Exim Routes Ltd Management Discussions

A. INDUSTRY STRUCTURE AND DEVELOPMENTS

The global trade environment continued to witness significant changes during the year under review due to evolving geopolitical conditions, fluctuations in commodity prices, changes in foreign exchange rates, supply chain realignments, and changing customer requirements.

The international trade and export-import sector remains an important contributor to economic growth, facilitating movement of goods, expansion of markets, and integration of businesses across geographies. Businesses operating in this sector are required to continuously adapt to changing regulations, logistics challenges, digital transformation, and customer expectations.

Exim Routes Private Limited operates in the international trade ecosystem, focusing on providing solutions and opportunities relating to import-export activities. The Company continues to evaluate market opportunities, strengthen business relationships, and explore avenues for sustainable growth.

B. BUSINESS OVERVIEW

A major strategic milestone during the financial year ended March 31, 2026, was the successful completion of the Companys Initial Public Offer (IPO) of 4,969,600 equity shares (face value Rs5 each) at an issue price of Rs88 per share. The shares were officially listed on the National Stock Exchange of India Limited (NSE) on December 19, 2025.

During FY 2025-26, EXIM Routes Limited successfully completed the development of Phase 2 of its proprietary AI-enabled B2B platform—Exim Routes Intelligence System ("ERIS"). Following its completion, an amount of Rs935.48 lacs was capitalized from Intangible Assets Under Development to Intangible Assets

Key Features & Capability Upgrades of ERIS:

- Demand & Supply Aggregation & Bidding

- Integrated Freight Pricing

- Multi-Channel AI Integration

- Cross-Platform Access

The Company continued its efforts towards developing and strengthening its business operations in the areas of international trade and related activities.

The Companys focus remains on:

- Developing sustainable business relationships with domestic and international customers;

- Identifying suitable opportunities in global markets;

- Improving operational efficiency;

- Maintaining compliance with applicable laws and regulations; and

- Creating long-term value for stakeholders.

The Company continues to monitor market trends and adopt appropriate strategies to enhance its competitiveness.

Financial Performance Review

Revenue & Operations

- Revenue from Operations: Escalated dramatically by 298.89% to Rs7,639.88 lacs in FY 2025-26, compared to Rs1,915.26 lacs in FY 2024-25.

o Domestic Sales: Rs7,068.56 lacs (Products) + Rs117.10 lacs (Services).

o International Sales: Rs454.22 lacs (Services).

- Total Income: Stood at Rs7,672.55 lacs (including Other Income of Rs32.67 lacs).

Expenses & Cost Structure

- Purchase of Stock-in-Trade (Paper): Rose to Rs6,615.25 lacs from Rs1,152.81 lacs in the previous year, reflecting the significantly higher trading volumes (42,458.28 MT in FY26 vs. 6,316.04 MT in FY25).

- Employee Benefits Expense: Lowered slightly to Rs116.85 lacs (FY 2024-25: Rs129.37 lacs).

- Finance Costs: Increased to Rs88.83 lacs (FY 2024-25: Rs22.34 lacs), driven by short-term working capital borrowings and interest on taxes.

- Other Expenses: Stood at Rs208.61 lacs (FY 2024-25: Rs126.18 lacs), primarily driven by legal and professional fees (Rs79.83 lacs) and business promotion expenses (Rs22.63 lacs).

Profitability

- Profit Before Tax (PBT): Expanded by 26.59% to Rs601.33 lacs from Rs475.02 lacs in FY 2024-25.

- Profit After Tax (PAT): Increased by 26.93% to Rs448.80 lacs from Rs353.58 lacs in FY 2024-25.

- Basic & Diluted Earnings Per Share (EPS): Increased to Rs2.95 per share (face value Rs5) compared to Rs2.74 per share in FY 2024-25.

Financial Position Highlight (as of March 31, 2026)

- Net Worth / Shareholders Funds: Grew significantly to Rs5,728.63 lacs (Share Capital: Rs937.60 lacs; Reserves & Surplus: Rs4,791.03 lacs), up from Rs1,559.95 lacs in FY 2024-25. This primary expansion was driven by IPO proceeds generating a securities premium addition of Rs4,124.78 lacs (net of issue expenses of Rs653.38 lacs).

- Trade Receivables: Increased to Rs3,633.18 lacs from Rs861.57 lacs, aligning with the expanded turnover scale.

- Capital Work in Progress: Recorded at Rs666.27 lacs for ongoing corporate office infrastructure expansions.

- Cash & Bank Balances: Stood robust at Rs1,564.96 lacs (including Rs1,400.00 lacs in short-term bank deposits).

Cash Flow Summary

- Operating Activities: Operating cash flow prior to working capital changes was positive at Rs666.40 lacs. Net cash used in operations was Rs(1,544.89) lacs due to significant working capital deployment in trade receivables.

