DRS Cargo Movers Ltd Management Discussions

DRS Cargo Movers Limited is engaged in the business of providing warehouses on rent, high quality logistic services including transportation, packing & moving.

COMPETITIVE POSITION OF THE COMPANY

Industry Structure and Developments Industry Structure :

With the rise of online shopping and its numerous benefits, the global supply chain is evolving rapidly. Technological advancements are continuously enhancing operational efficiency. The expansion of the global logistics market is closely tied to the growth of international trade and the prevailing economic conditions.

The integration of information systems, inventory management, warehousing, material handling, packaging, transportation and security are crucial factors in the logistics sector. Favourable government trade policies have spurred greater demand for logistics services, offering existing vendors significant opportunities for expansion.

The Indian warehousing sector has experienced significant growth and transformation, driven by factors such as the expansion of e-commerce, infrastructure development, and regulatory reforms.

For the purpose of this study, the global logistics market has been divided into three segments: transportation type, logistic type, and end-user industry.

On the basis of the transportation type, the market is segmented into airways, waterways, railways, and roadways.

On the basis of logistic type, the market has been segmented into first party, second party and third party. The second-party logistics segment accounted for the largest market share.

By End-user, the market has been segmented into industrial and manufacturing, retail, healthcare, oil & gas, and others. Moreover, globalization coupled with population growth and consumption behaviour has seen ever-increasing demand for products from all corners of the world. The rise of e-commerce has added to the transport boom, and over the past decade, a considerable growth has been seen across the industrys value chain as a whole.

Outbreak of health calamities in the nature of epidemics and pandemics have forced one and all to reorganize their living pattern, restrict their personal movements and adopt the e-commerce culture for their daily needs.

WAREHOUSING SECTOR IN INDIA

The Indian warehousing markets projected growth to US$ 34.99 billion by 2027, with a robust CAGR of 15.64%, highlights its increasing importance in the global supply chain. This expansion reflects the rising demand for efficient logistics solutions, driven by factors such as e-commerce growth, urbanization, and industrial development. Companies are likely to invest in advanced warehousing technologies and infrastructure to keep pace with this rapid growth and to meet evolving customer needs. The sectors development also underscores the significant role of warehousing in enhancing supply chain efficiency and supporting economic growth. Modern warehouse facilities and technology-driven solutions have changed the warehousing sector in India in recent years. With increased demand and supply throughout the years, the Indian warehousing industry is gaining traction. The key players are third-party logistics (third-party logistics) and e- commerce enterprises, which are growing into tier 2 and 3 cities and eventually increasing their proportion of secondary marketplaces. Businesses are transitioning to a hub-and-spoke model while also implementing technology to simplify operations, with an eye on the larger picture of ease, efficiency, and sustainability.

Key Drivers:

E-commerce Boom: The surge in online shopping has increased demand for efficient warehousing solutions.

Urbanization and Population Growth: Rapid urbanization and a growing population are driving the need for more storage and distribution facilities.

Government Initiatives: Policies like the GST (Goods and Services Tax) have streamlined logistics and warehousing processes.

Q commerce Boom: Q - commerce thrives on frequent, smaller orders compared to traditional e- commerce. This translates to a significant increase in the total number of deliveries handled by logistics companies.

D2C: The rise of D2C (direct-to-consumer) brands in India is acting as a significant growth catalyst for the logistics industry. These brands, bypassing traditional retail channels, rely heavily on efficient delivery networks to reach their customers directly. This surge in D2C shipments translates to a higher volume of deliveries for logistics companies

Types of Warehouses:

Traditional Warehouses: Basic storage facilities used for bulk goods.

Modern Warehouses: Equipped with advanced technologies like automation, robotics, and IoT.

Cold Storage: Essential for perishable goods like food and pharmaceuticals.

Bonded Warehouses: Used for storing imported goods until customs duties are paid.

Key Locations:

Major Warehousing Hubs: Cities like Mumbai, Delhi, Bangalore, Chennai, and Hyderabad are key warehousing and logistics hubs.

Emerging Regions: Tier-2 and Tier-3 cities are becoming increasingly important due to rising regional demand and infrastructure development.

