Neptune Logitek Ltd Management Discussions

ECONOMIC OVERVIEW GLOBAL ECONOMY

Once again, the global economy is threatened with being thrown off course—this time by the outbreak of war in the Middle East at the end of February 2026. Over the past year, headwinds from higher trade barriers and elevated uncertainty have been offset by tailwinds from technology-related investment; accommodative financial conditions, including a weaker US dollar; and fiscal and monetary policy support. The Middle East conflict presents a significant counterforce to these tailwinds through its impact on commodity markets, inflation expectations, and financial conditions.

Given the difficulty of underpinning in real time a consistent set of assumptions for projections, this World Economic Outlook (WEO) report presents a reference forecast—in lieu of the traditional baseline—predicated on the assumption that the war will have limited duration, intensity, and scope, such that the disruptions will fade by mid-2026, consistent with commodity futures prices as of March 10. However, given the fluidity of the situation, the report complements the global reference forecast with scenarios in which the conflict lasts longer or expands. The likelihood of these scenarios materializing rises progressively as hostilities and associated disruptions continue.

Under the reference forecast, global growth is projected to be 3.1 percent in 2026 and 3.2 percent in 2027, slower than its recent pace of about 3.4 percent in 2024-25, and to settle at about that rate in the medium term, slower than its historical (2000-19) average of 3.7 percent. The forecast for 2026 is revised downward by 0.2 percentage point and that for 2027 is unchanged, compared with those in the January 2026 WEO Update. Global headline inflation is expected to increase to 4.4 percent in 2026 and decline to 3.7 percent in 2027, marking upward revisions for both years.

Absent the war, global growth would have been revised upward. Indeed, forecasts based on pre conflict assumptions would have shown a slight upward revision of 2026 growth relative to that forecasted in the January WEO Update, by 0.1 percentage point to 3.4 percent. Hence, the downward revision for 2026 largely reflects the disruptions from the conflict in the Middle East, partly offset by carryover from recent strong data and reduced tariff rates.

Crucially, there is a high degree of cross-country dispersion in the reference forecast. While the growth and inflation revisions seem relatively modest at the global level, the toll on the conflict region and more vulnerable economies elsewhere—in particular, commodity-importing emerging market and developing economies with preexisting fragilities—is much more pronounced. The downward revision to growth in emerging market and developing economies is 0.3 percentage point for 2026, relative to that in the January WEO Update, while the forecast is broadly unchanged for advanced economies.

Under an adverse scenario with larger and more persistent increases in energy prices, global growth would slow further to 2.5 percent in 2026, and inflation would reach 5.4 percent. Under a more severe scenario in which there is more damage to energy infrastructure in the conflict region, the impact would be even larger: Global growth would be cut to only about 2 percent in 2026, while headline inflation would be just above 6 percent by 2027. The impact on emerging market and developing economies would be almost twice that on advanced economies.

GLOBAL GROWTH FORECAST: FRAGILE WITH LARGE DISPERSION

• Before the outbreak of the conflict, the bottom-up forecasts would have indicated a stable growth path (Pre conflict WEO forecast in Figure 1.8). Global growth would have been 3.4 percent in 2026 and 3.2 percent in 2027, an upward revision of 0.1 percentage point for 2026 and unchanged for 2027 compared with the forecast in the January 2026 WEO Update.

• Under the assumption in the reference forecast that the war turns out to be relatively short-lived, global growth is expected to slow down modestly. At 3.1 percent for 2026 and 3.2 percent for 2027, the forecasts mark a deceleration from the estimated 3.4 percent achieved in 2025 (Table 1.1). At market exchange rates, world output is projected to grow by 2.6 percent in both 2026 and 2027. The relatively modest downward revision to global growth in the reference forecast relative to the January 2026 WEO Update owes to continued tailwinds partially offsetting the negative shocks from the conflict, including lower tariffs, preexisting policy support, and carryover from stronger-than-expected outturns at the end of 2025 and the first quarter of 2026 in some cases. Compared with the pre conflict WEO forecasts, growth in the near term is revised downward by 0.2 percentage point. This masks significant variation across countries, with lower-income commodity-importing economies being hit particularly hard through higher energy and food prices as well as foreign exchange depreciation (Figure 1.9). Cumulative growth over 2026-27 is revised downward by 0.5 percentage point for low-income net energy-importing economies relative to the January 2026 WEO Update, compared with a downward revision of 0.2 percentage point in energy importing advanced economies and positive or neutral revisions for net energy exporting economies. musuaie me potential

range of magnitudes, the report considers two top-down model-based downside scenarios: an adverse one and a severe one.