- Investing Activities: Net cash outflow was Rs(1,343.62) lacs, mainly directed toward property, plant, equipment, and platform development costs (Rs1,146.92 lacs) alongside strategic investments in foreign subsidiaries (Rs199.72 lacs).

- Financing Activities: Net cash inflow reached Rs4,264.69 lacs, primarily powered by net proceeds from the IPO capital raise (Rs3,719.88 lacs) and short-term credit lines.

Key Financial Ratios & Analysis

The table below outlines the core financial metrics and explanations for significant variances (>25%) in accordance with statutory requirements:

Ratio Metric	FY 2025-26	FY 2024-25	YoY Change (%)	Primary Drivers / Explanation PDF
Current Ratio	3.00	3.53	-15.13%	Lower relative ratio due to increased trade payables and short-term debt.
Debt-Equity Ratio	0.18	0.20	-11.48%	Debt levels remained low relative to the expanded equity base post-IPO.
Debt Service Coverage Ratio (DSCR)	3.34	12.38	-73.01%	Increase in short-term debt service requirements relative to earnings.
Return on Equity (ROE)	11.56%	39.55%	-70.77%	Substantial increase in equity capital base post-IPO diluted single-year percentage return.
Trade Receivables Turnover	3.40	3.87	-12.14%	Scaled revenue increased year-end uncollected balances proportionally.
Trade Payables Turnover	11.76	11.02	6.72%	Efficient payables turnover operating cycle.
Net Profit Margin (%)	5.87%	18.46%	-68.18%	Shift in revenue mix towards higher volume, lower-margin paper trading.
Return on Capital Employed (ROCE)	11.02%	29.19%	-62.25%	Expanded capital base following IPO proceeds allocation.
Return on Investment (ROI)	5.71%	15.91%	-64.08%	Balance sheet expansion (asset growth) outpaced short-term earnings realization.

C. RISK MANAGEMENT & STRATEGIC MITIGATION ANALYSIS

An analysis of EXIM Routes Limiteds enterprise risk profile highlights the major operational, financial, market, and compliance risks inherent to global recyclable paper trading, along with the strategic mechanisms deployed to mitigate them.

Foreign Exchange & Currency Volatility Risk

Risk Exposure

Because international transactions span multiple geographic regions—including North America, Europe, the United Kingdom, Singapore, and South Africa—the business incurs trade obligations and receivables across multiple foreign currencies. Unhedged cross-border trade flows leave profit margins vulnerable to adverse exchange rate movements between order placement, shipment, and final settlement.

Mitigation Strategy

- Treasury Oversight: Active monitoring of global forex trends and currency basket movements to time trade conversions effectively.

- Natural Hedging: Matching foreign currency liabilities with foreign currency earnings across international subsidiaries to reduce net open exposure.

- Centralized Logistics Clearing: Utilizing centralized international hubs to standardize trade settlements and streamline currency risk handling.

Supply Chain, Logistics & Commodity Price Risk

Risk Exposure

The global waste paper trade relies heavily on ocean freight, port efficiency, and regional supply-demand balance. Geopolitical disruptions, container shortages, freight rate spikes, or sudden drops in paper mill demand can instantly shrink margins or lead to inventory holding risk.

Mitigation Strategy

- ERIS B2B Digital Platform: Deployment of the Exim Routes Intelligence System (ERIS) enables real-time price discovery, automated demand-supply aggregation, and integrated freight forwarder logistics.

- Predictive Market Analytics: Utilizing AI-driven price prediction tools to anticipate market dynamics and lock in viable trade margins prior to order execution.

- Asset-Light Procurement Model: Sourcing materials directly against backed buyer orders to minimize inventory holding periods and lower exposure to sudden market price drops.

Operational & Working Capital Risk

Risk Exposure

Rapid operational expansion and increasing trading volumes demand continuous liquidity to support working capital requirements. Extended transit periods in global trade, coupled with growing trade receivables, create cash flow gaps between supplier disbursements and customer realizations. Insufficient liquidity or high dependence on single-source funding can restrict order execution scale and strain operational stability.

Strategic Mitigation Framework

1. Invoice Financing Partnerships & Liquidity Diversification

o Partner Onboarding (Credlix): Onboarded Credlix as the Companys first invoice financing partner, establishing an initial credit facility size of up to Rs2.50 Cr.

o Tranche Disbursement: An initial tranche of Rs50.00 lacs has already been disbursed under this facility, unlocking liquidity tied up in trade receivables and accelerating cash conversion cycles.

2. Anchor-Backed Supply Chain Financing

o MoU with Oxyzo Financial Services: Executed a Memorandum of Understanding (MoU) with Oxyzo Financial Services Limited to establish structured supply chain financing solutions for Exim clients.

o Exim Routes as Anchor: Functions as the anchor platform, enabling Oxyzo to discount trade invoices raised on distributors and extend tailored credit facilities directly to buyers. This reduces direct counterparty credit exposure while ensuring seamless material flow and prompt working capital realization for the Company.

