MFL India Ltd Management Discussions

Overview

MFL India Limited is a premier transport and logistics company with Pan-India coverage; having a self-owned fleet of mixed variety high-volume / heavy-weight cargo carriers; along-with a diversified portfolio of transportation services that includes dedicated high-capacity trucks, trailers.

MFLs logistics portfolio includes freight management, cargo brokerage, inter-modal is provided through MFLs domestic networked companies and include ocean, air and ground transportation.

The main commodities transported are retail store merchandise, 2- wheeler motorcycles / scooters, consumer products, FMCGs, other manufactured products and grocery products.

Industry Structure

The Indian logistics industry is a critical enabler of economic activity, acting as the backbone of domestic and international trade. It encompasses a broad range of services, including transportation (road, rail, air, and sea), warehousing, freight forwarding, customs clearance, and supply chain management.

Highly Fragmented Sector: The industry remains largely unorganized, with a multitude of small and medium players operating alongside organized logistics companies and third-party logistics (3PL) providers.

Road Transport Dominance: Road transport accounts for nearly 60-65% of freight movement, followed by railways, coastal shipping, and air freight.

Government Involvement: Several infrastructure and policy initiatives such as the PM Gati Shakti Master Plan, National Logistics Policy (2022), and Bharatmala and Sagarmala projects are aimed at improving multimodal connectivity and logistics efficiency.

Development of transportation and logistics-related infrastructure such as dedicated freight corridors, logistics parks, free trade warehousing zones, and container freight stations are expected to improve efficiency. Government reform initiatives, promotion of manufacturing and trade, improving investment climate are expected to transform the industry and drive growth between 2020 and 2025.

Economic reforms, trade cooperation, improved transportation infrastructure, and industrial growth is ushering in increasing opportunities for the logistics service providers (LSPs) in India. Presently, the Indian logistics industry is witnessing development and expansion of its existing infrastructure, emergence of e-commerce specific logistics solutions, has a strong focus on manufacturing, but also has a large presence of unorganized service providers.

Key trends observed in the Indian logistics industry are:

1. Digitization and Technology Integration:

Growing adoption of technologies such as GPS tracking, RFID, AI/ML, and

blockchain in supply chain visibility, fleet management, and warehousing.

Emergence of tech-enabled logistics startups and digital freight platforms.

2. 3PL and 4PL Growth:

Increased outsourcing of logistics to 3PL/4PL providers for cost efficiency,

scalability, and expertise in last-mile delivery and inventory optimization.

3. Rise of E-Commerce Logistics:

Surge in e-commerce and quick commerce has driven massive growth in last-

mile delivery services, especially in Tier 2 and Tier 3 cities.

4. Sustainability Focus:

Shift towards electric vehicles (EVs), green warehouses, and ESG-compliant

operations due to environmental and regulatory pressures.

5. Infrastructure Modernization:

Development of dedicated freight corridors (DFCs), logistics parks, inland

waterways, and multimodal logistics hubs to enhance connectivity and reduce

cost.

6. Regulatory Reforms and Ease of Doing Business:

Implementation of GST and e-way bill system has streamlined interstate

logistics and reduced transit times.

Launch of the Unified Logistics Interface Platform (ULIP) to bring

transparency and efficiency to logistics operations.

India stands alone as an island of hope in an otherwise volatile, and uncertain, global economy. Recent policy initiatives and regulatory changes pursued by the government are aimed at accelerating Indias GDP growth to 7.36% and beyond, in the near future. The logistics industry will be a direct beneficiary of this growth momentum. Equally, the ultimate winner within the logistics industry will be one who is able to outpace competition by delivering on the ever-increasing demands of service, quality, and cost in both B2B and B2C sectors.

Industry Development and Recent Scenario

Robust Growth Trajectory:

The Indian logistics sector was valued at around USD 280 billion in 2023 and is expected to grow at a CAGR of 8 10%, driven by rising consumption, urbanization, and global trade expansion.

National Logistics Policy (NLP) Impact:

The NLP aims to reduce logistics cost from the current 13 14% of GDP to single digits (~8%), aligning with global standards. Implementation is expected to streamline processes and enhance competitiveness.

Supply Chain Realignment Post-COVID:

Post-pandemic, companies have restructured supply chains to be more resilient, with greater emphasis on just-in-case inventory strategies and nearshoring practices.

Increased FDI and Strategic Partnerships:

The sector has witnessed growing foreign direct investment (FDI) and strategic collaborations in warehousing, cold chain, and 3PL services.

Cold Chain and Pharma Logistics Expansion:

Growing demand for healthcare, perishable foods, and vaccines has led to increased investment in cold chain infrastructure.

Global Trade and Exports Boost:

Indias growing role in global trade, including the "Make in India" and "PLI" schemes, has augmented demand for efficient cross-border logistics solutions.

The Indian logistics sector today encompasses both inbound and outbound segments of the manufacturing and services supply chains, playing a crucial role in the seamless movement of goods across the country and globally. In recent years, the sector has gained significant attention from both industry stakeholders and policymakers, given its strategic importance in driving trade, improving market access, and enhancing overall economic productivity.

While substantial progress has been made in policy support and infrastructure development, the strategic management of logistics infrastructure a key differentiator in global competitiveness has historically received less focus. However, this is gradually changing with the emergence of integrated logistics solutions, technology adoption, and private-public collaboration in infrastructure projects.

Inadequate logistics infrastructure, including fragmented warehousing, poor multimodal connectivity, and inefficiencies in transportation, continues to pose challenges. These bottlenecks not only increase transit times and costs but also impede the growth potential of the broader economy. Delays and inconsistencies in logistics impact the reliability and responsiveness of supply chains, affecting both domestic distribution and international trade competitiveness.

However, logistics management has the potential to bridge these gaps. Efficient logistics practices can, in the short term, help businesses mitigate the adverse impacts of infrastructure constraints through optimized routing, consolidated shipments, and technology-led planning. In the long term, robust logistics systems serve as a strategic enabler, enhancing supply chain agility, reducing costs, and fostering sustainable growth.

The sector is currently at an inflection point, with a mix of challenges and emerging opportunities:

On the one hand, it faces issues such as regulatory fragmentation, lack of standardization, high cost-to-GDP ratio, and labor skill shortages.

On the other hand, it benefits from a growing economy, rising e-commerce demand, government policy thrust, and advancements in digital technology.

As India aims to position itself as a global manufacturing and export hub, the development of an efficient, reliable, and technology-driven logistics ecosystem will be instrumental in unlocking its full economic potential.

Challenges Faced by the Recent Logistic Industry in India

1. High Logistics Cost as a Percentage of GDP

Indias logistics cost remains high at 13 14% of GDP, compared to 8 9% in developed countries.

This reduces the global competitiveness of Indian goods, particularly in exports.

2. Fragmented and Unorganized Sector

A large portion of the industry is unorganized, with numerous small transporters, warehouse operators, and brokers.

Lack of standardization and coordination leads to inefficiencies in supply chain management.

3. Inadequate Infrastructure

Underdeveloped multimodal infrastructure, including poor road quality, limited rail connectivity for freight, and underutilized inland waterways.

Congestion at ports, lack of last-mile connectivity, and insufficient logistics parks worsen the situation.

4. Lack of Integrated Technology Adoption

Limited use of digital tools, automation, and data analytics by small and medium logistics players.

Absence of real-time visibility, inventory tracking, and route optimization hinders operational efficiency.

5. Regulatory and Compliance Burden

Complex regulatory environment, with multiple agencies involved in logistics operations (e.g., transport, customs, warehousing).

Delays due to non-uniform state-level road taxes, permits, and compliance requirements.

6. Skilled Manpower Shortage

Lack of trained and skilled personnel in areas like supply chain analytics, fleet management, and cold chain operations.

Low productivity and poor customer service due to inadequate workforce capabilities.

7. Inefficient Urban Logistics and Last-Mile Delivery

Urban congestion, traffic restrictions, and lack of delivery-friendly infrastructure hamper last-mile efficiency.

The surge in e-commerce and quick commerce has further strained last-mile logistics systems.

