Premier Roadlines Ltd Management Discussions

INDUSTRY OVERVIEW

The transportation sector is an important industry sector in the economy that deals with the movement of people and products. These include companies such as airlines, trucking, railroads, shipping, and logistics firms, as well as those that provide transportation infrastructure. This sector is essential for enabling trade, commerce, and economic growth worldwide. The logistics sector, particularly project logistics and the handling of over-dimensional and over-weight cargo, is essential for the successful execution of large-scale projects. This specialized area of logistics focuses on the transportation and management of heavy, oversized, and time-sensitive goods, which are critical for industries such as construction, energy, and manufacturing. Effective project logistics involves meticulous planning, coordination, and execution to ensure that these unique cargo requirements are met efficiently and safely.

Global Perspective

The global logistics industry encompasses activities across the supply chain, including transportation, inventory management, warehousing, and order processing. Valued at USD $8,185.46 billion in 2015, the market is projected to

reach USD $15,522.02 billion by 2023, growing at a CAGR of 7.5% from 2015 to 2024. In terms of volume, the market was 54.69 billion tons in 2015 and is expected to hit 92.10 billion tons by 2024, with a CAGR of 6% from 2016 to 2024. (Source: - Logistics Skill Council)

Globally, project logistics is increasingly recognized as a vital component of supply chain management, particularly for infrastructure projects and industrial expansions. The complexity of transporting oversized and heavy cargo necessitates a tailored approach that includes multimodal transportation options—combining air, sea, rail, and road transport to optimize routes and reduce costs. As industries expand and global trade increases, the demand for specialized logistics services that can handle the unique challenges of project cargo is expected to grow significantly.

Indian Perspective

The Indian logistics sector, valued at USD $354 billion and contributing 18.4% to GDP, is set to reach $450 billion by 2026-2027, driven by easing FDI norms, GST implementation, globalization, e-commerce growth, and government initiatives like "Sagarmala," "Make in India," and "Gati Shakti." Despite a World Bank ranking of 38^th in

2023-2024, the industrys logistics cost is dominated by the unorganized sector, which accounts for 99% of the USD $150 billion total. Reducing logistics costs from 14% to 9% of GDP could save USD $50 billion, enhancing global competitiveness and potentially boosting exports and job creation. (Source: -Logistics Skill Council)

Indias rapidly growing economy and infrastructure development have led to a significant increase in the demand for project logistics services, particularly for the transportation of overweight and oversized cargo. As the country embarks on ambitious projects in sectors such as construction, energy, and manufacturing, the logistics industry faces the challenge of safely and efficiently moving heavy and bulky cargo across the countrys vast and diverse terrain.

OPPORTUNITIES

• Investment in infrastructure development, including transportation networks, warehouses and logistics parks, presents significant opportunities for growth and expansion.

• Adoption of advanced technologies, such as automation and data analytics, can improve operational efficiency and customer service.

• The increasing complexity of large-scale projects in sectors such as construction, energy, and manufacturing create a robust demand for specialized project logistics services that can manage oversized and heavy cargo effectively.

• Establishing strategic alliances with experienced freight forwarders, carriers, and logistics providers can enhance capabilities in managing complex project logistics, thereby improving service delivery and reducing risks.

THREATS

• The performance of companies in the transportation industry is highly sensitive to fluctuations in company earnings and the price of transportation services. Main factors affecting company earnings include fuel costs, labor costs, demand for services, geopolitical events and government regulation.

• Oil prices are a key factor for transportation, as the commoditys price generally has an influence on transportation expenses. Gas and fuel prices that rise will increase costs for a trucking company, eating into their profit and potentially reducing their stock price.

• Inadequate transportation infrastructure and congestion at ports and highways can hinder the smooth flow of goods.

• Complex regulations and bureaucratic processes can create barriers to entry and increase operational costs.

OUTLOOK FOR THE INDUSTRY AND THE COMPANY For the Industry:

• Indias logistics industry has shown improvements in performance and efficiency, contributing positively to the countrys economic growth.

• Investment in infrastructure development and adoption of advanced technologies are key drivers for future growth and competitiveness.

• Addressing infrastructure challenges, streamlining regulations, and bridging the skill gap are critical for sustained growth and success in the logistics sector.

• Another key trend in the transportation industry is the increasing use of technology. This includes the adoption of fleet management software to optimize routes and schedules, as well as the use of drones and autonomous vehicles. These technologies can improve safety, reduce costs and increase efficiency.

For the Company:

The Company continues to extend its services to additional industrial sectors i.e. Defence, Renewable Energy and Railways along with expanding customer base in existing industrial sectors as it focusses on adhering to the quality standards to get multiple orders which reflects in building its brand image and establishing strong, mutually beneficial long-term relationships with Transporters, Small Fleet Owners, Agents and Customers.

Moreover, the Company is planning to enhance its technological capabilities to streamline large-scale activities, optimize operations, and improve overall efficiency. The companys focus on innovation and technology adoption will be crucial in maintaining a competitive edge in the evolving logistics landscape.

RISK MANAGEMENT

The Company has common risks which includes change in management/personnel and policies, lapses / inadequacy in existing facilities, delinquencies on the part of employees, staff attrition, misfeasance, change in interest rates, government regulations, competition from others operating in similar business, etc.

The Company is taking proactive steps in implementing management principles well adapted to the demands of the changing environment. The Company is operating on a well-defined plan and strategy; hence we believe, we are prepared to face any change in regulatory environment. Further, please refer Point no. 15 of Directors Report for Risk Management of the Company.

FINANCIAL PERFORMANCE

Please refer Point no. 1 of Directors Report for financial performance of the Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has satisfactory interna! control system. Please refer Point no. 12 of Directors Report for interna! control system and their adequacy.

HUMAN RESOURCE

Human resource is an essentia! element for any company. In fact a Companys performance depends on how well its employees perform. In an increasing competitive market for talent, your company contin?es to focus on attracting and retaining right talent. It is committed to provide right opportunities to employees to realize their potential.

As on 31^a March, 2024, your company has 210 employees. Keeping employee safety is the topmost priority of your Company.

CAUTIONERY STATEMENT

Statements in the Management Discussion and Analysis, describing the Companys objectives, outlook, opportunities and expectations may constitute "Forward Looking Statements" within the meaning of applicable laws and regulations. The actual result may vary materially from those expressed or implied in the statement. Several factors make a significant difference to the Companys operations including the government regulations, taxation and economic scenario affecting demand and supply condition and such other factors over which the Company does not have any direct control.

KEY FINANCIAL RATIOS

The details of significant changes in key financial ratios, along with detailed explanation thereof are as follows: