Snowman Logistics Ltd Management Discussions

I) Industry Structure and developments

Snowman Logistics Limited (hereinafter referred to as the Company) continues to strengthen its position as a key player in Indias cold chain logistics sector, building on the solid foundation laid in previous years. In light of ongoing shifts in consumer demand, regulatory frameworks, and the broader supply chain landscape, the Company remains committed to adapting and expanding its capabilities. With a well-established network of temperature-controlled warehouses and a fleet of refrigerated vehicles, Snowman Logistics delivers integrated, end-to-end cold chain solutions to a diverse customer base spanning the food, pharmaceutical, retail, and FMCG sectors. During the year, we have placed greater emphasis on digital transformation, automation, and sustainability to enhance operational efficiency and meet the increasing demand for traceability and compliance.

Our investments in advanced technologies continue to support accurate inventory management, real-time order tracking, and optimized distribution services. This positions the Company as a strategic partner to businesses seeking resilient, scalable, and cost-effective cold chain logistics solutions in a rapidly evolving market. As we move forward, our commitment to quality, service excellence, and customer-centric innovation remains central to our growth strategy, ensuring we remain responsive to market needs and aligned with our clients long-term goals.

Overview of the Global economy

The global economy in 2024-25 has shown resilience despite elevated geopolitical tensions, persistent inflationary pressures, and monetary tightening across major economies. According to the International Monetary Fund (IMF)s April 2025 World Economic Outlook, global GDP growth is projected at 2.8% in 2025, a slight improvement from 2.6% in 2024, yet still below the long-term average. Advanced economies are expected to grow at a modest pace, constrained by high interest rates and fiscal consolidation, while emerging markets are anticipated to contribute a larger share to global growth, particularly in Asia.

Trade activity has remained relatively stable but cautious. The World Trade Organization (WTO) projects global merchandise trade volume to grow by approximately 2.7% in 2025, reflecting a moderate recovery following subdued performance in 2023 and 2024. However, global trade continues to face headwinds from ongoing conflicts in Eastern Europe and the Middle East, along with increasing use of trade restrictions and tariffs. Rising protectionism and shifting trade alliances have created uncertainty for supply chains and have slowed the pace of global industrial output.

Inflation has started to ease globally but remains above pre-pandemic levels. As per IMF estimates, global inflation is expected to decline to 4.3% in 2025 and further to 3.6% in 2026, supported by lower commodity prices and tighter monetary policies. While advanced economies are likely to reach their inflation targets sooner, many developing countries still face inflationary risks tied to currency volatility and imported goods. These economic indicators suggest a cautious but ongoing recovery, set against a backdrop of structural shifts in trade, policy, and production patterns.

Overview of the Indian economy

Indias logistics sector is a vital component of the national economy, contributing approximately 13-14% to the GDP and enabling efficient movement and storage of goods across diverse industries. The sector has been undergoing rapid transformation fueled by increased infrastructure investments, technology adoption, and evolving customer demands. Growth drivers include expanding e-commerce, rising consumption, and government initiatives aimed at reducing logistics costs to under 10% of GDP, alongside streamlining regulatory frameworks.

A notable trend within the industry is the rise of advanced logistics solutions such as Third-party logistics (3PL) and fifth-party logistics (5PL) services, which focus on end-to-end supply chain management and complete outsourcing of logistics operations, respectively. These models emphasize integrating multiple service providers, leveraging digital platforms, and optimizing the entire supply chain to enhance efficiency and responsiveness. Snowman Logistics Limited, as a key player in this space, offers comprehensive 3PL and 5PL services that allow customers to benefit from consolidated supply chain visibility, reduced complexities, and cost-effective, technology-enabled logistics solutions.

The governments flagship PM Gati Shakti National Master Plan further supports the sector by fostering multimodal connectivity through substantial capital expenditure-?11.21 lakh crore allocated for FY 2025-26- with ?11.17 lakh crore directed towards 434 major infrastructure projects. Investments in highways, ports, railways, and logistics parks are improving freight mobility and reducing turnaround times. Simultaneously, digitization, warehouse automation, and AI adoption are driving operational efficiencies and supply chain transparency across the industry.