Grade A warehouses are modernized buildings created specifically to meet the needs of warehouse logistics. They feature the most up-to-date technology, superior building materials, a prime location, and a convenient traffic interchange. Grade B objects are outdated buildings that must be rebuilt to satisfy modern warehouse logistics standards.

Artificial Intelligence: The integration of digital technologies like AI and IoT is revolutionizing logistics by making operations more efficient and data-driven. AI is enabling real-time tracking, predictive analytics, and automated warehouse management, while automation?€”through robotics and autonomous vehicles?€”is boosting speed, accuracy, and overall supply chain efficiency.

Development:

The outsourced logistics services is driving the growth of the market. Imbalance between the available resources and the consumption pattern is leading to increasing imports and exports along with a huge demand for logistics services.

Strained trade relations of our country with few of its neighbours is compelling the manufacturers and traders to shift their manufacturing / trade hubs and thus leading to huge relocations.

The recent shift of huge chunk of population from urbans to rurals has created new demands in the logistic industry.

Rising demand for foreign goods in Indonesia, Thailand, and India has strengthened the trade relations with the U.S. Europe is another major region in the market. Germany, the U.K., and France are the major logistics markets.

Transportation and logistics infrastructure is a constantly recurring priority in every new government policies. Economic reforms and government initiatives in terms of strengthening the manufacturing sector are expected to attract private investment.

Work-from-home culture is giving new dimensions to the logistics industry.

Opportunities, Threats and Challenges Opportunities:

Emphasis on development of highways connecting various states is one such step. The GST regime is certain to expedite faster conversion of informal logistics setups to formal ones and speed up freight movement at interstate borders due to dismantling of check posts. There is a target to reduce the logistics cost in India from the present 13% -14 % of GDP to less than 0.08%

- 0.09% by 2030.

A new Logistics Division in the Department of Commerce has been established to coordinate integrated development of the sector by way of policy changes, improvement in existing procedures, identification of bottlenecks and gaps, and introduction of technology-based interventions. A concerted effort in collaboration with central line ministries and state governments is on to simplify the regulatory processes in domestic and export-import logistics.

The Logistic market is likely to witness good market growth rising at a 9.35 % CAGR during the global forecast period (2024 ?€“ 2030).

Launching of M-Parivahan mobile App and Pariwahan Sewa Portal.

Threats:

Availability of goods on-line and that too cheaper variants will reduce the need to relocate goods from one to another.

Increased work-from home and ease of work from anywhere will reduce movement of work force from one place to another.

Increased e-commerce leads to increased packaging requirements and eventually huge consumption of packaging materials such as paper and plastic. There would be huge pressure on our forests and other natural resources. Environmentalists would definitely not support it. Further, it may be nature-detrimental and irreparable damages in store for our next generations.

The writing is clear on the wall. The production of packaging materials consumes both natural and human resources. The application of those materials further uses more valuable resources. Finally, the disposal of packaging materials into landfills, incinerators, and, inappropriately, on the sides of countless highways and roads, waterways, seas and forests as litter, also requires the utilization of more valuable resources, most of which could have been used again, or differently. Unfortunately, Water bodies have turned into waste bins of our planet.

Challenges:

The dilemma is that as world population increases and world-wide distribution chains become more sophisticated, the corresponding increase in the use of packaging has the potential of becoming as much a problem as a solution. In some parts of the world, some poorly informed people would prefer a significant reduction, and in some cases, elimination of packaging. This regression is based on a lack of understanding of the overall impact that packaging has upon Society.

Actually, packaging has tremendous resource-saving potential. Clearly, over-packaging consumes too many resources. Under-packaging allows for damage and spoilage of contents, also wasting resources. The goal is "right size" and "right strength" packaging. It is the result of a holistic view that balances the proper use of resources against the environmental, social, and financial needs of packaging users and Society.

The facts are clear. The production of packaging materials consumes both natural and human resources. The application of those materials further uses more valuable resources. Finally, the disposal of packaging materials into landfills, incinerators, and, inappropriately, on the sides of countless highways and roads, waterways, seas and forests as litter, also requires the utilization of more valuable resources, most of which could have been used again, or differently.

