Pranik Logistics Ltd Management Discussions

A. Industry Structure and Developments

The Indian logistics sector continued its strong transformation in FY 2024-25, solidifying its position as a critical enabler of economic growth, trade efficiency, and industrial competitiveness. With the sector now valued at over USD 430 billion and projected to grow at a CAGR of 8-10% over the next five years, logistics is increasingly recognized as essential infrastructure that connects producers, manufacturers, and consumers across diverse geographies.

A series of policy interventions and structural reforms have accelerated the modernization of Indias logistics ecosystem. The Goods and Services Tax (GST) has enabled route optimization and warehouse rationalization, helping reduce redundancies and improve supply chain visibility. Meanwhile, the National Logistics Policy (NLP), launched in FY 2022-23, continues to gain traction in lowering logistics costs, targeting a reduction from the current 13-14% of GDP to single-digit levels, in line with global benchmarks.

In FY 2024-25, significant progress was also made under initiatives such as PM Gati Shakti, the rollout of Multimodal Logistics Parks (MMLPs), and the Unified Logistics Interface Platform (ULIP). These programs are driving greater digital integration, intermodal connectivity, and real-time data sharing, fostering a more efficient, technology-enabled, and future-ready logistics ecosystem in India.

The rise in e-commerce penetration, direct-to-consumer retailing, and the Make in India initiative have further elevated the demand for organized logistics and supply chain solutions, especially in Tier 2 and Tier 3 cities. As a result, players offering integrated services such as transportation, warehousing, and reverse logistics are witnessing higher demand across industry verticals like FMCG, retail, e-commerce, and manufacturing.

Additionally, digital adoption has accelerated rapidly. Technologies such as real-time vehicle tracking, warehouse automation, Al-powered route planning, and data analytics are not only improving efficiency but also enhancing customer experience. There is a visible shift toward greener and more sustainable practices as well, with a growing interest in electric vehicles (EVs), solar-powered warehouses, and fuel-efficient logistics models.

Amid these developments, Pranik Logistics Limited has continued to expand its footprint and service capabilities. From our inception in 2015, we have evolved in tandem with the industry, positioning ourselves as a reliable Third- Party Logistics (3PL) player with a strong presence in Eastern and Central India, and expanding operations across Jharkhand, Bihar, Odisha, Assam, West Bengal, Chhattisgarh, Maharashtra, Gujarat, Rajasthan, Uttar Pradesh, Tamil Nadu, Karnataka, and the National Capital Region. We cater to clients across industries by offering tailor- made solutions in reverse logistics, warehouse handling, and multi-state transportation, supported by our experienced management team and expanding infrastructure base.

We believe that the industry is entering a phase of structured growth and long-term value creation, driven by policy stability, digital innovation, and growing demand for integrated logistics. With our operational model aligned to these trends, we are well-positioned to participate in and contribute to the next wave of growth in Indias logistics journey.

B. Our Strengths and Weaknesses

Our Strengths:

7. Cost Optimization Through Asset-Light Model

Our blend of owned and leased fleets, fixed and contractual skilled and unskilled workers along with operating with leased warehouses help us save significant overheads and fixed costs, delivering favorable return on assets while maintaining operational flexibility. This model also enables us to offer competitive pricing to clients while achieving great capital efficiency.

2. Comprehensive Integrated Solutions Portfolio;

Our one-stop-shop approach eliminates the complexity of managing multiple logistics partners for our client. By offering C&F operations, warehousing, transportation, and value-added services under a single umbrella, we provide our clients with seamless coordination and accountability across their entire supply chain journey.

3. Strategic Network Reach

With 35-45 operational hubs and warehouses strategically positioned across 13+ states, we ensure comprehensive coverage of Indias key commercial corridors. Our network spans over 6000 pin codes, enabling timely delivery PAN-India.

