Sindhu Trade Links Ltd Management Discussions

Economic Developments and Industry View

Global economic growth remained healthy at 3.3% in CY24 consistent with the prior year. Global inflation eased to 5.7% in CY24 from 6.7% in CY23, supported by the stabilisation of supply chains post-COVID and a moderation in commodity prices. This enabled major central banks to ease monetary policy, lowering benchmark rates by 50 to 100 bps in CY24

However, geopolitical tension and policy uncertainties, including trade tariffs, led to volatility in global markets, adversely impacting energy demand, resulting in softer prices and narrower margins. Transportation fuel margins moderated from elevated levels, and downstream chemicals margins came under significant pressure due to incremental supply additions, particularly from China.

Despite global headwinds, the Indian economy was remarkably resilient. While growth moderated to 6.5% in FY 2024-25 from 9.2% in FY 2023-24, India retained its position as the fastest growing major economy in the world.

The Government of India (GoI) anticipates the nation to become the third-largest global economy by FY 2027-28, with its Gross Domestic Product (GDP) surpassing $ 5 trillion. Indian economy marches in 2 0 2 5 with renewed vigour and confidence, with its broader macroeconomic fundamentals remaining stable and robust domestic consumption demand driving the growth further north, backed by higher government spending and robust infrastructure development.

Despite challenges from weakening global trade and tariff uncertainties, India s exports remain resilient, driven by strong services exports, which comprise majorly of IT and IT- enabled services and hence, are relatively insulated from global disruptions. Looking ahead, India s structural strengths, which include prudent fiscal policies, a resilient monetary framework, and rapid digital transformation, are set to reinforce long-term, sustainable economic growth.

The year 2024 began with signs of improved economic activity across major regions. The world GDP grew at a steady rate of 3.3%. Despite divergent growth patterns across regions and sectors, the global technology landscape demonstrated unexpected stability.

However, in recent weeks, the global outlook has turned negative, as governments worldwide adjust their policy priorities, leading to unprecedented levels of uncertainty. The rapid escalation of trade tensions and extremely high policy uncertainty are anticipated to significantly impact global economic activity. Projections indicate that global growth will decline to 2.8% in 2025 and 3% in 2026. Amid these ongoing macroeconomic challenges, new discretionary projects requiring technology investments will face increased scrutiny and require stronger justifications for return on investment.

Outlook

India is one of the fastest growing economies in the world today. This growth is anticipated on the back of India becoming one of the largest manufacturing and consumption hub globally.

It signifies robust economic activity and job creation and will enable India to become one of the top three economies during this decade. It has also led to India being a preferred investment destination. The economic growth and wide consumption base in India will act as a tailwind for the growth of logistics sector too.

With India poised to become one of the leading economies in the world, logistics as a sector is bound to play an important role as economic growth is always coupled with growth of logistics sector. The logistics landscape in India has undergone significant changes like implementation of GST, e-invoicing, improvement in infrastructure and digitisation.

Overall, the demand conditions in India remain conducive to supporting economic activity. India faces the coming financial year with confidence imparted by underlying and overall macroeconomic stability, while being on the alert against geo-political and geo-economic risks.

Industry overview

For any economy, the logistics sector, encompassing transportation, warehousing, cargo consolidation and border clearances, would form the backbone of its trade and associated economic activity and growth of key sectors. The cost of trading whether by sea, land or air forms a critical component of the final price of a commodity. An efficient logistics system reduces this cost, providing a competitive edge and propelling economic activity. Growth of the Logistics business is directly correlated with economic activity. With the Indian economy on a revival path, we believe India s Logistics sector is poised for accelerated growth. Infrastructural bottlenecks that have stifled growth of the sector and have promoted inefficiency are being addressed. Looking at the future growth prospects; India is currently considered the most attractive in the world and might emerge as a major logistics hub in the future. With this forward looking attitude and a promise of growth and improvements, the service oriented logistics industry is all set to expand beyond the horizons.

India offers huge opportunity for investment. The Central and State Governments are focusing on the development and inclusive growth. With several policy measures announced by the Government coupled with seamless execution, focus on process improvement, providing end to end solutions to customer and quality of operation, the company continues to delivery in its focus areas of logistics, trading in lubricants and investment and finance activities.

Outlook on Opportunities

The global economy, though facing geopolitical and tariff- related turmoils currently, is estimated to maintain a steady growth rate of 3.3% in both 2025 and 2026. Global inflation is likely to come down to 4.2% in 2025 and 3.5% in 2026, getting closer to what central banks are aiming for. This slowdown is expected to happen faster in advanced countries than in developing ones. In countries where inflationary pressures remain persistent, central banks are expected to adopt a more cautious approach to monetary easing and interest rate reduction. Energy commodity prices are projected to decline by 2.6% in 2025, primarily due to subdued demand from China and robust supply from OPEC+ and other oil-producing nations. India is expected to sustain its robust growth trajectory, with GDP growth forecast at a healthy 6.5% in both 2025 and 2026, consistent with earlier projections and aligned with the country s long-term potential.

Fragmentation of the global economy due to trade tariffs and sanctions is a key concern being contemplated as a serious threat by many economies currently. Rising trade barriers could dampen global economic growth, disrupting supply chains and shall add to inflation, leading the Central Banks to adopt a stiffer monetary policy stance. This would in turn, lead to a higher interest environment, exacerbating the dovish consumer and investor sentiments, causing a further tumble in the stock markets around the globe.

