvement opportunities are identified. The Company continues to strengthen controls through greater use of digital records, reconciliation, ageing review, access restrictions and management reporting.

12. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Company recognises that the quality, commitment and experience of its employees are essential to reliable service delivery. The Company endeavours to maintain a safe, respectful and performance-oriented work environment and to promote discipline, accountability, training and compliance with applicable employment laws.

The number of permanent employees on the rolls of the Company as at 31 March 2026 was 42. Employee relations remained cordial during the year under review. Management continues to focus on role clarity, operational training, technology adoption, safety awareness, productivity and retention of experienced personnel.

13. OUTLOOK

The medium-term outlook for the logistics sector remains constructive, supported by economic growth, infrastructure development, formalisation, digitalisation and demand for integrated supply- chain services. The Company intends to pursue growth selectively, with emphasis on sustainable margins, service quality, customer retention, receivable management, cost control and prudent use of capital.

In the near term, profitability will remain sensitive to fuel and vendor costs, pricing arrangements, finance costs, collection cycles and competitive intensity. Management will continue to review customer and route profitability, strengthen working-capital discipline, improve asset utilisation and adopt technology that enhances operational visibility and control.

14. CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied due to economic conditions, market demand, fuel and input costs, interest rates, regulatory changes, competitive conditions, customer behaviour, availability of resources and other factors beyond the Companys control. The Company does not undertake to update any forward-looking statement except as required by law.

For and on behalf of the Board of Directors
Balurghat Technologies Limited
Sd/-	Sd/-
Pawan Kumar Sethia	Ravikant Sethia
Managing Director	Whole-time Director
DIN: 00482462	DIN: 02769848
Date: 28 May 2026
Place: Kolkata