4. Personalized Service Excellence

We pride ourselves on delivering highly customized logistics solutions tailored to each clients unique requirements. Our 500+ skilled professionals ensure superior service quality through dedicated account management, real-time visibility via GPS tracking, and proactive problem resolution.

5. Reverse Logistics Capabilities

We offer customized reverse logistics solutions customized for different industry verticals, addressing the growing need for returns management, product recalls, and sustainable supply chain practices. This positions us advantageously in the expanding e-commerce and sustainability-focused market segments.

6. Market Positioning in High-Revenue Geographies

Our dominant presence in key commercial hubs across East and West India contributes 60% of our total revenue. This strategic positioning in high-growth markets provides us with consistent business and proximity to major manufacturing and consumption centers.

7. Diversified Industry Portfolio

Our client base spans automotive, FMCG, e-commerce, construction, consumer durables, retail, and textiles sectors. This diversification reduces dependency on any single industry vertical and provides resilience against sector-specific downturns while capturing growth opportunities across multiple segments.

Weaknesses:

7. Limited South India Presence

While we maintain strong positions in East and West India, our limited presence in the rapidly growing South Indian markets represents a strategic gap. This restricts our ability to serve pan-India clients comprehensively and limits access to emerging high-growth opportunities in the region.

2. Regulatory and Compliance Risks

Frequent changes in GST regulations, labor laws, transportation norms, and environmental regulations create compliance burdens and potential penalty risks. The complex regulatory landscape across multiple states adds operational complexity and costs.

C. Opportunities and Threats

Opportunities

7. Rising Demand for Integrated Logistics

With increasing complexity in supply chains and rising consumer expectations, there is a growing shift among clients toward end-to-end logistics partners who can provide warehousing, transportation, and reverse logistics under one umbrella. Pranik Logistics is uniquely positioned to benefit from this transition due to our integrated 3PL offerings and customized client solutions.

2. Growth of E-Commerce and Tier-ll/lll Penetration

The exponential growth of the e-commerce sector, especially in semi-urban and rural areas, has led to increased demand for reliable last-mile connectivity and efficient reverse logistics. Our expanding network across regions like Jharkhand, Bihar, Chhattisgarh, and interior Maharashtra and Gujarat enables us to serve this demand with agility.

3. Policy and Infrastructure Push

Initiatives such as the National Logistics Policy (NLP), PM Gati Shakti, and dedicated freight corridors are expected to reduce logistics costs and improve infrastructure. These changes are expected to unlock new efficiencies and business opportunities for organized logistics players like us.

4. Technology Adoption and Digital Transformation

The logistics sector is undergoing a rapid digital transformation with the adoption of route optimization tools, GPS tracking, automated warehousing, and data analytics. Pranik Logistics is steadily investing in digital capabilities to improve operational transparency, real-time tracking, and client service quality.

5. Diversification Across Sectors

As demand picks up across FMCG, retail, e-commerce, pharma, and manufacturing sectors, our diversified service offerings can cater to varying logistics needs. We see strong potential for growth, particularly in reverse logistics, where we already have operational strength.

Threats

7. Fuel Price Volatility and Cost Inflation

The logistics industry remains inherently sensitive to fluctuations in fuel prices and key input costs, with diesel continuing to account for a substantial share of operating expenses. In the absence of timely and proportionate freight rate revisions from clients, any sustained increase in diesel prices, toll charges, or maintenance costs may adversely impact the Companys operating margins. Given the competitive nature of the sector, maintaining profitability under such cost pressures remains a key challenge.

2. Intense Market Competition

The logistics space, especially in the SME and regional segments, is highly fragmented. We face competition from both large integrated players and smaller local operators, some of whom may offer unsustainable pricing. This puts pressure on pricing power.

3. Infrastructure Bottlenecks in Remote Areas

While our network extends across Tier-ll and Tier-Ill towns, inconsistent infrastructure (such as road conditions, warehousing facilities, and internet connectivity) in certain areas can affect service efficiency and delivery timelines.