3. Diversified Banking Facilities & Operational Alignment

o Multi-Tier Debt Facilities: Maintaining active banking relationships, secured overdraft facilities, and short-term credit lines across multiple financial institutions to back institutional trading requirements.

o Synchronized Payables/Receivables Cycle: Aligning buyer collection windows with supplier credit schedules via automated platform verification to maintain steady operational cash flow generation.

D. FUTURE OUTLOOK & OPPORTUNITIES

Digitalization of Global Recyclable Trade Ecosystem

The global waste paper and recycled fiber industry is transitioning from traditionally fragmented, paper-heavy procurement processes toward streamlined, tech-driven supply chains. EXIM Routes Limited is strategically positioned to lead this transformation through its proprietary platform, the Exim Routes Intelligence System (ERIS).

By creating a unified digital marketplace, the ERIS mobile and web platforms connect paper mills, traders, and waste paper yards onto a single operational network. Key future growth drivers within this digital ecosystem include:

- End-to-End Trade Automation: Digitalizing critical trade documentation, shipping workflows, and customs-related paperwork to reduce operational friction and administrative turnaround times.

- Transparent Quality & Inventory Mapping: Enabling waste paper yards and suppliers to list exact paper grades, quantities, moisture levels, and quality specifications, allowing paper mills to source raw materials with enhanced transparency and minimal inspection disputes.

- Intelligent Price Discovery & Matchmaking: Utilizing automated bidding, demand-supply aggregation, and integrated freight tools to provide real-time price discovery and efficient order matching across domestic and international trade routes.

Strategic Priorities for Long-Term Value Creation

To capture these industry opportunities and sustain operational momentum, the Company will focus on three main operational priorities:

1. Accelerated User Acquisition: Onboarding paper mills, regional yards, and international scrap suppliers, logistics partners, invoice financing partners and banking partners onto the ERIS app to drive network effects and trading volume.

2. Infrastructure & Tech Scaling: Upgrading AI capabilities, cloud infrastructure, and mobile interface tools to support cross-border user bases and high transaction flows.

3. Working Capital Optimization: Utilizing structured asset-light procurement and supply chain financing partnerships to support expanding trade volume while maintaining high capital efficiency.

Monetization of Platform Services

Beyond core physical trading, the ERIS platform unlocks scalable digital revenue streams and value-added service models:

- Fintech & Supply Chain Financing Integration: Leveraging partnerships with invoice financing and supply chain credit providers (such as Credlix and Oxyzo) to offer embedded working capital solutions directly to mills and suppliers within the app ecosystem.

- Logistics & Freight Forwarding Services: Expanding integrated freight booking and dynamic logistics tracking tools, allowing traders and mills to lock in competitive freight rates directly through the platform.

- Data-Driven Insights & Analytics: Utilizing AI-driven price prediction tools to provide market intelligence and trend forecasts, empowering platform participants to make data-informed procurement decisions

E. OUR STRENGTHS

Proprietary AI-Driven Technology Ecosystem (ERIS)

The Companys proprietary platform, Exim Routes Intelligence System (ERIS), serves as a core technology driver across the waste paper trading landscape. By offering a seamless B2B interface, ERIS connects paper mills, traders, and waste paper yards onto a single digital network.

Intelligent Price Discovery: Incorporates an AI-enabled price prediction tool and automated bidding modules to provide real-time price discovery and forecast market dynamics.

End-to-End Operational Integration: Streamlines demand-supply aggregation, trade documentation, and integrated freight forwarding logistics into unified mobile and web workflows.

Diversified Global Sourcing & Distribution Footprint

Intelligent Price Discovery: Incorporates an AI-enabled price prediction tool and automated bidding modules to provide real-time price discovery and forecast market dynamics.

End-to-End Operational Integration: Streamlines demand-supply aggregation, trade documentation, and integrated freight forwarding logistics into unified mobile and web workflows.

F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

As required under Section 134(3)(q) of the Companies Act, 2013 read with Rule 8(5)(viii) of Companies (Accounts) Rules, 2014 the Company has in place proper and adequate internal financial control system commensurate with the size, scale, complexity and nature of its business operations. The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

The internal financial control systems of the Company are monitored and evaluated by the Directors with senior management on need based periodicity, deviations are identified and corrective actions are taken, wherever necessary. Present internal financial control measures are tested over time and no reportable material weakness in the design or operation was observed.

ACKNOWLEDGEMENT

Your Directors wish to express their appreciation to the continued and kind co-operation received from the Banks, Government Authorities, Customers, Vendors and Shareholders during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed service of the Executives, staff and Workers of the Company. We look forward for the continued support of every stakeholder in the future.

For and on behalf of the Board

EXIM ROUTES LIMITED

Sd/-

Manish Goyal

Director & CEO

DIN: 08126341

Sd/-

Pallav Singal

Director

DIN:03143594

Sd/-

Anshul Bansal

Chief Financial Officer

Sd/-

Richa Anand

Company Secretary & Compliance Officer