The warehousing and cold chain segments are also experiencing accelerated growth, propelled by demand from sectors such as food, pharmaceuticals, and retail. The increasing shift towards organized and outsourced logistics services, including 3PL, and 5PL models, reflects a maturation of the market. Alongside this, environmental sustainability has gained prominence, with growing deployment of green warehouses, renewable energy, and eco-friendly transport solutions reshaping the logistics landscape for greater operational resilience and compliance with global ESG standards.

Indian Logistics Industry - Size & Structure

Indias logistics sector plays a pivotal role in supporting the countrys manufacturing activities and broader economic growth, bolstered by government initiatives such as PM Gati Shakti and the National Logistics Policy (NLP). The industry is witnessing a rising demand for premium, state-of-the-art warehouses, driven by increased investments from institutional developers focused on creating investment-grade assets. This reflects a clear trend toward market maturation, with the sector evolving into a more organized and efficient ecosystem.

According to recent market analyses, the logistics industry is expected to sustain a steady compound annual growth rate (CAGR) of approximately 9.3%, potentially reaching a valuation near ?40 lakh crore by 2029. The premium warehousing segment is outpacing overall growth, expanding at around 15% annually. This surge is propelled by a domestic preference for Grade A warehouse facilities, which are constructed using superior materials, incorporate advanced automation technologies, and are strategically positioned to optimize transportation and distribution efficiency.

The logistics landscape in India is highly heterogeneous, comprising startups, SMEs, large domestic enterprises, and multinational players. Road transport remains the dominant mode, accounting for over 60% of sector activity. However, rail, air, and coastal shipping are progressively gaining prominence, supported by policy measures encouraging multimodal transport solutions. Government initiatives like the development of Multimodal Logistics Parks (MMLPs), dedicated freight corridors, and digital freight platforms are instrumental in reducing logistics costs and improving transit times.

Technological innovation is fundamentally transforming the sector. Artificial intelligence (Al)-driven logistics optimization, automated warehousing, and predictive analytics are streamlining supply chains. Enhanced end-to-end visibility through Internet of Things (IoT) tracking and digital freight matching platforms is rapidly becoming standard practice, significantly boosting operational efficiency. Despite these advancements, logistics costs in India remain elevated at 13-14% of GDP-above the global benchmark of 8-10%-due to factors such as incomplete multimodal integration, high fuel expenses, and infrastructure constraints. The rollout of the Unified Logistics Interface Platform (ULIP), easing of regulatory burdens, and continued capital investments-including ?11.17 lakh crore under PM Gati Shakti-are key efforts aimed at overcoming these challenges by developing logistics hubs, expressways, and freight corridors.

Contract logistics is emerging as a vital growth driver, especially in sectors like automotive, pharmaceuticals, e-commerce, and industrial manufacturing. This segment is expected to grow at an annual rate between 8-10%, reaching an estimated ?24 lakh crore by 2025-26. The B2B express logistics market is expanding rapidly, with a projected CAGR of 15%, driven by the rising demand for direct-to-consumer services, omnichannel fulfillment, and expedited delivery. This segment is more consolidated, with leading players commanding close to 70% market share.

Indias freight forwarding sector, currently valued at around ?45,600 crore, is poised for an 8% CAGR between 2024 and 2026. Growth is underpinned by government infrastructure projects, increasing exports, and strategic supply chain realignments aligned with the China+1 diversification strategy. Key industries such as pharmaceuticals, food processing, engineering, and chemicals continue to fuel demand in this area. The last-mile delivery market remains the fastest growing segment, expanding at a 25% CAGR, with a forecasted valuation of ?36,500 crore by 2026. Innovations such as quick commerce, the Open Network for Digital Commerce (ONDC), and drone deliveries are driving rapid evolution, although last-mile logistics still represents the most costly link in the supply chain, necessitating ongoing efficiency improvements.

