Coastal Roadways Ltd Management Discussions

ANNEXURE - B TO THE DIRECTORS REPORT

ECONOMIC & INDUSTRY OVERVIEW

The Indian logistics and supply chain sector continued to witness gradual structural transformation during FY 2025-26 driven by growth in organized distribution, infrastructure development, increasing outsourcing of logistics functions, technology adoption and focus on supply chain optimization.

The industry continued to operate amidst global geopolitical uncertainties, inflationary pressures and volatility in energy prices, which impacted transportation and supply chain costs across industries.

Demand for integrated logistics solutions including transportation, warehousing and inventory management services continued across sectors such as FMCG, pharmaceuticals, consumer products, industrial goods and organized retail.

The warehousing and supply chain segment continued to witness increasing focus on:

• inventory visibility,

• technology-enabled operational monitoring,

• process standardization,

• operational efficiency,

• safety practices, and

• system-driven warehouse operations.

The industry however continued to face challenges relating to:

• fuel price volatility,

• rising manpower and compliance costs

• infrastructure constraints,

• driver availability,

• weather-related operational disruptions, and

• increasing customer expectations relating to service quality and turnaround timelines.

COMPANY OVERVIEW

Coastal Roadways Limited is engaged in the business of logistics, transportation, warehousing and integrated supply chain support services.

The Company provides services including:

• freight transportation,

• secondary distribution,

• warehousing,

• inventory management,

• warehouse support services, and

• allied logistics solutions.

The Company continues to maintain long-standing business relationships with reputed customers across multiple sectors.

During the year, the Company continued to focus on:

• operational efficiency,

• process-driven operations,

• technology-enabled monitoring,

• safety practices,

• customer service enhancement, and

• infrastructure strengthening.

The Company continued to strengthen operational controls through:

• GPS-enabled fleet monitoring,

• CCTV-based operational monitoring,

• system-driven warehouse operations,

• digital process controls, and

• inventory discipline mechanisms.

OPERATIONAL OVERVIEW

Freight Division : The Freight Division continued to remain a major contributor to the Companys operations during the year.

The division continued to focus on:

• fleet utilization,

• route optimization,

• operational efficiency,

• turnaround management,

• preventive maintenance, and

• transportation safety practices.

Revenue from the Freight Division stood at ^28.46 Crores during FY 2025-26 as against ^31.34 Crores during the previous year. The Company continued to focus on operational optimization and disciplined cost management in the transportation business.

Supply Chain Solutions Division :The Supply Chain Solutions Division continued to witness growth during the year. Revenue from the division increased to ^12.91 Crores during FY 2025-26 from ^9.66 Crores in the previous year.

The division continued to focus on:

• warehouse operations,

• inventory accuracy

• process standardization,

• manpower productivity,

• safety controls, and

• technology-enabled operational monitoring.

The Company continued operations at organized warehousing facilities including system-driven operations catering to institutional customers.The increase in warehouse-related operational expenses during the year reflects scaling up of warehousing and supply chain activities.

TECHNOLOGY & PROCESS INITIATIVES

The Company continued to focus on technology-enabled operational processes across transportation and warehousing operations.

Key focus areas included:

• GPS-enabled fleet monitoring,

• CCTV-enabled operational controls,

• system-driven warehouse operations,

• digital process monitoring,

• inventory management systems, and

• process standardization initiatives.

The Company continues to evaluate evolving operational technologies including material handling solutions, warehouse process improvements and alternate mobility solutions wherever operationally feasible.

FINANCIAL PERFORMANCE

Revenue from operations during FY 2025-26 stood at Rs. 41.37 Crores as against Rs. 41.00 Crores during the previous year. Total income stood at Rs. 41.48 Crores.

Profit before tax stood at Rs. 2.00 Crores as against Rs. 2.08 Crores during the previous year. Profit after tax increased to Rs. 1.56 Crores from Rs. 1.47 Crores during the previous year. Earnings per share improved to Rs. 3.80 from Rs. 3.50 in the previous year.

The Company maintained a healthy financial position during the year with:

• improved net worth,

• negligible external borrowings,

• stable cash flows, and

• continued investment in operational assets.

Net worth of the Company increased to ^24.97 Crores as at 31st March 2026.

The Company remained debt free during the year and capital expenditure incurred during the year, including additions to operational vehicle assets, was substantially funded through internal accruals and operating cash flows.