4. Talent Availability and Retention

As the logistics sector becomes more technology-driven and process-oriented, there is increasing demand for trained manpower in fleet management, warehouse handling, and supply chain analytics. Retaining skilled professionals and drivers continues to be a challenge, particularly in remote operational zones.

D. Segment-wise or Product-wise Performance

Pranik Logistics Limited reports its business under a single consolidated segment of integrated logistics services, encompassing:

• Transportation

• Warehousing and Material Handling

• Reverse Logistics & Freight Forwarding

• CFA (Carrying & Forwarding Agent) Services

• Value-Added Services

Performance Highlights (FY202A-2S)

During the financial year 2024-25, Pranik Logistics Limited delivered a robust financial performance, reflecting the companys consistent focus on operational efficiency, service expansion, and strategic execution. Revenue from operations stood at ?10,475.59 lakhs, registering a healthy growth of approximately 56.73% over the previous financial years revenue of ?6,683.93 lakhs. This growth was driven primarily by increased demand for integrated logistics solutions, expansion into new geographic regions, and strengthening trust with key clients across sectors.

EBITDA for the year rose significantly to ?1142.40 lakhs from ?763.15 lakhs in FY 2023-24, marking a substantial 49.69% increase, supported by better cost management, route optimization, and warehouse utilization. Net Profit (PAT) continued its strong growth trajectory, rising to ?644.42 lakhs in FY 2024-25 from ?406.56 lakhs in the previous year. This represents a robust increase of approximately 58.50%, underscoring the benefits of operational leverage, improved margin profile, and effective control on economies of scale.

This improved performance highlights Pranik Logistics growing brand credibility, enhanced geographic presence, and ability to adapt to market dynamics through technological upgradation, diversified offerings, and customercentric service delivery. The company remains well-positioned to leverage its momentum going forward, as it continues to scale and innovate in the evolving logistics landscape.

E. Outlook

The Indian logistics sector is on the cusp of a structural transformation, driven by increasing formalization, government policy thrust (such as Gati Shakti, National Logistics Policy), rapid digitization, and strong demand from e-commerce, retail, and industrial sectors. As India continues its push in FY 2025-26 to reduce logistics costs from 14% to the global benchmark of 8% of GDP, our company is all set to play a vital role in this evolution.

Pranik Logistics, with its expanding footprint across key geographies and a robust suite of integrated logistics services-including transportation, reverse logistics, CFA operations, and warehousing-is well-positioned to capitalize on favorable macroeconomic and sectoral trends.

In FY 2025-26, the companys strategic priorities will focus on:

• Scaling operational capacity through continued investment in technology-driven automation for warehouse and fleet management systems;

• Deepening market presence across high-growth logistics corridors in Maharashtra, Tamil Nadu, Gujarat, Rajasthan, and the NCR region;

• Forging and expanding strategic partnerships with large-format retailers, e-commerce platforms, and key industrial clients;

• Optimizing asset utilization and reducing turnaround times, aimed at driving further EBITDA margin enhancement and operational efficiency.

Following the successful IPO and listing on the NSE SME platform, FY 2025-26 represents a critical phase in building a strong and scalable platform for future growth. The enhanced capital base and public market presence are expected to support:

• Expansion of warehousing infrastructure in strategic locations;

• Fleet modernization, with a focus on environmentally sustainable and fuel-efficient vehicles;

• Strengthening governance and financial transparency, in alignment with public company standards.

While the company remains vigilant to external risks such as fuel price volatility, regulatory changes, and global supply chain disruptions, Praniks diversified operations, agile execution model, and proactive risk management framework provide a solid foundation for resilience.

Looking forward, Pranik Logistics expects to continue delivering sustained revenue growth, improved profitability, and long-term value creation for all stakeholders.