On the other hand, considering a brighter scenario, the trade restriction currently being imposed may be renegotiated or lifted, causing the complete or partial removal of tariffs, bolstering economic growth and curbing inflation. The imposition of reciprocal tariffs by the Trump Administration in the US upon their trading partners and subsequent declaration of 90 days pause till July 2025 on the same spell a huge relief to the emerging economies, including India, driven by rising exports to the US, despite the basic levy of 10% tariff still remaining constant.

Outlook for Threats, risks and concern

While India strives to achieve its dream of becoming a US$ 5 Trillion economy by 2027, Logistics shall play a pivotal role in this transformation. From seamless transfer of goods and services from one corner of the vast geographical terrain of the country to the other to seamlessly connecting industries, government and masses, Logistics performs a crucial task of value creation, transfer and enhancement throughout the nation and across the border. However, the path to realising its full potential is fraught with multiple challenges, some of them structural to the national economy and some percolating from the global economic stage.

The overall operational costs of logistics operations around the world have seen some wide fluctuations, especially on the upside, due to escalating geopolitical strife on some important trade routes and the tariff wars between trading nations. This situation asks for reorganisation of the supply chain and exploring alternative routes, which raises the cost burden on the industry participants.

Brent crude prices, a key benchmark for global oil rates, settled at US$ 74 per barrel after fluctuating between US$ 90 and US$ 69 during the year. These shifts driven by changing geopolitical, economic, and trade conditions have made planning difficult and led to unexpected cost impacts.

The Indian logistics landscape is dominated by several small, unorganised players operating on a local scale. This often leads to a lack of coordination, awareness about larger issues pertaining to the industry or unwillingness to implement the latest technology, all resulting in suboptimal business operations and wastage of resources.

India, being the largest democracy in the world, boasts one of the best regulatory environments in the world, run by its top- notch bureaucrats. However, multiple rules and regulations of different departments such as taxation, pollution control, roadways, shipping, railways and commerce make the governance framework a very complex and often tedious, time-consuming and expensive labyrinth to navigate.

Indian logistics terrain is a mix of urban, semi-urban and rural areas where the literacy and skills gap amongst the industry personnel is wide. Lack of awareness of safety protocols and legal requirements further adds to the hindrances faced by the logistics functions, making the adoption of standardised operating procedures, latest technologies and adherence to laws difficult and often inadequate.

Logistical movement of cargo between the destinations exposes it not only to the risks such as theft, pilferage, and vandalism on the ground but also to the new-fangled sophisticated cyber- attacks. As the industry is progressively adopting the latest technological innovations for optimising routes, tracking the shipments and regulating emissions among other manifold purposes, the risks of systems malfunctioning or falling prey to organised cyber-attacks are intensifying.

India is a diverse country with high population density, diverse demography, an inadequate road network, and largely unplanned civic infrastructure. These challenges further compound the task of devising an efficient and optimum last- mile connectivity and distribution network, which is crucial for the successful client services in logistics and express delivery.

The taxation system in India, especially the indirect taxes, is intricate and possesses multiple layers of disclosure, payments and documentation. This becomes time-consuming and involves excessive expenditure for procedural compliance, in addition to the outlay for taxation. Moreover, India, being a geographically vast and culturally diverse country, requires a complex system of laws and regulations to control even some simpler, routine administrative tasks. Higher numbers of regulations lead to higher compliance costs, confusion, delays and discrepancies; reducing the overall efficiency of the sector, such as logistics, which has a nationwide reach.

As India seeks to join the ranks of developed nations with an economy worth US$ 55 Trillion by 2047, the logistics industry shall emerge as a critical enabler of this transformation. With the surge in economic activity, rising national income, and the consumption class, the consumption patterns are also undergoing a dynamic shift

Human Resources/Industrial Relations

The Company has continuously strive to attract and retain the best talent from the local markets; clearly define their roles and responsibilities; include them into robust performance management systems; create an inspiring and rewarding work environment; engage them into an inclusive work place; impart training and create development opportunities for increasing employee knowledge and efficiency to make them future ready; and create career opportunities within.

The Company is committed in ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. It strongly believes in maintaining the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited. The Company ensures that no employee is disadvantaged by way of gender discrimination.

Segment Wise or product wise performance

Due to the timely execution of the services and efficiency in implementation of policies of the Company, there has been the growth in all the sectors of the company i.e. trading in lubricants, transportation and finance and investment activities from last year s performance. With superior methodologies and improved process and systems, the Company is well positioned to lead a high growth path. The details can be extracted from the notes to accounts.

Logistics is one of the most important basic industries for any economic growth as it is the management of the flow of products from the place of their origin to the place of their consumption, thus the industry also involves the integration of material handling, warehousing, packaging, transportation, shipping security, inventory management, supply chain management, procurement, and customs service.

The Logistics sector in INDIA has today become an area of priority. One prime reason for the same stems from the reason that years of high growth in the Indian economy have resulted in a significant rise in the volume of freight traffic moved. The large volume of traffic has provided for growth opportunities in a ll facets of logistics including transportation, warehousing, freight forwarding, express cargo delivery, container services, shipping services etc. The growth path also suggests that increase demand is being placed on the sector to provide the solutions required for supporting future growth. Strength of the logistic sector is likely to be one of the key determinants of the pace of the future growth of the economy.

Cautionary statement

Certain statements in the Management Discussion and Analysis describing the Company s objectives, predictions may be forward-looking statements within the meaning of applicable laws and regulations. Actual results may vary significantly from the forward looking statements contained in this document due to various risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India, volatility in interest rates, new regulations and Government policies that may impact the Company s business as well as its ability to implement the strategy. The Company does not undertake to update these statements.

(Saurabh Sindhu)	(Rudra Sen Sindhu)
Director	Director
Din no.-02291158	Din no.-00006999