8. Poor Cold Chain Infrastructure

Inadequate temperature-controlled warehousing and transport affects the distribution of perishable goods and pharmaceuticals.

High spoilage and wastage due to gaps in cold chain connectivity.

9. Slow Pace of Policy Implementation

While policies like National Logistics Policy and PM Gati Shakti are well-intentioned, execution delays and coordination gaps across departments slow down their impact.

10. Environmental and Sustainability Pressures

High carbon emissions due to over-dependence on road transport and outdated fleets.

Growing pressure to transition to green logistics, including electric vehicles and eco-friendly warehouses, requires substantial investment.

11. Low Warehouse Quality and Storage Inefficiencies

Many warehouses are non-compliant with modern standards, lack automation, and are built with minimal regard for location efficiency or inventory management systems.

12. Lack of Real-Time Data Sharing and Visibility

Poor interconnectivity between stakeholders (shippers, carriers, ports, and regulators) restricts smooth cargo movement and tracking.

Solutions to Some of the Challenges

1. Reducing Logistics Costs Solution:

Promote multimodal logistics by developing rail, inland waterways, and coastal shipping to reduce dependence on road transport.

Encourage adoption of digital freight matching platforms and consolidated load planning to improve vehicle utilization and reduce empty runs.

Implement tax incentives for logistics efficiency and integration of services.

2. Formalizing the Fragmented Sector Solution:

Introduce standard operating procedures (SOPs), certifications, and training for small logistics players.

Promote aggregation platforms and cooperative models to bring small operators under organized networks.

Provide financial support and credit facilities for small fleet operators and warehousing businesses.

3. Infrastructure Development Solution:

Accelerate the implementation of Dedicated Freight Corridors (DFCs), logistics parks, multimodal terminals, and Grade-A warehousing.

Improve last-mile connectivity through urban logistics hubs and feeder road upgrades.

Fast-track completion of Bharatmala and Sagarmala projects for road and port linkages.

4. Technology Integration Solution:

Encourage widespread use of Transportation Management Systems (TMS), Warehouse Management Systems (WMS), IoT, and AI for real-time tracking, route optimization, and predictive maintenance.

Foster logistics tech startups and digital innovation through incubation programs and FDI-friendly policies.

Government-led digital platforms like ULIP (Unified Logistics Interface Platform) must be promoted and adopted industry-wide.

5. Regulatory Simplification Solution:

Create a single-window clearance system for logistics operations involving customs, transport, and compliance authorities.

Uniformity in state-level regulations, permits, and taxation to ease inter-state movement of goods.

Digitalize all documentation and compliance reporting through government portals.

6. Addressing Skilled Manpower Shortage Solution:

Set up sector-specific skill development centers through partnerships with NSDC (National Skill Development Corporation).

Introduce logistics management programs in technical and vocational institutions.

Encourage on-the-job training and certification for drivers, warehouse staff, and logistics coordinators.

7. Urban Logistics and Last-Mile Efficiency Solution:

Develop urban distribution centers, micro-fulfilment hubs, and shared delivery networks to ease inner-city congestion.

Promote the use of e-bikes, electric vans, and drone delivery in dense urban areas.

Designate logistics zones in city masterplans to enable structured development.

8. Cold Chain Infrastructure Enhancement Solution:

Provide subsidies and tax benefits for investment in cold chain facilities and temperature-controlled vehicles.

Develop hub-and-spoke cold chain networks with linkages to food parks, pharma clusters, and ports.

Encourage public-private partnerships (PPP) for cold chain expansion.

9. Faster Policy Implementation Solution:

Establish inter-ministerial task forces to ensure timely implementation of logistics policies like NLP and Gati Shakti.

Appoint nodal officers in key infrastructure projects to monitor execution.

Involve private stakeholders in policy feedback and roadmap planning for better alignment.

10. Sustainability and Green Logistics

Solution:

Promote adoption of electric vehicles (EVs) and CNG-based logistics fleets through subsidies and financing support.

Encourage solar-powered warehouses, eco-friendly packaging, and reverse logistics systems.

Introduce carbon credit systems or incentives for green logistics practices.