F. Risks and Concerns

Pranik Logistics Limited operates in a dynamic and competitive environment. While the Company has demonstrated consistent growth, it remains vigilant of the various internal and external risks that may impact operations or financial performance. The following are key risks identified by the management along with mitigation strategies adopted:

7. Operational Risk

• Description: Dependence on external vendors, fleet maintenance issues, route disruptions, and service delays can adversely impact delivery timelines and customer satisfaction.

. Mitigation Measures:

o Implementation of preventive maintenance schedules, o Investment in route optimization and real-time tracking technologies, o Strengthened SOPs and performance-linked contracts with third-party logistics partners.

2. Financial Risk

• Description: Exposure to interest rate volatility due to moderate leverage levels may increase the Companys borrowing costs.

• Mitigation Measures:

o Active review of funding strategies, o Maintenance of adequate cash flow buffers.

o Efficient working capital management to reduce dependency on external short-term debt.

3. Compliance and Regulatory Risk

• Description: Changes in taxation laws (e.g., GST), labor laws, environmental compliance norms, and transportation policies could increase compliance complexity.

• Mitigation Measures:

o Dedicated compliance cell tracking all applicable laws, o Regular training and workshops for staff, o Periodic audits and statutory review mechanisms.

4. Client Concentration Risk

• Description: A significant portion of the Companys revenue is derived from a limited number of large clients, posing a potential risk in case of contract losses or renegotiations.

• Mitigation Measures:

o Strategic client acquisition efforts targeting diversified sectors, o Focused expansion into Tier-ll and Tier-Ill cities to grow the MSME client base, o Enhancement of service portfolios to increase customer stickiness.

5. Technology and Cybersecurity Risk

• Description: With increasing digital dependency, the risk of data breach, cyber threats, or system failures has grown.

• Mitigation Measures:

o Deployment of secure IT infrastructure with access controls, o Regular data backups and cybersecurity audits.

o Adoption of cloud-based, encrypted solutions to enhance digital resilience.

The Company regularly reviews its risk matrix and ensures its risk management framework is aligned with industry best practices. Through proactive identification and mitigation, Pranik Logistics aims to safeguard shareholder value and ensure long-term business sustainability.

G. Internal Control Systems and their Adequacy

Pranik Logistics Limited has established a robust internal control framework to ensure accurate financial reporting, operational efficiency, asset protection, and legal compliance.

The Companys internal controls cover key areas such as financial transactions, logistics operations, IT systems, and statutory compliance. These controls are regularly reviewed through internal and external audits. Financial controls are reinforced by periodic budgeting and variance analysis, while logistics operations are monitored through SOPs and real-time tracking systems.

An ERP-integrated logistics platform supports efficiency and transparency across all functions. Compliance monitoring department ensure adherence to applicable laws and regulations, including the Companies Act, GST, and transport laws.

The Audit Committee and management regularly review audit findings and corrective measures. Based on these reviews, the internal control systems are considered adequate and aligned with the Companys growth and risk profile.

H. Discussion on Financial Performance with Respect to Operational Performance (FY 2024-25)

During the fiscal year FY 2024-25 (April-March), Pranik Logistics Limited sustained its growth momentum and demonstrated continued alignment between operational expansion and financial outcomes:

7. Revenue Acceleration

Operating revenue reached an annualized ? 10,475.59 lakhs for FY 2024-25, reflecting steady & accelerated demand across warehousing, reverse logistics, and transportation services.

• Expansion into Northern and Western regions, along with deeper penetration in key Eastern states, fueled this growth.

2. Enhanced Profitability

• With disciplined cost control and efficient route utilization, EBITDA margins improved in F.Y. 2024-25.

Profit After Tax (PAT) for FY 2024-25 stood at ? 644.42 lakhs, indicating profitability continuity driven by operational leverage.

3. Operational Efficiency

• The Company processed a higher number of consignments across sectors like FMCG, retail, and telecom, reflecting strong demand and growing client trust.

