Sampark India Logistics Ltd Management Discussions

GLOBAL ECONOMY

The global economy operated through 2025 in a demanding environment, shaped by heightened geopolitical tension, evolving trade policy, and tariff-related uncertainty. Conflict in West Asia disrupted established trade routes, triggered volatility in energy markets, and elevated freight and logistics costs, while shifting tariff regimes. At the same time, protectionist measures continued to redirect trade flows and reshape sourcing decisions.

Though easing price pressures and resilient labour markets supported activity across several regions, businesses battled higher input costs, intermittent supply chain disruption and a cautious growth outlook through the year. These factors weighed on investment, cross-border trade, and business confidence, and produced an uneven operating environment across major economies.

Amid this macro environment, the global economy showed resilience, with world output growing 3.5% for the year. Moderating inflation, steady employment conditions, and sustained domestic demand across major markets supported this growth. However, performance diverged sharply by region: advanced economies expanded 1.9% collectively, while emerging markets and developing economies grew 4.5% reaffirming their position as the principal drivers of global expansion and international trade.

Aligned with the resilient global economic growth, global trade continued to recover during the year, as supply chain conditions improved and shipping networks gradually adapted to geopolitical and trade-related disruptions. Global merchandise trade volume grew by 5.0% in 2025, compared with 3.7% in 2024, reflecting a gradual improvement in cross-border trade activity despite an uncertain operating environment. Nevertheless, fluctuations in freight costs, energy prices and other key commodities continued to influence manufacturing costs, while changing trade policies and tariff-related measures affected export competitiveness across several industries. These developments reinforced the importance of efficient supply chain management and operational agility in an increasingly interconnected global economy.

Outlook

The medium-term global outlook points to a period of steady expansion, with growth projected at 3.0% for 2026 before firming at 3.4% in 2027. Underpinning this trajectory is a structural shift toward technology-led productivity - most visibly the integration of artificial intelligence across industrial operations, and the wider capability uplift it brings to manufacturing and supply chain execution. The inflation path is expected to turn through the period: headline inflation is expected to rise from 4.1% to 4.7% in 2026 before easing to 3.9% by 2027, allowing financial conditions to stabilise as the forecast horizon lengthens.

The broader picture remains cautiously constructive, supported by moderating pricing pressure, improving business confidence, and a gradual recovery in international trade. For logistics operators, the most consequential development is the continued diversification of global supply chains and the adoption of China+1 sourcing strategies, which are directing manufacturing volume, and the freight that accompanies it, towards economies such as India. Evolving trade policy, tariff-related measures and geopolitical uncertainty are nonetheless likely to remain the dominant variables influencing global demand, input costs, and export competitiveness over the near term.

INDIAN ECONOMY

Indias economy demonstrated notable resilience through FY 2025-26, retaining its position among the worlds fastest-growing major economies against a global backdrop of geopolitical tension, trade fragmentation, and financial market volatility. According to provisional estimates released by the Ministry of Statistics and Programme Implementation, Government of India, real GDP grew 7.7% during the year, accelerating from 7.1% in FY 2024-25. In the same period, Gross Value Added expanded 7.9%.

Growth was broad-based rather than concentrated in a single sector, drawing on strong domestic consumption, sustained investment momentum, and expansion across manufacturing, construction and services. Domestic demand strengthened across both rural and urban markets, creating a favourable environment for the manufacturing and industrial customers served by the Company. Rural activity was supported by a normal monsoon and improved agricultural incomes, which lifted offtake across two-wheelers, tractors and commercial vehicles. Urban demand was underpinned by growth in the services sector, as well as the GST rate rationalisation introduced during the year, which raised volumes across passenger vehicles, electronics and appliances.

For logistics operators, the significance of consumption recovery lies less in the retail transaction than in the production schedule that precedes it: sustained end-demand translates directly into stable, forecastable freight requirements across the manufacturing chain.