• In the adverse scenario , (1) Oil prices are assumed to increase by 80 percent starting in the second quarter of 2026 relative to the January 2026 WEO Update baseline, before falling back to about 20 percent above baseline in 2027, with the increase dissipating in 2028 (corresponding to an average petroleum spot price index of about $100 per barrel in 2026 and about $75 in 2027). Gas prices increase for Europe and Asia by 160 percent in the second quarter relative to baseline, before also mostly unwinding in 2027, and food commodity prices increase by 2.5 percent. (2) One-year- ahead inflation expectations increase by as much as 50 basis points by 2027 in advanced economies and as much as 90 basis points in emerging markets excluding China. Inflation expectations are unchanged in China, as current low inflation makes this less of a risk than for other countries. (3) A risk-off episode increases corporate premiums in advanced economies and China by 50 basis points, while emerging markets excluding China experience a 100 basis point increase as well as a 50basis point increase in sovereign spreads. The tightening in financial conditions fades in 2027. Given the large impact on inflation expectations, the monetary policy response assigns less weight to output stabilization than usually assumed.

• In the severe scenario , (1) The shock to commodity prices is more severe and persistent, with oil prices increasing by 100 percent starting in the second quarter of 2026, relative to the January 2026 WEO Update baseline, but also staying at that level in 2027, before dissipating in 2028 (corresponding to an average petroleum spot price index of about $110 per barrel in 2026 and about $125 in 2027). Gas prices for Europe and Asia increase by 200 percent over the same period, and food commodity prices increase by 5 percent in 2026 and 10 percent in 2027. (2) One-year-ahead inflation expectations ratchet up by as much as 100 basis points in advanced economies by 2027 and by as much as 130 basis points in emerging markets excluding China, also by 2027. (3) A significant risk-off episode pushes up corporate premiums in advanced

economies and in China by 100 basis points in 2026, and they stay at that level in 2027, while emerging markets excluding China experience a widening in sovereign spreads of 100 basis points over the same period, along with an increase in corporate spreads of 200 basis points. As in the adverse scenario, the monetary policy response is geared toward containing inflationary pressures rather than stabilizing output

WORLD TRADE OUTLOOK AND GLOBAL IMBALANCES

World trade volume growth is expected to decline from 5.1 percent in 2025 to 2.8 percent in 2026 and increase to 3.8 percent in 2027. These dynamics reflect front-loading early on and the impact of tariffs mitigated by adjustments in trade linkages and production chains as time goes by. Exports of both goods and services are projected to decline in percent of world GDP over the forecast horizon, with the decline in services trade being much less pronounced. This reflects the stronger underlying trend growth and greater resilience to rising risks in services trade compared with that in goods trade.

Over the medium term, global imbalances are expected to decline only modestly.

Expansionary fiscal packages in some economies with current account surpluses are expected to contribute to this cyclical decline (Figure 1.11). Countering this is a technology-driven business investment surge, which is expected to continue to attract capital flows to the United States even as investment in technology moderates. Stronger productivity growth in the United States could enhance US competitiveness in technology-related services and improve the countrys trade balance. But positive wealth effects that

_ boost domestic demand, together with

- sustained capital inflows driven by higher returns, would dominate and keep the US

- current account deficit wider than that observed during the decade preceding

- the COVID-19 pandemic. Sustained large fiscal deficits in the United States

- and Chinas continued reliance on export led growth and limited rebalancing to

domestic consumption contribute to external imbalances in these two countries.

(Source:https://www.imf.org/en/publications/weo/issues/2026/04/14/world-economic-outlook- april-2026)

INDUSTRY OVERVIEW GLOBAL LOGISTICS INDUSTRY

The global logistics market size was valued at USD 4,109.1 billion in 2025 and is projected to grow from USD 4,334.3 billion in 2026 to USD 8,496.1 billion by 2033, at a CAGR of 10.1% from 2026 to 2033. The rapid expansion of e-commerce has significantly increased the volume and frequency of shipments, thus creating strong demand for efficient warehousing, last-mile delivery, and integrated supply chain solutions.

In addition, technological advancements such as automation, artificial intelligence, real-time tracking, and advanced warehouse management systems are improving operational efficiency and reducing delivery times. The rapid growth of online retail has significantly influenced the target market, driving the need for efficient services, especially in last-mile delivery. This segment, crucial for transporting goods from distribution centers to consumers, has seen innovations such as drones and autonomous vehicles to meet the demand for faster, more reliable deliveries. Warehousing has also evolved to meet the needs of online retailers, with larger, automated warehouses becoming essential for managing inventory and fulfilling orders promptly.

