Blue Water Logistics Ltd Management Discussions

OVERVIEW OF INDIAN ECONOMY

The Indian economy is estimated to grow at 7.6% in FY 2025-26, up from 7.1% in FY 2024-25, as RBI rate cuts along with cuts in personal tax and GST led to recovery in consumption demand. Supportive inflation backdrop led RBI to ease policy rates by 100 bps in FY 2025-26. RBI also enhanced liquidity through measures like CRR Cuts, bond purchases and long-term FX swaps. Depreciation pressure on Rupee intensified during second half on back of foreign portfolio outflows and surge in crude oil prices. At the end, Rupee registered the largest annual depreciation against Dollar to close the year at around 95 levels.

Despite these stabilising trends, trade uncertainties, and ongoing regional conflicts continued to weigh on market sentiment, global trade flows, and investment decisions. End of Fiscal 2026 saw significant supply-side disruptions in markets from the Middle East conflict, leading to spike in energy prices. Brent crude prices rose from $70/bbl towards $100/bbl, posing fresh stagflation Ary risks for the global economy.

India is primarily a domestic demand-driven economy, with consumption and investments contributing to

70% of the economic activity. With Indias economy showing resilient growth, supported by strong domestic demand, policy reforms, and a healthy investment pipeline, several new projects and developments are underway across key sectors. According to World Bank, India must continue to prioritise lowering inequality while also putting growth-oriented policies into place to boost the economy.

Over the years, the Indian government has introduced many initiatives to strengthen the nations economy. The Indian government has been effective in developing policies and programmes that are not only beneficial for citizens to improve their financial stability but also for the overall growth of the economy. Over recent decades, Indias rapid economic growth has led to a substantial increase in its demand for exports. Besides this, a number of the governments flagship programmes, including Make in India, Start-up India, Digital India, the Smart City Mission, and the Atal Mission for Rejuvenation and Urban Transformation, are aimed at creating immense opportunities in India

(Source IBEF India)

OUTLOOK

Indias economic outlook remains robust, supported by strong macroeconomic fundamentals, resilient domestic demand and sustained investment momentum. The economy continues to rank among the fastest-growing major economies globally, driven by broad-based expansion across manufacturing, services and infrastructure, alongside steady improvement in industrial and business activity.

The Union Budget 2026 27 is presented after twelve years of policy continuity marked by macroeconomic stability, fiscal discipline, and sustained economic growth driven by structural reforms and public investment. Guided by Atmanirbhar Bharat, the Budget emphasises strengthening domestic manufacturing, energy security, and reducing import dependence. It highlights inclusive measures supporting employment, agriculture, household purchasing power, and universal services, contributing to growth of around 7%. The Budget also recognises global trade disruptions, supply chain risks, and rapid technological change shaping the external environment.

The governments interventions across energy diversification, agricultural preparedness, inflation conditions, external sector strength, and policy measures support the economys ability to absorb near-term disruptions arising from global developments, while ongoing monitoring and calibrated responses remain important in view of evolving conditions.

The recent oil price shock presents an upside risk to the inflation trajectory in the medium term, as higher energy costs are gradually transmitted into domestic prices, particularly in fuel-intensive sectors. While supply disruptions have added to cost pressures, selective price corrections in perishables, amid export-related dislocations, point to localised demand-supply imbalances. A sustained elevation in oil and gas prices could lead to broader second-round effects through input cost pass-through across sectors. Nonetheless, the Government remains vigilant, with measures underway to ensure adequate domestic energy availability and mitigate potential inflationary pressures.

In an increasingly uncertain global environment, the resilience of the Indian economy will depend on the strengthening of domestic fundamentals. This will require sustained focus on structural reforms to enhance competitiveness, achieve efficiency gains, and drive investment. At the same time, emphasis on preparedness, policy coordination, and domestic capacity development will remain important for navigating evolving global uncertainties and supporting growth.

1. INDUSTRY STRUCTURE AND DEVELOPMENT

The logistics sector continues to play a pivotal role in Indias economic growth by facilitating seamless movement of goods across domestic and international markets. Government initiatives such as the National Logistics Policy, PM Gati Shakti Programme, Dedicated Freight Corridors, multimodal transportation infrastructure, and digitalization of supply chains are expected to improve efficiency and reduce logistics costs.

The rapid growth of e-commerce, organized retail, manufacturing, pharmaceuticals, FMCG, and export-oriented industries has further strengthened demand for integrated logistics solutions. Increasing adoption of technology-driven warehousing, fleet management systems, real-time tracking, and automation is transforming the logistics landscape. During the year, the logistics industry witnessed increased focus on supply chain resilience, sustainability initiatives, and optimization of transportation networks to meet evolving customer requirements.

Road Ahead

The sector is witnessing a structural transformation driven by technology adoption. Artificial Intelligence (AI), Internet of Things (IoT), warehouse automation, real-time tracking systems, predictive analytics, and digital freight platforms are becoming integral to logistics operations. Customers are increasingly demanding end-to-end visibility, faster deliveries, and integrated supply chain solutions, encouraging logistics service providers to invest in digital capabilities and operational excellence.

The implementation of the National Logistics Policy, PM Gati Shakti initiatives, Dedicated Freight Corridors, logistics parks, multimodal transportation networks, and significant infrastructure investments under the Union Budget 2026-27 are expected to enhance connectivity, reduce transit times, and improve operational efficiency across the logistics ecosystem. The Governments capital expenditure allocation of 12.2 lakh crore is expected to provide a further boost to transportation and logistics infrastructure development.