Public capital expenditure remained a principal engine of activity, with Central Government capital expenditure rising 14.5% from April 2025 to February 2026. Investment at this scale carries a compounding effect for the logistics sector, expanding the road, rail, port and airport capacity across which freight moves. At the same time, it generates the industrial and project cargo that moves through these modes - the Economic Survey estimates a multiplier of 2.50 to 3.50 in GDP for every rupee of government capital spending over the medium term.

The Union Budget reiterated this emphasis, retaining the fiscal deficit target at 4.4% of GDP while directing continued allocation towards infrastructure, manufacturing and digital public infrastructure - a policy mix that expands the addressable freight base over a multi-year horizon rather than a single budget cycle. The inflation environment remained benign through most of the year, enabling the Reserve Bank of India to reduce the policy repo rate by a cumulative 125 basis points to 5.25% by December 2025 and lower the Cash Reserve Ratio by 100 basis points to 3.0%. For a working-capital intensive industry in which extended receivable cycles are financed through borrowed facilities, the resultant easing in liquidity and borrowing costs carries direct operational relevance. Towards the close of the year, escalating tension in West Asia lifted global crude prices, creating upward pressure on freight, fuel and input costs - a reminder that energy price movement remains the principal near-term variable in logistics cost structures.

Structural reform continued to reshape the operating environment for organised logistics providers. Sustained policy support through Production Linked Incentive schemes and the Make in India programme, reinforced by supply chain reform, has improved Indias cost competitiveness and positioned the country as a principal beneficiary of the global China+1 sourcing strategies - particularly across automobiles, electronics manufacturing services, the verticals in which the Company is most deeply embedded. Alongside this, the continued formalisation of commerce through expanded GST coverage, e-way bill enforcement, and rising digital adoption has narrowed the cost advantage historically available to unorganised operators, making auditable, invoice-backed service providers materially more attractive to corporate procurement functions.

Each relocation of manufacturing capacity to India generates a corresponding requirement for inbound component movement, inter-plant transfer, and outbound distribution, and each incremental step in formalisation tilts that requirement towards compliant, system-led operators. Against a stable fiscal and external position, with a current account deficit of approximately 1.0% of GDP, these structural forces continue to provide a supportive foundation for manufacturing output and, by extension, for the freight demand that accompanies it.

Outlook

The outlook for the Indian economy remains positive and stable. For FY 2026-27, real GDP is expected to grow between 6.8% and 7.2%, demonstrating the countrys ability to maintain strong momentum even during global uncertainty. This growth will likely be fuelled by ongoing government spending on infrastructure, a steady increase in private sector investment, and a strengthening manufacturing base. Additionally, the services sector is expected to continue its consistent expansion. Backed by a stable economy and steady government policies, India is well prepared to manage global challenges while ensuring that economic progress remains inclusive and sustainable over the long term.

(Source: Ministry of Statistics and Programme Implementation (MoSPI) Estimated; Press Information Bureau - Press Note on New Series, Reserve Bank of India - Monetary Policy Statements, Economic Survey 2026)

INDUSTRY OVERVIEW

Global Logistics Industry

The global logistics industry has entered 2026 amid a complex operating environment, shaped by geopolitical tensions in the Middle East, evolving global trade corridors, supply chain realignment, and rapid technology-led transformation. While near-term challenges, including freight route disruptions and elevated energy costs, continue to drive volatility, the industrys long-term structural growth drivers remain robust. The continued expansion of e-commerce, increasing adoption of AI and digital technologies, and sustained investments in logistics and transport infrastructure are expected to support enduring growth across geographies and freight segments.

The global logistics market is projected to expand from USD 12.68 trillion in 2026 to USD 24.36 trillion by 2035, representing a CAGR of 8.05%. Asia-Pacific is expected to remain the largest and fastest-growing regional market, rising from USD 5.78 trillion in 2026 to USD 12.11 trillion by 2035 at a CAGR of 9.10%. The region is expected to account for approximately 44.59% of the global logistics market by 2035.