Overall, Indias logistics sector stands at a transformative juncture. Driven by policy reforms, substantial infrastructure investments, and rapid digital adoption, the industry is progressing towards a more integrated, cost-effective, and sustainable model. Initiatives like PM Gati Shakti and the National Logistics Policy, alongside an increasing focus on green logistics, are paving the way for the transition from traditional transportation and warehousing towards technologically advanced, high-value integrated logistics solutions. This evolution positions India to emerge as a leading global logistics hub in the coming years.

Principal Government Initiatives

Indias logistics costs currently stand at approximately 14% of GDP, significantly exceeding the global benchmark of 8-10% observed in developed economies. This disparity is largely due to inefficiencies such as slower transportation speeds, elevated transit inventory, theft, damages, and a skewed modal mix dominated by road transport, which accounts for over 60% of freight movement. To address these challenges, the Government of India has launched transformative policies including the National Logistics Policy (NLP) and the PM Gati Shakti National Master Plan (NMP). These initiatives, along with technology-driven platforms like the Unified Logistics Interface Platform (ULIP) and the Open Network for Digital Commerce (ONDC), aim to enhance efficiency, reduce bottlenecks, and position India as a competitive global logistics hub, advancing the countrys vision of a $5 trillion economy.

The NLP, introduced in September 2022, targets reducing logistics costs to 8% of GDP by 2030 through infrastructure upgrades and digital integration. Progress to date includes the development of Multimodal Logistics Parks (MMLPs), increased adoption of AI for route optimization, and implementation of the ULIP to facilitate end-to-end supply chain transparency. Complementing these efforts, the government is advancing Dedicated Freight Corridors (DFCs) with 96.4% operationalization as of March 2025, enhancing freight capacity and reducing transit times. The Sagarmala Programme further accelerates port-led growth by investing in coastal shipping and inland waterways, significantly easing pressure on road and rail networks.

In parallel, digital commerce is being revolutionized through ONDC, which recorded over 1.6 crore orders in March 2025 alone. This platform, launched by DPIIT, democratizes e-commerce by enabling small sellers to compete with major players, supported by partners like Uber exploring new service avenues. Initiatives such as Nirmit Bharat and the DigiHaat buyer app expand market access for artisans, farmers, and small enterprises, promoting inclusive growth. Together, these infrastructure investments, policy reforms, and digital innovations are transforming Indias logistics ecosystem into a more integrated, efficient, and sustainable framework poised to meet the demands of a rapidly evolving economy.

Opportunities and Threats

The Indian logistics sector is undergoing a transformative phase, driven by substantial infrastructure investments, progressive policy frameworks, and a surge in digital commerce. The governments strategic initiatives, including

the National Logistics Policy (NLP) and PM Gati Shakti National Master Plan, have laid a robust foundation for enhancing logistics efficiency and reducing costs. These efforts are complemented by significant infrastructure projects such as the Delhi-Mumbai Expressway and the Amritsar-Jamnagar Expressway, which are set to revolutionize connectivity and streamline supply chains across the country.

As of March 2025, Indias logistics cost as a percentage of GDP stands at approximately 14%, a figure that remains higher than the global benchmark of 8%. However, the governments commitment to infrastructure development and policy reforms is expected to drive this cost down to single digits in the near future . Concurrently, Indias Logistics Performance Index (LPI) ranking has improved from 44th in 2018 to 38th in 2023, reflecting enhanced logistics efficiency and competitiveness on the global stage .

The rise of e-commerce and digital retail has further accelerated the demand for agile and efficient logistics solutions. Consumers increasingly expect timely and reliable deliveries, prompting businesses to seek logistics partners capable of meeting these evolving expectations. In this dynamic environment, Snowman Logistics Limited is strategically positioned to capitalize on emerging opportunities and address the challenges of the modern logistics landscape.

Based on the aforementioned factors, the company is poised to capitalize on the following opportunities: Opportunities

1. Growing Demand for Integrated and Flexible Solutions

Rapid growth in Tier 2 and 3 cities, supported by government initiatives and e-commerce expansion, is driving demand for scalable and customized logistics services. Snowman Logistics is well-positioned with energy-efficient warehouses and dedicated transportation services that offer flexibility and efficiency to meet evolving client needs.