11. Modernizing Warehousing Solution:

Standardize warehouse specifications (height, flooring, racking) and promote Grade-A facilities.

Integrate automated material handling, inventory control systems, and real-time dashboards.

Co-locate warehousing with transport hubs to optimize first-mile and last-mile logistics.

12. Enhancing Visibility and Data Sharing Solution:

Build centralized data platforms for sharing real-time tracking, customs clearance, and shipment status across stakeholders.

Enforce EDI (Electronic Data Interchange) protocols between shippers, carriers, and ports.

Promote blockchain-based smart contracts for better trust and transparency.

Future Prospects

1. Rapid Industry Growth and Market Expansion

The logistics sector in India is expected to grow at a CAGR of 8 10%, reaching USD 400 500 billion by 2030.

Growth will be fueled by rising e-commerce, industrial expansion, infrastructure upgrades, and increasing consumption in Tier 2 and Tier 3 cities.

2. Evolution into an Integrated and Multimodal Ecosystem

With the implementation of the National Logistics Policy (NLP) and PM Gati Shakti Master Plan, the logistics sector will evolve into a multimodal, seamless, and digitally enabled system.

Greater focus on integrating road, rail, inland waterways, air cargo, and coastal shipping will enhance flexibility and reduce costs.

3. Strategic Role in Global Supply Chains

Indias position as a global manufacturing hub under initiatives like "Make in India" and Production Linked Incentive (PLI) schemes will demand robust, reliable logistics.

Greater emphasis on port-led development, export-oriented logistics parks, and cross-border trade facilitation will strengthen Indias global logistics footprint.

4. Rise of Green and Sustainable Logistics

With global ESG norms and sustainability goals, the future will see a shift toward green logistics, including: o Increased use of electric vehicles and CNG fleets. o Adoption of solar-powered warehouses and energy-efficient buildings. o Focus on reverse logistics, recyclable packaging, and carbon neutrality.

5. Growth in Specialized Segments

Segments such as cold chain logistics, e-commerce logistics, pharma logistics, and EV logistics will experience accelerated growth.

D2C (Direct-to-Consumer) brands will demand more hyperlocal and last-mile innovations.

6. Focus on Skill Development and Employment

The sector is expected to create millions of new jobs, especially in digital logistics, warehouse management, fleet operations, and supply chain analytics.

Government and private collaboration will drive logistics-specific training programs under Skill India.

Cautionary Statement

Statements in the Management Discussion and Analysis describing the Companys strategies on business, projections and estimates are forward looking statements. The actual results may vary from those expressed or implied, depending upon economic conditions, Government policies, regulations, tax laws and other incidental factors.

Annexure to the Directors Report

Information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo pursuant to the Companies (Disclosure of Particulars in the report of Board of

Directors) Rules, 1988 forming part of Directors Report.

1. Conservation of Energy

The Company Continuous its in-house programme of enlightening and educating commercial vehicle drivers for greater fuel efficiencies. All the vehicles owned by the company undergo an intensive Planned Preventive Maintenance (PPM) drill to keep the vehicles in top running conditions with special emphasis on fuel conservation.

2. Research & Development

The operations of the Company do not require any elaborate R&D Activities. The Company however maintains the quality of its services by constant quality control & evaluation for improvement of existing services.

3. Technology Absorption, Adoption & Innovation

No technical tie up has been entered so far. The Company however keeps itself abreast of the latest technological changes.

4. Foreign Exchange Earnings & Outgo

Total foreign exchange earned & used

Particulars	2024-25
1. FOB Value of Export (Foreign Exchange Inward)	NIL
2. CIF Value of Import (Foreign Exchange Outward)	NIL

5. MR -3

The Secretarial audit report is attached herewith as per attachment.

6. https://www.mflindia.co.in/ Link of the website for AGM notice with explanatory notes and Annual Return

		By order of the Board
		MFL India Limited
	Sd/-	Sd/-
Place: Delhi	(Anil Thukral)	(Jafar Ahamed)
Date: 01.07.2025	Managing Director	Director
	DIN 01168540	DIN- 06447145