• Improved asset utilization and turnaround times were supported by fleet optimization and enhanced warehouse infrastructure.

• Real-time tracking systems and SOP adherence continued to raise operational consistency and client satisfaction.

4. Cash Flow & Capital Deployment

• Positive cash flow from operations enabled continued reinvestment into the business.

• Working capital management remained robust, ensuring liquidity to support growth and minimize leverage risks.

Summary

FY 2024-25 reaffirms Pranik Logistics ability to convert core operational achievements into tangible financial results. Revenue consistency, improving profitability, and strategic efficiency gains underscore strong business execution. Key enablers included network expansion, technology integration, and careful financial disciplinepositioning the Company well for sustainable growth in an evolving logistics landscape.

I. Material Developments in Human Resources / Industrial Relations

In FY 2024-25, Pranik Logistics Limited focused on strengthening its workforce and enhancing operational efficiency:

• Regular Employee Communication Session where senior management interacted directly with employees to share business updates, address queries, and recognize performance

• Departmental reviews and team-building activities to boost collaboration

• Skill development workshops and on-the-job training to upskill operational and support teams

• Reward and recognition programs to appreciate outstanding contributions

• Festive celebrations and team-building activities to foster camaraderie across teams

The Company is also committed to enhancing diversity and inclusion across all levels. As of 31st March 2025, the total workforce stood at 976 employees. This includes 16 female employees who have been primarily engaged in functional roles. While the logistics sector traditionally has lower female participation in operational roles, the Company is actively working towards improving representation across functions. Focused retention measures such as structured career growth, cross-functional mobility, and employee feedback mechanisms have contributed to a stable and engaged workforce. The Company continues to prioritize a people-centric approach to support its growth trajectory.

J. Changes in key financial ratios

Pursuant to the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the details of key financial ratios along with the reasons for significant changes therein are given below:

SI. No. Particulars	For the year ended 31st March, 2025	For the year ended 31st March, 2024	% Change	Reasons for significant change (If any)
1. Debtors Turnover	3.45	3.41	1.36%	Increase of Sales
2. Inventory Turnover	NA	NA	-	NA
3. Debt Service Coverage Ratio*	2.04	1.38	48.64%	Due to better Liquidity
4. Current Ratio	2.40	1.37	74.99%	Due to increase in liquidity of the Company
5. Debt Equity Ratio	0.50	1.56	-68.20%	Due to increase in share capital and reserve surplus of the Company
6. Return on Equity Ratio	0.59	0.75	-22.34%	Due to increase in Shareholders equity
7. Trade Payables T urnover Ratio	NA	NA	-	NA
8. Net Capital Turnover Ratio	3.47	8.14	-57.40%	Due to increase in working capital of the Company
9. Net Profit Margin (%)	6.15%	6.08%	1.13%	Increase of sales and proper management
10. Return on Capital Employed	0.25	0.54	- 52.94%	IPO was issued in October,24 and was not deployed for the full year
11. Return on Investment	-	-	-	NA

"BSsCR for the year 2023-24 was 1.38 but it was reported as 2.37 & ROCE was reported as 0.13 for the year 2023-24 instead of 0.54

Notes:

1 .Above ratios are based on the standalone financial statements of the Company.

2.Significant change means a change of 25% or more as compared to the immediately preceding financial year.

3. The figures of previous year have been reclassified and regrouped wherever considered necessary.

Details of change in return on networth as compared to the immediately preceding financial year.

SI. No. Particulars	For the year ended 31st March, 2025	For the year ended 31st March, 2024	% Change	Reasons for change
1. Return on Net Worth	58.53	73.37	-22.34%	New shares issued into middle of the year

CAUTIONARY STATEMENT

This Management Discussion and Analysis contains forward-looking statements that reflect the Companys current views and expectations. Actual results may vary due to risks and uncertainties including regulatory changes, economic conditions, and competitive factors. The Company does not undertake any obligation to update these statements except as required by law.