2. Expansion in E-commerce, D2C, and Hyperlocal Fulfillment

The rise of digital retail and omnichannel strategies is increasing the need for quick, reliable last-mile delivery and express logistics. Snowmans technology-driven platforms and sector expertise enable it to effectively serve fast-growing markets like FMCG, pharmaceuticals, and quick commerce.

3. Advancement in Multimodal and Cross-Border Logistics

National infrastructure projects and supply chain realignments are promoting multimodal transport and boosting cross-border trade. Snowman is expanding its multimodal offerings and freight forwarding capabilities, positioning itself to benefit from cost-effective and efficient logistics solutions in domestic and international markets.

4. Rising Focus on Green and Sustainable Logistics

With logistics contributing significantly to carbon emissions, there is growing demand for eco-friendly solutions. Snowman is strengthening its green logistics portfolio by adopting carbon-neutral operations and investing in sustainable infrastructure, aligning with environmental standards and client expectations for sustainable supply chains.

By strategically aligning with these opportunities, logistics service providers can position themselves to capitalize on Indias evolving economic landscape and meet the dynamic needs of modern businesses and consumers.

Threats:

1. Economic Slowdown Impacting Freight Demand and Asset Utilization

The prevailing economic slowdown has resulted in subdued consumption patterns, leading to reduced freight volumes and underutilization of logistics networks. Key sectors such as FMCG and automotive have experienced disruptions, placing significant pressure on logistics service providers to maintain resource efficiency and profitability amidst fluctuating demand.

2. Geopolitical Risks Affecting Supply Chain Stability

Escalating geopolitical tensions globally pose a considerable risk to supply chain continuity. These conflicts can trigger disruptions through forced rerouting, increased commodity prices, and inflationary pressures, ultimately impacting timely deliveries and cost structures. Such volatility necessitates proactive risk management strategies to safeguard operations and client commitments.

3. Regulatory Complexity and Infrastructure Limitations

Heightened regulatory scrutiny across the logistics ecosystem has led to increased audits and quality inspections under national initiatives aimed at enforcing compliance and service standards. Non-compliance risks operational penalties and reputational damage, underscoring the importance of rigorous adherence to regulations. Concurrently, infrastructure bottlenecks-including persistent congestion on roads and slow development of multimodal hubs-continue to impede last-mile delivery efficiency, especially in Tier 2 and Tier 3 cities, necessitating targeted investments in smart urban logistics and micro-fulfilment capabilities.

4. Talent Shortages and Wage Inflation

The sector faces ongoing challenges in sourcing and retaining skilled labor, particularly during peak demand periods. This talent scarcity drives wage inflation, increasing operational costs. While competitive compensation is essential to ensure workforce quality and productivity, it may exert upward pressure on pricing, requiring careful balancing between cost management and service excellence.

5. Pricing Pressure Amid Rising Input Costs

Escalating commodity prices, especially crude oil, have led to increased input costs, prompting clients to intensify cost control measures. This has resulted in heightened pricing pressure within contract logistics and last-mile delivery segments, compelling Snowman Logistics to focus on delivering value-added services while implementing robust cost-optimization initiatives to maintain competitive advantage.

Addressing these multifaceted threats requires a comprehensive risk management approach, including scenario planning, diversification strategies, and proactive measures to enhance resilience and mitigate potential disruptions in the logistics sector.

II) Segment-wise/ Product-wise performance

The Company mainly operates in the following segments:

(a) Warehousing services

(b) Transportation services

(c) Trading and distribution

The Following is a table illustrating the financial performance of the different segments of the company:

III) Business Outlook

The outlook for the Indian logistics sector remains positive, underpinned by sustained policy support, infrastructure development, and the structural expansion of consumption and manufacturing. With GDP growth expected to remain strong at 6.2% in 2025 (IMF), and capital investment continuing to be a key economic lever, demand for integrated and temperature-controlled logistics solutions is anticipated to rise. Government initiatives such as the National Logistics Policy, continued rollout of multimodal logistics parks, and integration of the Unified Logistics Interface Platform (ULIP) are expected to reduce inefficiencies and enhance coordination across the supply chain.