The growth of online retail has propelled the logistics industry towards more efficient and technologically advanced solutions. This transformation aims to meet the evolving demands of modern consumers for faster and more convenient delivery options. The logistics sector plays a critical role in the global economy by facilitating the movement of goods across various industries and geographical regions. Moreover, as online shopping continues to grow, the target market is expected to further innovate and adapt to meet the increasing demand for efficient, reliable services. This evolution is likely to lead to further advancements in technology and supply chain practices, driving the industry toward greater efficiency and sustainability.

Customer demand for faster deliveries is a significant driver of growth in the logistics industry. As consumers increasingly expect quick and reliable delivery of goods, logistics companies are compelled to innovate and optimize their operations to meet these expectations. This demand has led to the development of new delivery models, such as same-day and next-day delivery services, which require more efficient supply chain processes. To meet these demands, logistics companies are investing in technologies such as route optimization software, automated warehouses, and advanced tracking systems. Meeting customer expectations for faster deliveries not only drives the growth of the target market but also fosters customer loyalty and satisfaction. These factors are crucial for repeat business.

However, inadequate transportation infrastructure can limit supply chain efficiency by constraining the capacity of transportation networks and operations. This limitation can lead to delays in the movement of goods, increased transportation costs, and difficulties in accessing certain locations. Moreover, inadequate infrastructure can hinder the ability of logistics companies to meet customer demands for timely deliveries, impacting customer satisfaction. Addressing these infrastructure challenges is crucial to improving supply chain efficiency and ensuring the smooth flow of goods.

(Source: https://www.grandviewresearch.com/industrv-analysis/logistics-market-report)

INDIAN LOGISTICS INDUSTRY INDIA LOGISTICS MARKET HIGHLIGHTS

• The India logistics market generated a revenue of USD 240.5 billion in 2025 and is expected to reach USD 527.5 billion by 2033.

• The India market is expected to grow at a CAGR of 10.9% from 2026 to 2033.

• In terms of segment, transportation services was the largest revenue generating service in 2025.

• Warehousing and Distribution Services is the most lucrative service segment registering the fastest growth during the forecast period.

Transportation services was the largest segment with a revenue share of 33.56% in 2025. Horizon Databook has segmented the India logistics market based on transportation services, warehousing and distribution services, freight forwarding services, inventory management services, value-added logistics services, integration & consulting services covering the revenue growth of each sub-segment from 2021 to 2033.

(Source: https://www.grandviewresearch.com/horizon/outlook/logistics-market/india)

OPPORTUNITIES IN LOGISTICS IN INDIA:

a) E-commerce logistics

• Growth of online shopping creates demand for last-mile delivery, warehousing, order fulfillment, and reverse logistics.

• Opportunities exist in both large cities and smaller towns.

b) Warehousing and fulfillment

• Modern warehouses, cold storage, distribution centers, and fulfillment hubs are increasingly needed.

• Technology-enabled warehouses can provide better inventory management and faster delivery.

c) Cold-chain logistics

• There is strong potential in transporting and storing fruits, vegetables, dairy, pharmaceuticals, seafood, and other temperature-sensitive products.

• Refrigerated vehicles and temperature-controlled warehouses are important opportunities.

d) Multimodal transportation

• Combining road, rail, ports, and waterways can reduce transportation costs and improve efficiency.

• Logistics companies can develop integrated transportation solutions.

e) Last-mile delivery

• Delivery services for e-commerce, groceries, medicines, documents, and small businesses continue to expand.

• Electric two-wheelers and three-wheelers can create opportunities for lower-cost and greener delivery.

f) Freight forwarding and international logistics

• Indias expanding international trade creates opportunities in customs clearance, freight forwarding, container logistics, and export-import services.

g) Reverse logistics

• Product returns, recycling, refurbishment, and disposal are becoming increasingly important because of e-commerce and sustainability requirements.

h) Specialized logistics

• Industries such as automobiles, pharmaceuticals, chemicals, electronics, and food require specialized transportation and storage.

• Businesses offering industry-specific logistics solutions can differentiate themselves from general transport providers.

i) Green logistics

• Electric vehicles, alternative fuels, solar-powered warehouses, route optimization, and carbon-reduction services offer new business opportunities.

THREATS IN LOGISTICS IN INDIA

• High operating costs

Rising fuel prices, vehicle maintenance, toll charges, labour costs, and warehouse expenses can reduce profit margins.

• Poor infrastructure in some areas

Although infrastructure is improving, inadequate roads, congestion, limited rail connectivity, and inefficient local infrastructure can cause delays.

• Intense Competition

Logistics companies face competition from traditional transport operators, large organized companies, e-commerce firms, and technology-based logistics startups.

• Fuel price fluctuations

Transportation depends heavily on fuel. Sudden increases in diesel and other fuel prices can significantly increase logistics costs.

• Shortage of skilled manpower

There is a need for trained drivers, warehouse workers, supply-chain professionals, and technology specialists.

