Lancer Containers Lines Ltd Management Discussions

Indian Logistics and NVOCC Industry

The global shipping and logistics industry continued to evolve during FY 2025-26 amid changing trade patterns, geopolitical uncertainties, technological advancements and increasing demand for resilient and efficient supply chains.

Security concerns affecting critical maritime routes, particularly the Red Sea, Bab el-Mandeb corridor and the Strait of Hormuz, highlighted the importance of route diversification, supply-chain visibility and operational flexibility for logistics service providers.

Indias logistics sector continued to benefit from growth in manufacturing, international trade, e-commerce and the formalisation of supply chains. Government initiatives such as PM GatiShakti, the National Logistics Policy, port-led development, Dedicated Freight Corridors and multimodal cargo terminals are strengthening connectivity and supporting the movement of containerised cargo. Expansion in port capacity and container traffic is also creating opportunities for NVOCC, freight-forwarding, container-management and integrated logistics services. Indias Major Ports handled approximately 915.17 million tonnes of cargo during FY 2025 26, representing year-on-year growth of 7.06%. Technology is transforming logistics operations through the adoption of Artificial Intelligence, Machine Learning, the Internet of Things, automation, data analytics and cloud-based platforms. These technologies support route planning, cargo consolidation, container deployment, automated documentation, real-time tracking, predictive asset management and improved resource utilisation. Smart and connected containers are also expected to enhance cargo visibility, condition monitoring and service reliability.

Sustainability and decarbonisation remain important priorities for the maritime industry. Developments in alternative fuels, energy-efficient vessels and environmental regulations may influence vessel capacity, freight costs, shipping-line operations and customer requirements across the logistics value chain.

Against this backdrop, Lancer Container Lines Limiteds established NVOCC operations, container capabilities and presence across India, the Middle East, Southeast Asia, Africa, the CIS region and Europe position it to participate in the growth of containerised trade and integrated logistics services. The Company remains focused on efficient container utilisation, trade-lane development, operational flexibility and strengthening its international network.

Opportunities and Threats Opportunities

The global logistics and non-vessel operating common carrier (NVOCC) sector continues to offer growth opportunities, supported by expanding international diversification,infrastructure development and increasing trade, supply-chain demand for integrated logistics services. Indias growing participation in global manufacturing and trade, together with ongoing investment in multimodal transport infrastructure, is expected to sustain demand for efficient and reliable cargo movement.

The Companys presence across India, the Middle East, Southeast Asia, Africa, the Commonwealth of Independent States (CIS) and Europe positions it to participate in evolving trade flows between emerging markets particularly those connecting the Indian subcontinent with the Middle East, Africa, Southeast Asia and the CIS region.

Key opportunities include:

- growth in Indias manufacturing base and international trade, supported by deeper integration with global supply chains; - expansion of India-Middle East, India-Africa, India-Southeast Asia and India-CIS trade corridors; seeking alternative sourcing and distribution locations; supply-chain diversification

- increased movement of containerised and project cargo, supporting demand for NVOCC, freight-forwarding, container-management and multimodal services; - development of ports, Dedicated Freight Corridors, inland waterways and multimodal logistics facilities, which should improve connectivity and cargo evacuation;

adoption of automation, real-time shipment visibility, data analytics and artificial intelligence to enhance planning, asset utilisation, service quality and operating efficiency;

- strategic partnerships and international subsidiaries that provide local market access and destination capabilities; and - expansion in Southeast Asia, including the Companys strengthened presence in Indonesia and the resulting potential to develop intra-Asian and India-Southeast Asia trade flows.

Threats

The industry remains sensitive to geopolitical developments, trade restrictions, economic cycles and volatility in freight and fuel costs. Disruptions to major shipping routes may lengthen transit times, constrain capacity and increase insurance, fuel and operating costs. Container imbalances can also raise repositioning expenses and reduce asset utilisation, particularly on developing trade lanes.

Operations across multiple jurisdictions expose the Company to differing customs, taxation, maritime, environmental, labour and trade requirements, as well as currency and country-specific risks. Other external challenges include port congestion, inland-connectivity constraints, intensifying competition, rapid technological change, cyber threats and progressively stringent sustainability requirements.

The Company seeks to moderate the impact of these factors through geographic and trade-lane diversification, flexible container deployment, local partnerships, disciplined commercial practices and continuous monitoring of market and regulatory developments.

Outlook

The medium to long-term outlook for Indias logistics sector remains favourable. Growth in manufacturing, international trade, e-commerce and organised supply chains, together with continued formalisation and digitalisation, is expected to support demand for integrated logistics services. Public investment in Dedicated Freight Corridors, ports, coastal infrastructure, inland waterways and multimodal logistics facilities should further improve freight connectivity and supply-chain The global operating environment is likely to remain uncertain in the near term. Geopolitical tensions, route disruptions and fluctuations in freight rates, fuel prices, currencies and container availability may continue to affect volumes, transit times and margins. At the same time, these conditions are encouraging customers to diversify supply chains and seek flexible logistics partners with strong regional networks.

Against this backdrop, the Company intends to deepen its presence in priority trade corridors and strengthen its Middle East and Southeast Asian operations. It will continue to focus on improving container utilisation, operational customer service, partnerships and its international network.

Subject to the external uncertainties described above, the Company remains cautiously optimistic about the sectors prospects and believes that its diversified network and integrated capabilities position it to pursue sustainable growth.

Risks and Concerns

The logistics and NVOCC business is exposed to operational, financial,geopolitical, regulatory, technological and market risks. The Companys international footprint requires a structured approach to identifying, assessing and managing these exposures.