The Company remains optimistic about the growth prospects of the logistics industry and is well-positioned to capitalize on emerging opportunities through operational excellence, technology-led transformation,

Annual Report 2025-2026 customer-centric solutions, and strategic expansion initiatives. The management remains focused on enhancing service quality, improving efficiencies, strengthening its market presence, and delivering sustainable value to all stakeholders during FY 2026-27.

(Source: IBEF INDIA)

2. OPPORTUNITIES AND THREATS

OPPORTUNITIES:

Growth in domestic consumption and manufacturing activities.

Expansion of e-commerce and last-mile delivery services.

Government investments in transportation and logistics infrastructure.

Rising demand for integrated logistics and value-added warehousing services.

Increasing adoption of technology-enabled logistics solutions.

Growth in export-import activities and cross-border logistics.

THREATS:

Volatility in fuel prices impacting transportation costs.

Intense competition from organized and unorganized market participants.

Regulatory and compliance changes affecting logistics operations.

Infrastructure bottlenecks in certain regions.

Economic slowdown affecting freight volumes.

Global geopolitical uncertainties disrupting supply chains.

3. SEGMENT-WISE / PRODUCT-WISE PERFORMANCE:

The Company has delivered a satisfactory financial and operating performance for 2025-26. The total revenue is 38633.31 lakhs in FY 2025-26 as compared to 19628.59 lakhs in FY 2024-25. The Profit before interest and taxes stands 3385.24 lakhs for the FY 2025-26 as against 1438.94 lakhs in 2024-25 on standalone basis.

4. OUTLOOK FOR FY 2026-2027

Indias logistics sector is expected to maintain a positive growth trajectory supported by infrastructure development, digital transformation, rising industrial activity, and increasing focus on supply chain efficiency.

The Company intends to:

Expand its customer base across key industry verticals.

Strengthen technology-enabled logistics solutions.

Improve fleet efficiency and asset utilization.

Explore strategic partnerships and business expansion opportunities.

Focus on sustainable and environmentally responsible logistics practices.

Management remains optimistic about the long-term prospects of the logistics industry and expects continued growth in demand for integrated logistics services.

5. RISK AND CONCERN

The Companys ability to foresee and manage business risks is crucial in achieving favorable results. Risk management at our company is an integral part of the business, focusing to mitigate the adverse impact of risks on business objectives. The Company has laid down a well defined risk management procedure covering the risk identification, risk exposure, potential impact and risk mitigation process. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUECY

The Company maintains an adequate system of internal controls commensurate with the nature, size, and complexity of its operations. The internal control framework includes:

Defined authority matrix and approval mechanisms.

Standard operating procedures for logistics operations.

Periodic internal audits.

Financial and operational monitoring systems.

Compliance monitoring mechanisms.

Information technology controls and cybersecurity measures.

The Audit Committee periodically reviews the effectiveness of internal control systems and internal audit findings to ensure continuous improvement.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Financial performance of the company on Standalone Basis during the FY 2025-26 as compared to FY 2024-25 is as under: (Rs. Rs.in lakhs)

Particulars	2025-2026	2024-2025	% of
			Increase/Decrease
Gross Revenue from	38602.05	19618.04	96%
operations
Profit Before Tax	3385.24	1438.94	135%
Profit after Tax	2520.71	1070.75	135%

Operational Performance

The Company continued to focus on improving operational efficiency leading to better returns for the shareholders. Further, During the financial year under review, the Company recorded growth in operational activities supported by increased freight volumes, improved customer acquisition, and expansion of logistics services.

8. MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONSHIP FRONT, INCLUDING NUMBER OF PEPOLE EMPLOYED

Human resource practices and policies at our company ensure that all employees, wherever they work, whatever their role is, are always treated equally, fairly and respectfully. We maintain consistent and transparent diversity policies.

Our human resource team believes in personnel management, which involves planning, organizing, directing and controlling of the recruitment and resource management, training & development, compensation, integration and maintenance of people for the purpose of contributing to organizational, individual and social goals.

People power is one of the pillars of success of company. As on 31 st March, 2026 the Company employs 144 employees. Going ahead, the Company aims to retain and develop the existing employees and align their goals with the common business vision and mission.

9. THE DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

During the financial year, the details of significant change in the key financial ratios i.e. change of more than 25% as compared to the previous year along with the detailed explanation is summarized below on standalone basis:

Sr.	Key Financial Ratios	F.Y.	F.Y.	Changes in	Reasons for change
No.		2025-26	2024-24	%
1.	Debtors Turnover	4.14	5.48	-24%	-
	Ratio (in days)
2.	Inventory Turnover	NA	NA	NA	NA
	Ratio
3.	Interest Coverage	0.51	0.74	-31%	New debt raised by
	Ratio				company
4.	Current Ratio (in	1.52	1.56	-2%	-
	times)
5.	Debt Equity Ratio	1.33	1.82	-27%	Increase in Shareholders
	(in times)				fund.
6.	Operating Margin (in	9.98	8.78	13.70%	-
	%)
7.	Net Profit Margin	7.00	5.00	20%
					-
	(in %)

The Return on Net Worth during the FY 2025-26 was 31.08% as compared to 52.94% in FY 2024-25. The decrease in the return on Net Worth is mainly due to increase in Shareholding and net income of the company.

10. CAUTIONARY STATEMENT

Statement made in the Management Discussion and Analysis describing the various parts may be forward looking statement within the meaning of application securities laws and regulations. The actual result may differ from those expectations depending upon the economic conditions, changes in Government regulation and amendments in tax laws and other internal and external factors.