The other challenges hindering its growth include high cost, underdeveloped material handling infrastructure, fragmented warehousing, presence of multiple regulatory and policy making entities, lack of seamless movement of goods across modes, and poor integration with modern information technology. These challenges, particularly the ones pertaining to procedural complexities, redundant documentations and involvement of several agencies at our ports and borders, severely dent our performance in international trade, resulting into about 70% of the delays.

Segment- wise performance

Revenue	2024-25	2023-24
Warehousing services	1126.11	1068.16
GTA Services	1032.16	711.69
International Shipments	225.98	214.63
Marketing Services	-	5.92
Total	2384.25	2000.40

Our packing and moving business is carried under brand name of Agarwal Packers and Movers which has become renowned name in household relocation across the country. Further, the brand Agarwal Packers and Movers is owned by DRS Logistics Private Limited and Mr. Anjani Kumar Agarwal is one of the Directors of the said company. Also, it is used by our relatives ("disassociated promoter group members"). In view of the consent terms executed, inter alia, between ours promoters and certain persons belonging to the said disassociated promoter group, on November 14, 2014, before the Company Law Board, Chennai, it has been agreed that both the families / groups shall have the right to use this tradename. However, over the last year few years, dispute has arisen again between the families. The matter, as of now, is pending before the NCLAT, Chennai. Hence, we continue to operate our packing and moving business under the brand Agarwal Packers and Movers.

For packing and moving services our Company owns composite container vehicle specially designed to suit the household shifting called CHAPP VAN (Car, Households, Artifacts, Plants and Pets). This new concept composite container vehicle supports transport of Car, Household, Artifacts, Plants and Pets all in one i.e. there is space demarcated for each and every item and ensures better safety and ease of handling varied items. There is also provision for one person to travel with the vehicle, in case the customer so desires.

Our Company has tie ups with some of the major corporate houses for our transporting services. In the year 2022, our Company became Indian Banks Association approved transport operator.

Our Company has strong customer base. Our established relationships with customers lead to stability of demand. Our top 10 customers for the Financial Year 2024-25 include MRF Ltd, Jindal Fibres Pvt Ltd,Eco Spin Yarn Pvt Ltd, Usha Yarn , Tata Consultancy Services Ltd, National Polyplast India Pvt Ltd,Vinishma Technologies Pvt Ltd, Birla Carbon India Pvt Ltd, Motherson Sumi Wiring India Pvt Ltd, Godrej & Boyceev Mfg Co ltd, Birla Carbon India Pvt Ltd, Pink World logistics, TTK Prestige Ltd, Rohim Semi Conductors India Pvt Ltd, GSM logistics, Rajasthan Delhi Transport Company etc.

Outlook

The Indian logistics and warehousing industries are expected to continue their robust growth, The booming e-commerce sector will remain a significant driver of warehousing and logistics demand. As e-commerce sales grow, the need for efficient, large-scale warehousing facilities and optimized logistics solutions will increase. driven by technological advancements, supportive government policies, While challenges such as infrastructure gaps and cost pressures remain, the overall outlook is positive, with numerous opportunities for investment and development. The sectors evolution will be shaped by continued innovation, increased focus on sustainability, and strategic infrastructure investments. The warehousing storage sector is growing even more rapidly, projecting a CAGR of 15.64% and a market size of USD 35 billion by 2027.

Risks and concerns

Large scale and prolonged agitations, such as the recent Farmers agitation near Delhi Haryana borders.

Cargo damages, personal injury claims may adversely affect the business

Constant Increase of fuel prices.

Lack of experienced drivers

Increase in taxes, significantly affect profits

The increase in the age of vehicles and an increase in the prices of new vehicles

Fog conditions, unpredictable rains and other weather related issues.

Natural calamities, such as cyclone, floods etc.,

Traffic disruptions etc.

Highly competitive industry

Competition to attract and retain labour

Dependency on third parties for supply of equipment and maintenance of vehicles.

The branches (including transshipment hubs) are located at leased premises.

Employee misconduct or errors could adversely affect our business prospects

Increase in costs of labour

Demand for services may decrease during an economic recession.

Increased tensions with neighbour countries.