The Company has adopted a Risk Management Policy under which material risks are evaluated with reference to their likelihood, potential impact and existing controls. The framework is reviewed periodically by management and the relevant governance bodies, including the Risk Management Committee and Audit Committee, under the oversight of the Board of Directors.

The principal risks and the Companys mitigation approach are summarised below:

- Geopolitical and trade risk: Conflicts, sanctions, trade-policy changes and disruptions to shipping corridors may affect volumes, capacity, routing, transit times and costs. The Company monitors developments across key markets and uses alternative routes and trade-lane diversification where practicable.

- Freight-rate and fuel-price risk: Movements in ocean freight rates, bunker prices and related transport costs may affect margins. Pricing, routing, procurement and capacity utilisation are reviewed in response to market conditions.

- Container availability and utilisation risk: Imbalances in cargo flows may lead to equipment shortages, idle inventory or higher repositioning costs. The Company focuses on fleet planning, container rotation and deployment across its network.

- Foreign exchange, credit and liquidity risk: Multi-currency operations expose the Company to exchange-rate movements, changing credit conditions, delayed collections and counterparty default. Financial controls, credit evaluation and receivables monitoring are used to manage these exposures.

- Regulatory and compliance risk: Changes in customs, maritime, taxation, environmental, labour and trade regulations may increase costs or disrupt operations. The Company maintains compliance processes and statutory monitoring across the jurisdictions in which it operates.

- Operational and infrastructure risk: Port congestion, vessel delays, equipment constraints and interruptions to inland transport may affect service delivery. Operational planning, service-provider networks, route alternatives and contingency arrangements support continuity.

- Technology and cybersecurity risk: Dependence on digital systems creates exposure to outages, cyber incidents, data loss and unauthorised access. The Company continues to strengthen technology controls, data protection and system resilience.

- Health, safety and environmental risk: Cargo handling and transportation involve workplace-safety and environmental obligations. The Company promotes safe operating practices, employee welfare and compliance with applicable requirements.

- Business continuity risk: Natural disasters, pandemics, cyber incidents, port closures and other unforeseen events may interrupt operations. Business-continuity and recovery measures are maintained for critical activities.

The risk profile and the effectiveness of mitigation measures are reviewed on an ongoing basis. The Company remains focused on strengthening internal controls, technology capabilities, operational resilience and contingency planning while supporting disciplined growth.

Internal Control Systems and Their Adequacy

The Company maintains an internal control framework commensurate with the nature, scale, complexity and geographic reach of its operations. The framework is designed to provide reasonable assurance regarding operational effectiveness, reporting, prevention and detection of errors and irregularities, and compliance safeguarding of assets, reliability of financial with applicable laws, policies and procedures.

The internal control framework covers key financial, operational and compliance processes. Defined procedures, authority levels and appropriate checks and balances support accountability and informed decision-making.

An independent internal audit firm M/s C V Pagariya & Associates conducts periodic audits, and significant observations and recommendations are reviewed by management and the Audit Committee for appropriate action.

The internal control systems are reviewed in the context of the Companys operations and applicable requirements.

Discussion on Financial Performance with Respect to Operational Performance and Segment-wise Performance and key financial ratios

Total Income consolidated amounted to 43,060.81 lakhs compared to 71,458.68 lakhs in the previous financial year. The profit before tax amounted to 642.23 lakhs compared to 135.69 lakhs reported last financial operates primarily in the NVOCC (Non-Vessel Operating Common Carrier) Shipping & Logistics segment. During the financial year, our gross domestic sales Standalone amounted to 5,850.66 lakhs compared to 38,985.45 lakhs of the financial ratios including debtors turnover, inventory turnover, interest coverage, previous financial current ratio, debt equity ratio, operating profit margin, net profit margin and return on net worth are given in Note 17 to the Audited Accounts.

Financial Snapshot:

Particulars ( Cr)	FY26	FY25	FY24
Revenue from Operations	394.03	699.13	633.41
EBITDA	0.57	15.04	88.10
EBITDA MARGIN %	0.14%	2.15%	13.91%
PAT	5.63	(0.35)	58.37
PAT MARGIN %	1.43%	-	9.21%

Consolidated revenue from operations during FY 2025 26 stood at 394.03 crore compared with 699.14 crore in FY 2024 25. The movement was primarily attributable to decline in revenue due to geopolitical issues. EBITDA stood at 0.57 crore compared with 15.04 crore in the previous year, with EBITDA margin changing from 2.15% to 0.14%

Human Resources and Industrial Relations

The Company regards its employees as central to sustainable growth and operational excellence. As on March 31, 2026, the Company had 112 employees.

Human-resource practices are directed towards attracting and retaining talent, recognising performance and building capabilities relevant to logistics operations, technology, compliance, customer service and international trade. Training and development initiatives are aligned with functional requirements and identified competency needs. The Company also promotes accountability, collaboration, continuous learning and operational discipline across its workforce.

Industrial relations remained cordial and constructive during the year. The Company remains committed to providing a safe, inclusive and professional workplace and to supporting employee well-being and engagement. The Board acknowledges the dedication and contribution of employees to the Companys performance and long-term development.

Cautionary Statement

This Management Discussion and Analysis may contain forward-looking statements within the meaning of applicable securities laws and regulations. Such statements reflect the Companys current expectations, assumptions, estimates and projections concerning future events and business performance and do not constitute guarantees of future results.

Actual results, performance or achievements may differ materially from those expressed or implied due to changes in domestic or international economic conditions, global trade and shipping markets, geopolitical developments, freight rates, fuel prices, government policies, laws and taxation, foreign exchange rates, competition, technology, supply-chain conditions and other risks and uncertainties affecting the Company or the logistics industry.

The Company undertakes no obligation to publicly update or revise any forward-looking statement to reflect subsequent events or circumstances, except as required by applicable law.