The Company continued to maintain positive operating cash flows during the year. Finance costs reduced during the year on account of lower borrowing levels.

Profitability during the year was impacted by fair valuation adjustments relating to mutual fund investments accounted for in accordance with applicable Indian Accounting Standards.

KEY FINANCIAL RATIOS

The key financial ratios of the Company remained broadly stable during the year under review.

Sl. No.	Key Financial Ratios	31.03.2026	31.03.2025	Change(%)	Reason for Variance
1.	Debtors Turnover	5.7	6.10	-7%	Not Applicable
2.	Interest Coverage Ratio	Nil	38.53	-100%	Note (a)
3.	Current Ratio	7.90	7.76	2%	Not Applicable
4.	Debt Equity Ratio	Nil	0.006	-100%	Note(a)
5.	Operating Profit Margin (%)	12.29%	11.56%	6.31%	Not Applicable
6.	Net profit Margin (%)	3.77%	3.58%	5%	Not Applicable

Note:

(a) The entire debt has been repaid and there is no outstanding dues.

The Company witnessed improvement in:

• profitability,

• earnings per share, and

• overall net worth position.

Finance costs and borrowing levels reduced during the year resulting in strengthening of the balance sheet position. No significant adverse change was observed in the key financial ratios of the Company during the year except to the extent explained in the financial statements. Return on Net Worth improved in line with increase in profitability and strengthening of reserves during the year.

OPPORTUNITIES, THREATS & OUTLOOK

The Company believes that increasing formalization of logistics and warehousing operations, growth in organized distribution networks and increasing focus on integrated supply chain solutions provide long-term growth opportunities.

The Company continues to focus on strengthening its presence in integrated logistics, warehousing and allied supply chain services while maintaining operational discipline and financial prudence.

The Company intends to continue focusing on:

• warehousing and supply chain solutions,

• operational efficiency,

• technology-enabled monitoring,

• process standardization,

• customer retention, and

• infrastructure strengthening.

The Company continues to maintain a prudent financial approach while gradually strengthening its operational capabilities in the warehousing and supply chain solutions segment.

The Company is strategically strengthening its reserve position to support future growth opportunities in warehousing and integrated supply chain operations while maintaining financial discipline and operational stability.

The Company also continues to evaluate opportunities relating to:

• organized warehousing,

• technology-enabled supply chain operations,

• material handling systems, and

• value-added supply chain services.

RISKS & CONCERNS

The Company recognizes that logistics and warehousing operations are exposed to various operational and business risks including:

• fuel cost volatility

• manpower availability

• infrastructure constraints,

• operational disruptions,

• safety risks,

• customer demand fluctuations,

• regulatory changes, and

• competitive pricing pressures.

The Company also remains exposed to fluctuations in prices of operational inputs including fuel, tyres, lubricants and other transportation-related consumables which may impact operating margins until corresponding revisions are implemented.

The Company continues to strengthen its operational and internal control systems through:

• process monitoring,

• technology interventions,

• preventive maintenance,

• operational reviews,

• training initiatives, and

• safety-focused practices.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The Company has adequate internal control systems commensurate with the size and nature of its business.

The internal control framework is designed to ensure:

• safeguarding of assets,

• reliability of financial reporting,

• operational efficiency,

• compliance with applicable laws and regulations, and

• proper authorization and recording of transactions.

The Company continued to strengthen system-driven controls across transportation and warehousing operations. Internal audits are conducted periodically and findings are reviewed by the management and Audit Committee for corrective and preventive actions.

HUMAN RESOURCES & INDUSTRIAL RELATIONS

The Company considers its employees, drivers, warehouse workforce and operational teams as valuable assets The Company continued to focus on:

• employee engagement

• operational training,

• process discipline,

• safety awareness,

• productivity improvement, and

• compliance-oriented operational culture.

Industrial relations during the year remained cordial.

HEALTH, SAFETY & OPERATIONAL PRACTICES

The Company continued to emphasize safe operating practices across transportation and warehousing operations.

Focus areas include:

• PPE compliance,

• fleet safety monitoring,

• CCTV-enabled operational monitoring,

• fire and electrical safety,

• operational discipline,

• equipment safety practices, and

• driver awareness initiatives.

The Company remains committed towards safe and responsible operational practices.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable laws and regulations.

Actual results may differ materially from those expressed or implied due to various factors including economic conditions, government regulations, fuel prices, competitive pressures, customer demand patterns and other incidental factors beyond the control of the Company.