Against this backdrop, countries are accelerating trade negotiations and forging new economic partnerships to strengthen cross-border trade and build more resilient supply chains. This is driving greater nearshoring, regionalisation and diversification of sourcing and manufacturing networks. India is emerging as an important beneficiary of this global shift, supported by strengthening logistics infrastructure and improving multimodal connectivity. Cargo movement through national waterways has reached record levels, port capacity has expanded significantly, and container turnaround times have improved. Further, the Union Budget 2026-27s proposal to operationalise 20 new national waterways is expected to strengthen Indias logistics infrastructure and reinforce its position as a strategically important, high-growth logistics hub.

Indian Logistics Industry

Indias logistics sector is witnessing sustained growth, supported by significant infrastructure investments, progressive policy reforms, and rapid technology adoption. These developments are enhancing network efficiency, improving connectivity, and driving the sectors formalisation. Demand for premium Grade A warehousing is growing, supported by increasing institutional capital inflows and development of investment-grade assets through established developer-led platforms, signalling the sectors gradual transition towards greater organisation and maturity.

Despite these positive trends, Indias logistics industry remains highly fragmented. Road transportation continues to account for over 60% of total freight movement, while rail, air and inland waterways are steadily increasing their share, supported by targeted government initiatives and infrastructure development. At the same time, demand for Grade A and Grade B warehousing, multimodal logistics solutions, AI-enabled supply chain optimisation, and digital freight platforms is gaining momentum.

Within the organised logistics segment, the market has demonstrated meaningful growth and is expected to expand further, as presented in the table below.

Segments	Organised Market size (2026E) (? 000 Crores)	CAGR
3PL	51	7-8%
Last-Mile Delivery	15	13-14%
B2B Express	14	10-11%
Freight-Forwarding	12	6-7%

The current trends indicate that the Indian logistics sector is at an inflection point, aided by policy reforms, sustained infrastructure investments, and rapid digitalisation. Initiatives such as PM GatiShakti and the National Logistics Policy, coupled with the growing adoption of green logistics practices, are driving the sector towards a more integrated, cost-efficient and sustainable operating ecosystem. As the industry matures, the traditional transportation and warehousing-led model is expected to evolve towards higher-value, technology-enabled and integrated logistics solutions, strengthening Indias position as a global logistics hub.

Technology is increasingly transforming logistics operations across the value chain. AI-powered optimisation, automated warehousing, and predictive analytics are enhancing operational efficiency and supply chain execution, while end-to-end visibility, IoT-enabled tracking, and digital freight-matching platforms are rapidly becoming industry standards rather than competitive differentiators.

Opportunities

Accelerating Formalisation and Organised Logistics

Increasing supply chain complexity, stringent compliance standards, and evolving customer expectations are driving a gradual shift towards organised logistics service providers. Established players offer standardised operating processes, technology-enabled visibility, and the scale required to manage increasingly complex, pan-India supply chains. The wider adoption of GST, e-way bills and digital freight platforms has further encouraged formalisation, creating a structural advantage for compliant and technology-enabled operators.

Growing Multimodal Integration and Infrastructure Development

Road transportation continues to account for over 60% of Indias freight movement, despite railways and inland waterways offering significantly lower transportation costs per tonne over suitable routes. With the scope for incremental efficiency gains within road transportation becoming more limited, greater adoption of alternative modes is emerging as an important avenue for reducing overall logistics costs. Investments in Dedicated Freight Corridors, Multimodal Logistics Parks and Inland Waterways are strengthening multimodal connectivity, and facilitating a gradual shift towards a more efficient freight ecosystem.

Indias Manufacturing Momentum

Indias manufacturing ecosystem is gaining momentum, supported by sustained policy intervention, improving infrastructure, and the ongoing realignment of global supply chains. The Make in India programme, implemented across 27 sectors, has contributed to strengthening domestic manufacturing capabilities, investment, and innovation. Complementary initiatives, such as Production Linked Incentive (PLI) schemes, PM GatiShakti, the National Logistics Policy and GST, are further improving Indias cost competitiveness and enabling more efficient supply chains.

