Kesar Terminals & Infrastructure Ltd Management Discussions

BULK LIQUID STORAGE SCENARIO

The Bulk Liquid storage and handling Industry in the private sector acts as a dominant logistic partner in supply chain management framework for both - Primary manufacturers and downstream units in various industries such as petrochemicals, chemicals, synthetic fiber manufacturing, edible / non-edible vegetable oil refinery, power generation, food processing, pharmaceuticals etc. It also caters to the needs of traders of chemicals and edible/non-edible oils who import/export large parcels of these liquids.

The Indian Chemical Industry has a dominant role as a manufacturer of various chemicals for domestic consumption as well as for exports, particularly to the European market where there are restrictions for manufacture of lot of chemicals on safety, health and environment consideration.

This industry is further poised for growth on a regular basis with emphasis on "Make in India" programme of the Govt. of India and increased demand from domestic sector. The Port led modernisation planned for major ports in India would well support the handling of increasing volumes on a year-on-year basis.

In the recent years, domestic Oil Companies in the private sector have been hiring storage tanks particularly at port locations. This has been necessitated for the Private Oil Players in the Industry to optimize their logistics & transportation costs of Petro- leum products on PAN India basis. This trend is likely to continue and volumes will increase on a regular basis as the Country has got surplus refineries and therefore the imported crude & refined oil products need to be moved to all the corners of the country from the Port locations.

INDUSTRY STRUCTURE, DEVELOPMENT & OUTLOOK

Increasing urbanization and rise in per capita disposable income is resulting in a strong growth outlook for several key end use industries. The pandemic has also given opportunity to the Chemical Storage Terminals due to increased imports of rawmaterials for the Pharma Industries. So, this is going to positively impact the growth of Indian liquid bulk industry. Going ahead, liquid bulk trade volumes are set to grow at a rapid pace. The Governments thrust towards domestic manufacturing is expected to redefine the product flow patterns and to address the mismatch of production versus domestic demand, the export volumes will also keep on increasing.

OPPORTUNITIES & THREATS

As earlier mentioned, the Central Government is taking a number of progressive steps which would promote the growth of the Indian liquid bulk industry.

Increase in storage tank capacities at Kandla Port by various Terminal Operators have reduced the utilization in general andhave increased competition amongst the liquid Terminal Operators. There is a consortium formed, named AVTL, aggregating terminals of Aegis, Vopak & Friends with a total tankage of about 0.8 mMT in 240 tanks. Apart from this, Aegis has 0.2 mMT storage at Mumbai. This gives them leverage to dominate the market at Kandla.

The total thruput of the Kandla Terminals in the financial year 2025-26 was 0.62 MMTPA. The revenue in the financial year 2025-26 was Rs. 33.53Cr. The revenue enhanced due to increased imports and better commercial utilization of tanks in our terminals. The exports were reduced by 28% mainly due to an increase in flexi & iso tank requirement instead of bulk export. Both the Terminals lands lease with DPT have expired and so renewal of the leases are very crucial to keep the business continuity at Kandla. However, the matter is subjudice with Honble Supreme Court.

PERFORMANCE

The Company as on date operates only in one segment i.e. bulk liquid storage facility, the revenues of which for the current year stood at 3353.20 Lakhs as against 3278.28 Lakhs of previous year showing a Increase of 2.29%.

RISKS AND CONCERNS

Every business is exposed to a certain amount of risk and concerns some of which may be regulatory or change in policy pertaining to the business, economic parameters, trade policy and geo-political factors, market risk, governmental clearances and approvals, credit risk, which are difficult to foresee. Currently, the Company derives its share of revenue from its Bulk Liquid Terminals at Kandla, Gujarat.

Since, the Company is majorly dependent on these Terminals for its revenues, it is exposed to specific risks that are particular to its business and environment in which it operates. The Company manages these risks by following business and risk mitigation practices. The Company has in place a Risk Management Policy.

INTERNAL CONTROL SYSTEM

The Company has an appropriate internal control system for its various functions with the ultimate objective of improving the efficiency of operations, better financial management and compliance with the applicable laws.

The Audit Committee reviews the adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations.

The Statutory Auditors have also examined the internal financial controls of the Company and have submitted unmodified opinion on the adequacy and operating effectiveness of the internal financial controls over financial reporting as at 31st March, 2026.

The Company has appointed Independent Internal Auditors M/s. S. V. Shah & Associates, Chartered Accountants to carry out internal audit of its activities. The detailed internal audit reports are discussed at Iength at various level and thereafter the said reports are also placed before the Audit Committee for review and discussion on half yearly basis. No significant deficiency or material weakness in internal financial controls were identified as part of the audit.

FINANCIAL PERFORMANCE

The information relating to the financial performance of the Company is provided in the Directors Report.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company firmly believes that trained, talented and engaged employees are the critical differentiators and provide com- petitive advantage for sustaining and growing the business in the intensified spiral of global competition. As such, the Com- pany continues its focus on high performance, talent retention, employee engagement and focused approach for smooth organizational workflow. The Company has a total strength of 46 people as at 31st March, 2026.

KEY FINANCIAL RATIOS

PARTICULARS	F.Y. 2025-26	F.Y. 2024-25	REASONS FOR SIGNIFICANT CHANGE
Inventory Turnover Ratio	181.68	271.10	Due to increase in cost of services on account of increase in repairs during the year and also increase in stock
Interest Coverage Ratio	(48.82)	10.88	Due to loss on sale of subsidiary during the year
Current Ratio	1.65	0.60	Due to increase in investment in short term mutual funds
Debt-equity ratio	-	0.12	Due to decrease in outstanding loans due to repayments during the year
Operating Profit Margin	42.24%	46.50%	Due to increase in operating expenses during the year
Net Profit ratio	(95.31%)	11.62%	Due to loss on sale of subsidiary during the year
Return on investment	(90.00%)	0.02%	Due to higher return on investment in mutual funds during the year
Return on Capital employed	(42.22%)	11.71%	Due to loss on sale of subsidiary during the year
Return on net worth	(57.76%)	3.00%	Due to loss on sale of subsidiary during the year
Debt Service coverage ratio	-	1.98	Due to decrease in outstanding loans due to repayments during the year
Return on Equity Ratio /	(44.16%)	3.04	Due to loss on sale of subsidiary during the year
Return on Net Worth
Trade receivables turnover ratio	7.42	8.42	Due to increase in revenue during the year
Trade payables turnover ratio	3.52	3.91	There is no significant change
Net Capital Turnover ratio	28.51	(1.89)	Due to repayment of substantial short term borrowing during the year.

FORWARD LOOKING STATEMENT

The above Management Discussion and Analysis Report contain "forward looking statement" within the meaning of applica- ble laws, and regulations and is futuristic in nature. All statements that address expectations or projections about the future, including, but not limited to statements about the Companys strategy for growth, market position, expenditures and financial results are forward Iooking statements. The Companys actual results, performance or achievement could thus differ materially from those projected in any such forward looking statements. Investors are requested to make their own independent judgments before taking any investment decisions and the Company assumes no responsibility.

	For and on behalf of the Board of Directors
	Kesar Terminals & Infrastructure Limited
	Sd/-
	Harsh R Kilachand
Place: Mumbai	Executive Chairman
Date: 26.05.2026	DIN: 00294835