• Regulatory and compliance risks

Changes in taxation, transportation regulations, environmental rules, labour laws, and state-level requirements can increase operational complexity.

• Technology and cybersecurity risks

Greater dependence on digital platforms, GPS, cloud systems, and automated warehouses increases exposure to cyberattacks, data theft, and system failures.

• Economic Uncertainty

Inflation, economic slowdowns, changes in consumer demand, and international trade disruptions can reduce freight volumes.

• Natural disasters and climate change

Floods, extreme heat, cyclones, landslides, and other natural events can damage infrastructure and disrupt transportation networks.

• Theft and cargo damage

Goods may be lost, stolen, damaged, or delayed during transportation and storage, creating financial losses and affecting customer trust.

• Dependence on road transportation

Indias heavy reliance on road freight makes the sector vulnerable to traffic congestion, accidents, road conditions, and fuel-price changes.

OUTLOOK:

Indias economic landscape is characterised by a resilient growth baseline and a maturing fiscal framework, albeit increasingly tested by global volatility. While robust public capital expenditure sustains domestic momentum, systemic risks—particularly within energy markets—necessitate a calibrated outlook. In this environment, proactive trade diplomacy and strategic project de-risking could serve as vital buffers, providing the policy visibility essential for sustained investment.

In light of these developments, we foresee the following key trends in 2026:

• Rental Dynamics & Flight to Quality: Warehousing rentals are likely to maintain an upward trajectory in 2026, supported by a flight to quality and rising costs; developers are recalibrating benchmarks through Grade A supply and selective lease customisations, while increasingly prioritising peripheral clusters.

• Strategic Land & Asset Optimisation: To counter high land costs, developers are adopting long-term lease models, decentralising into multiple smaller parcels, and expanding into emerging corridors; additionally, retrofitting second-generation urban

warehouses with modern flooring and HVAC systems is allowing landlords to meet premium occupier requirements.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:

The Company is primarily engaged in the business of transportation, freight forwarding, and integrated logistics solutions, catering to diverse sectors and industries across domestic as well as international markets. Over the years, Neptune Logitek Limited has developed expertise in providing end-to-end logistics and supply chain management services with a focus on efficiency, reliability, and timely delivery.

(In Lakhs)

PARTICULAR	REVENUE FROM OPERATIONS
	2025-26	2024-25
Revenue Generated Within India	17826.38	21443.00
Revenue Generated Outside India	5544.72	4282.39

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has put in place an adequate system of internal control commensurate with its size and nature of business to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the Company checks and verifies the internal control system and monitors them in accordance with the policy adopted by the Company. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

FINANCIAL AND OPERATIONAL PERFORMANCE:

(In Lakhs)

Particulars	2025-26	2024-25
Income From Operations	23,371.11	25,725.39
Other Income	151.07	349.02
Total Income	23,522.18	26,074.41
Total Expenses	22,539.41	24,760.00
Profit before Exceptional Item and	982.77	1,314.42
Extraordinary Item and Tax
Exceptional Item	(12.50)	330.65
Profit before Extraordinary Item and Tax	995.27	983.77
Extraordinary Item	-	-
Profit before tax	995.27	983.77
Less: Tax Expenses	366.43	316.72
Net Profit / (Loss) for the year after Tax	628.84	667.05
Less: Minority interest in Profit)/losses	-	-
Net Profit / (Loss) for the year (after Minority	628.84	667.05
interest adjustment)
Earning Per Shares (Basic in Rs)	4.59	6.67

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

Human resources continue to remain an important enabler of the Companys operational efficiency and sustainable growth. During the year under review, the Company continued to focus on building and retaining a skilled and motivated workforce to support its logistics and transportation operations.

The Company undertook various initiatives relating to employee training and development, operational and safety awareness, employee engagement and welfare. Particular emphasis was placed on enhancing employee capabilities and promoting safe working practices across transportation, warehouse and other operational activities.

The Company maintained a healthy and cordial relationship with its employees during the year. There were no material industrial relations issues reported during the year. The Company remains committed to providing a safe, inclusive and conducive working environment for its employees.

As on March 31,2026, the total number of employees of the Company stood at 108.

Going forward, the Company will continue to focus on employee capability development, retention of key talent, workplace safety, employee engagement and strengthening of human resource practices in line with the Companys business objectives.

KEY FINANCIAL RATIO

PARTICULAR	31.03.2026	31.03.2025
Debtors Turnover	3.57	4.65
Inventory Turnover	40.70	51.89
Interest Coverage Ratio	2.83	2.74
Current Ratio	1.42	1.21
Debt Equity Ratio	0.78	2.91
Operating Profit Margin	6.59	6.02
Net Profit Margin	2.67	2.56
Return on Net-worth	9.28	33.43