As of December 31, 2025, these initiatives have attracted investments of more than ?2.16 lakh crore, generated incremental production exceeding ?20.41 lakh crore, and supported employment creation of over 14.39 lakh. These developments position India to capture a larger share of global manufacturing under the China+1 strategy, with sectors such as automobiles emerging as key beneficiaries. Targeted incentives, including the US$3 billion PLI scheme for advanced automotive and electric vehicle components, are further strengthening Indias potential to emerge as an important manufacturing base within global value chains.

Challenges

Indias logistics ecosystem has demonstrably made substantial progress, with the DPIIT-NCAER study placing logistics costs at approximately 7.97% of GDP, significantly below the earlier estimates of 13-14%. This improvement has been facilitated by a combination of policy reforms and infrastructure upgrades, including GST rationalisation, expansion of FASTag, and development of Dedicated Freight Corridors. Initiatives such as the ADB-supported SMILE programme are further supporting improvements in warehousing standards and trade logistics, and adoption of efficient, low-emission logistics solutions.

Notwithstanding this progress, the sector continues to face several structural constraints. Freight movement remains predominantly road-based, while railways, inland waterways and coastal shipping which can offer cost and environmental advantages remain relatively underutilised. Further, fragmented supply chains across agriculture, cold-chain logistics and express freight continue to limit economies of scale and service consistency, particularly in semi-urban and remote markets.

Volatility in energy prices remains another key risk, particularly given Indias significant dependence on road transportation. Geopolitical developments in the Middle East could increase fuel and freight costs, highlighting the need to accelerate the shift towards multimodal transportation and improve integration across logistics networks. Enhanced adoption of digital platforms, real-time data exchange, and technology-enabled supply chain management will be critical to improving efficiency and reducing operating costs.

The industry also faces challenges related to regulatory complexity, cybersecurity threats, and availability of skilled talent. As logistics operations become increasingly automated and data-driven, strengthening digital infrastructure, cybersecurity capabilities and workforce skills will be essential to support the adoption of AI, automation and other next-generation logistics technologies.

Policy-led Transformation Accelerating Indias Logistics Ecosystem

Building the Backbone of National Connectivity

PM GatiShakti	Creating integrated infrastructure grid to synchronise road, rail, port and air connectivity
Bharatmala	21,700+ km constructed, strengthening freight corridors and reducing transit bottlenecks

Indias National Logistics Policy (NLP) is focused on building a more efficient, integrated and cost-competitive logistics ecosystem, with the broader objective of bringing Indias logistics performance in line with global benchmarks. The policy framework is supported by initiatives such as PM GatiShakti, Multimodal Logistics Parks (MMLPs), and digital platforms including the Unified Logistics Interface Platform (ULIP) and Logistics Data Bank (LDB).

Together, these initiatives are improving coordination across different modes of transportation, enabling greater supply chain visibility and reducing operational inefficiencies. By promoting seamless multimodal connectivity and increased use of technology and data, the NLP is expected to enhance logistics productivity, strengthen Indias competitiveness, and support broader economic growth.

COMPANY OVERVIEW

Sampark India Logistics Limited is a pan-India, multimodal integrated logistics company, serving business-to-business (B2B) supply chains with no business-to-consumer exposure. Its revenue is generated from embedded participation in the inbound, inter-plant and outbound supply chains of original equipment manufacturers (OEMs) and industrial customers.

Key Strengths

Multimodal execution

The Company moves cargo across road, air and rail under a single commercial relationship. It selects the mode by cost-to-service requirement rather than by asset availability. This modal flexibility allows Sampark to absorb changes in customer urgency - a schedule advance, a line-stoppage risk, a production ramp - without renegotiating the contract or introducing a second vendor.

Ownership of every mile

The Company executes first-mile collection from supplier locations, mid-mile line-haul with in-transit visibility, transshipment and value-added handling, as well as last-mile delivery to the customer plant on schedule. Clients therefore deal with one accountable counterparty rather than a chain of handoffs.