Strengths:

Strong network scattered throughout the country

Diversified business portfolio

Negligible dependence on external debt

Large fleet of owned vehicles,

Experienced senior management

Strong customer base

Labour friendly policies

Internal Control systems and their adequacy

The Company has pan India presence, having branch offices, warehouses and hubs spread in different cities and towns. Keeping the said in view, we have adopted policies and procedures which enables implementation of appropriate internal financial controls across the organization. It ensures orderly and efficient conduct of business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanism, accuracy and completeness of accounting records, and timely preparation of reliable financial disclosures. Internal Financial Controls are an integral part of the Risk Management Process, addressing financial and financial reporting risks. The Internal Financial Controls have been documented, digitized and embedded in the business process.

Discussion on financial performance with respect to operational performance

Particulars	2024-25	2023-24
Revenue from operations	2384.25	2000.40
Other Income	39.68	49.23
Finance Costs	125.45	230.78
Depreciation	335.97	294.57
PAT	12.25	(248.49)

As observed in the table laid above, though the performance during the FY 2024-25 there is a increase in revenue, indicating strong operational performance. However, this positive growth was overshadowed by increased depreciation, but the finance costs was lower compared to previous financial year.

We have achieved an operational turnover of Rs. 2384.25 Lakhs and a nominal profit of Rs. 12.25 Lakhs for the FY 2024-25 as against an operational turnover of Rs. 2000.40 Lakhs and loss of Rs.

248.49 Lakhs for the FY 2023-24 .

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

We believe that our employees are key contributors to our business success. To achieve this, we focus on attracting and retaining the best possible talent. Our Company looks for specific skill-sets, interests and background that would be an asset for its kind of business. Our manpower is a prudent mix of the experienced and young people which gives us the dual advantage of stability and growth, whereas execution of services within time and quality. Our skilled resources together with our strong management team have enabled us to successfully implement our growth plans.

Our senior management is diversified and we have different operational heads to support operations such as accounting, booking orders, marketing, human resource management, and field work for packing and moving, finance related activities.

Additionally, we employ casual laborers and temporary laborers on daily wages as drivers and others for loading / unloading of the goods according to our requirements

Sr. No	Category	Number of employees as on 31.03.2025
1	Executive Director	1
2	Key Managerial Personnel (KMP)	2
3	*Other employees	10
	Total	13

* Total number of employees excludes drivers who are paid on daily wages basis.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous FY) in key financial ratios, along with detailed explanations:

S.No	Ratios	2024-25	2023-24	Explanation
1	Debtors Turnover	7.99	5.37	Increase in revenue from operations
2	Inventory Turnover	Not applicable
3	Interest Coverage Ratio	4.14	2.91	New loan taken during the year
4	Current Ratio	0.36	1.68	Increase expenses payables
5	Debt Equity Ratio	0.88	1.03
6	Operating Profit Margin (%)	19.71	25.88	Increase expenses	in	other
7	Net Profit Margin (%) or sector-specific equivalent ratios, as Applicable	0.01	-0.12	Increase expenses	in	other

Details of changes in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof

Particular	2024-25	2023-24	Explanation
Net worth ( In Lakhs)	2386.22	2373.97	Not much of a difference
Return on net worth (%)	0.51	(-) 10.47	Due to deferred tax because of de-merger of companies

DISCLOSURE OF ACCOUNTING TREATMENT:

In the preparation of financial statements, a treatment different from that prescribed in an Accounting Standard has not been followed. The financial statements represent a true and fair view of the underlying business transactions.

CAUTIONARY STATEMENT

This report contains forward-looking statements extracted from reports of Government Authorities / Bodies, Industry Associations etc. available on the public domain which may involve risks and uncertainties including, but not limited to, economic conditions, government policies, dependence on certain businesses and other factors. Actual results, performance or achievements could differ materially from those expressed or implied in such forward-looking statements. This report should be read in conjunction with the financial statements included herein and the notes thereto.

For and on behalf of the Board For DRS Cargo Movers Limited

Sd/- Anjani Kumar Agarwal Managing Director DIN:00006982	Sd/- Sanjay Agarwal Director DIN:00204750
Address: Plot No.25/a Janakpuri Colony Gunrock, Near Narne Estate Karkhana Hyderabad- 500009	Address: Plot No.25/a Janakpuri Colony Gunrock, Near Narne Estate Karkhana Hyderabad- 500009

Place: Hyderabad Date: 30.08.2025