Asset-light infrastructure

Samparks warehousing is leased; the majority of the line-haul fleet is tied up on a variable, demand-flexed basis, and the branch network operates on a low-capex footing supported by technology. The Company owns a core fleet of 50+ vehicles for service-critical and dedicated movements. This structure allows network expansion to keep pace with demand without a corresponding step-up in fixed capital.

Supply orchestration under the umbrella model

Beyond transportation, the Company increasingly takes responsibility, from sourcing to specification, vendor coordination, packaging, warehousing and delivery, under a single integrated arrangement. This model boosts the Companys share of each customers logistics spend, deepens integration with the customers production planning, and lengthens contract tenure.

As at March 31, 2026, the Company served 2,000+ corporate clients across 14,000+ serviceable pin codes, operated approximately 1,24,500 sq ft of warehousing capacity.

Business and Segment Review

The Company reports its performance as a single operating segment. The following discussion of service lines is provided for a fuller understanding of the revenue base.

Surface freight: The Companys largest service line, this comprises part-truckload, full-truckload and over-dimensional cargo movement across Samparks pin-code network. Surface freight provides the volume base over which network fixed costs are absorbed. It remains the principal entry point for new customer relationships.

Air cargo: This is a differentiated and materially higher-realisation service line, addressing time-critical and schedule-driven movements where the cost of a production line stoppage substantially exceeds the freight premium. The Companys presence across 40+ domestic cargo airports, together with its QSS (Quicker Smarter Service) and Flyer products, positions it in a segment where few regional operators can compete on reliability.

Rail freight: This enables cost-efficient bulk movement on dedicated freight routes, deployed where transit-time tolerance permits, and where the modal economics benefit the customer.

Warehousing and packaging: This covers leased storage, inventory management and order staging, together with reusable and collapsible packaging supplied on rent.

Umbrella supplier services: The Companys integrated arrangement, this covers supply orchestration, vendor coordination, warehousing and logistics execution under a single platform. This line scaled during the year, and carries a structurally richer margin profile than standalone transportation.

International logistics: This encompasses cross-border cargo movement and end-to-end supply chain management, cross-sold into the existing OEM and corporate base.

Financial Overview

Financial Performance FY 2025-26

Particulars	FY 26	FY 25
Revenue (In Lakhs)	22,326.64	20,096.51
EBITDA (In Lakhs)	2,001.43	1,623.12
EBITDA Margin (%)	9.0%	8.1%
PAT (In Lakhs)	1,052.68	835.3
PAT Margin (%)	4.7%	4.2%
ROCE (%)	21.0%	20.6%

Key Strategic Outlook

The Company has identified the following strategic priorities to drive its growth trajectory, in line with its vision and mission.

Monetise the built platform: Fifteen years of investment in hubs, airport presence, branch infrastructure, functional teams and technology is substantially complete and largely paid for. This has helped build the foundation for the Company to convert incremental volume to profit at a materially higher rate than the average. Margin expansion is, therefore, expected to be led by throughput on the existing network rather than by price.

Increase wallet share within the captive base: The Companys existing 2,000+ corporate relationships constitute a readymade addressable base for warehousing, packaging, international logistics, and umbrella arrangements. Selling an additional service into an account that has already validated the Companys execution carries a fraction of the acquisition cost of a new logo and materially higher conversion probability. This makes cross-sell the most capital-efficient route to revenue growth for the Company.

Enrich the revenue mix: Umbrella supplier arrangements, returnable packaging, and value-added services carry richer realisations, longer contract tenures, and higher switching costs than standalone transportation. Growth in this mix improves not only the level of margin but its durability, since revenue earned under integrated arrangements is structurally less exposed to rate-based competition than point freight.

Scale international logistics: It also opens a cross-sell path into the Companys existing multinational customer relationships, allowing the international business to be scaled through accounts already held rather than through new-logo acquisition.

Tighten the working-capital cycle: Improvement in the collection cycle remains a stated management priority. Releasing cash trapped in the operating cycle improves cash conversion and return ratios. It further allows a greater proportion of growth to be funded internally rather than through incremental borrowing.

Hold the asset-light structure through scale: Warehousing remains leased, the majority of line-haul capacity remains tied up on a demand-flexed basis, and the owned fleet remains reserved for service-critical and dedicated movements. This structure allows geographic and volume expansion to track demand without balance-sheet drag, and it is the basis of the Companys return-ratio positioning against larger peers who have added scale without corresponding margin.

Risks and Concerns

Key Risk	Description	Mitigation
Sectoral concentration	Revenue is significantly exposed to the automotive sector, making volumes vulnerable to downturns in vehicle production, prolonged component shortages, or shifts in OEM sourcing patterns.	The Company has diversified into FMCG, pharmaceuticals, EMS, electricals and international logistics, each carrying independent demand cycles. The automotive base is itself spread across passenger vehicles, two-wheelers, commercial vehicles, EVs and component suppliers rather than a single sub-segment.
Receivable and working-capital risk	Working capital is concentrated in receivables from large corporate customers, exposing liquidity to extended payment cycles, disputes or defaults and increasing reliance on borrowed funds.	The Company undertakes structured credit assessment before onboarding, ageing-based escalation, and centralised collections monitoring. Proceeds of the initial public offering are earmarked in part towards working capital, reducing dependence on borrowed facilities.
Fuel and input cost volatility	Diesel prices, air freight rates, rail haulage charges and driver wages are material cost inputs. Sustained increases compress margin where recovery lags the cost event.	Pass-through clauses are embedded in OEM contracts. Multimodal capability allows a shift of volume between road, rail and air, where relative cost economics move materially so that exposure is not concentrated in a single input.
Transit, cargo loss and liability risk	Cargo in transit is exposed to accidents, damage, pilferage and delays, resulting in financial losses, customer claims and potential production stoppages in time-sensitive OEM supply chains.	The Company has adopted cargo and transit insurance coverage, real-time consignment tracking across all three modes, systems-enforced proof-of-delivery capture, and defined handling and packaging protocols at transshipment points.
Technology and cyber risk	Customers increasingly rely on real-time visibility as a condition of contract. Interruption to tracking, booking or documentation systems, or a data security incident, would affect service delivery and customer confidence.	The Company undertakes access controls, scheduled backups and restoration testing, and periodic review of information security practices, overseen by a dedicated IT team.

Internal Control Systems and Their Adequacy

The Company maintains internal control systems commensurate with the nature, size and complexity of its operations. These systems are designed to provide reasonable assurance regarding the safeguarding of assets, the prevention and detection of fraud and error, the accuracy and completeness of accounting records, as well as the reliability of financial reporting and compliance with applicable statutes.

The control framework covers delegation of authority for commitments and payments, systems-enforced controls over consignment booking, transshipment and proof of delivery, periodic reconciliation of vendor and customer balances, and structured credit assessment and monitoring of receivables. The Companys internal audit function, headed by an experienced professional reporting to the Audit Committee, conducts risk-based reviews across branches and functions on a planned cycle. Observations, management responses, and the status of remediation are reported to the Audit Committee, which reviews the adequacy and effectiveness of the internal control systems and the internal audit function.

Human Resources

The Companys operations are executed by 342 employees across corporate, branch, warehouse and operating functions, supported by an experienced senior management team with cumulative industry experience across transportation, air cargo, warehousing, finance, technology, and customer service.

During the year, the Company continued to invest in functional capability, particularly in international logistics and umbrella supply orchestration, where the addition of trained personnel is a precondition to scaling those service lines. Focus areas included structured induction for operating staff, safety and handling training for warehouse and transshipment personnel, and capability building in technology-enabled tracking and customer service.

Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may constitute forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include, among others, economic conditions affecting demand and supply and price conditions in the domestic and overseas markets in which the Company operates, changes in government regulations, tax laws and other statutes, fuel and input cost movements, and other incidental factors. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statement on the basis of any subsequent development, information or events.