The express logistics and cold chain segments are poised for rapid growth, supported by the increasing penetration of e-commerce, the formalisation of food supply chains, and pharmaceutical distribution requirements. As a specialised player in cold chain logistics, Snowman Logistics Limited is well-positioned to leverage these trends through its pan-India footprint, technologically advanced warehousing network, and dedicated transportation solutions. Strategic investments in energy-efficient infrastructure, digital process integration, and automation will further enhance service capabilities and cost efficiency.

However, the sector also faces certain challenges, including fluctuating energy costs, labour availability, regulatory compliance, and geopolitical disruptions affecting global trade routes. Managing these risks will require a balanced approach involving operational agility, investment in sustainable practices, and continuous innovation. Overall, the Indian logistics sector is expected to remain a critical enabler of economic growth, and Snowman Logistics is committed to playing a leading role in delivering value-driven, compliant, and future-ready logistics solutions.

IV) Risks and Concerns

Snowman Logistics Limited recognises that operating in a dynamic and evolving environment entails exposure to various internal and external risks, each of which can materially impact business performance, stakeholder value, and long-term sustainability. In response, we have adopted a proactive and structured approach to risk identification, assessment, and mitigation across all operational verticals.

The continued macroeconomic headwinds, including inflationary pressures, global supply chain disruptions, and subdued consumer demand, present challenges in maintaining consistent freight volumes and network utilisation. Specific industries such as FMCG, pharmaceuticals, and automotive-core segments for logistics service providers-are increasingly sensitive to cost fluctuations and delays. Geopolitical instability and escalating conflicts also pose systemic risks, leading to potential rerouting of goods, volatility in commodity and fuel prices, and increased transit times, which may impact service reliability and margins.

The Indian logistics landscape remains highly fragmented and competitive, characterised by low barriers to entry and the presence of numerous unorganised players. This commoditised nature of the sector exerts downward pressure on pricing, especially in contract logistics and last-mile delivery, thereby impacting profitability. In this context, differentiation through technology-led solutions, operational efficiency, and service quality is critical to sustain and grow market share.

Furthermore, heightened regulatory scrutiny, including increased audits and compliance under the National Logistics Policy (NLP), PM Gati Shakti, and ESG-driven mandates, necessitates strict adherence to evolving statutory requirements. As an asset-light organization that engages independent contractors for critical logistics operations, Snowman must maintain robust regulatory frameworks and ensure contractor compliance to avoid operational disruptions and potential penalties.

Finally, Snowmans dependence on third-party partners for transportation fleets and warehousing assets necessitates strong relationship management and effective commercial models. Any breakdown in these partnerships or supply constraints can disrupt service continuity. Mitigating these risks requires continuous engagement with partners, performance monitoring, and contractual safeguards to ensure business resilience and service quality.

V) Internal Control Systems and adequacy

The management of Snowman Logistics Limited remains firmly committed to maintaining a robust internal control framework that is commensurate with the scale, complexity, and evolving nature of its operations. The Company has instituted well-defined policies, procedures, and control mechanisms to ensure regulatory compliance, safeguard assets, support accurate financial reporting, and enhance overall operational integrity. These controls are routinely reviewed and updated in light of business growth, sectoral changes, and regulatory developments.

Internal and statutory auditors conduct regular assessments of critical processes and control systems. Their findings and recommendations are diligently reviewed by the management and communicated to the Audit Committee and other relevant stakeholders to ensure timely implementation and continuous improvement. This process-centric approach ensures that controls remain effective, agile, and aligned with the Companys risk management strategy.

In recognition of the growing importance of technology and automation, Snowman continues to invest in digital solutions to enhance its internal control environment. Automation of key operational processes reduces the likelihood of manual errors, strengthens data accuracy, and improves response times. The Audit Committee plays an active oversight role in evaluating the adequacy and effectiveness of the internal controls and ensuring that audit recommendations are fully integrated into governance practices. This integrated and proactive approach reinforces our commitment to transparency, accountability, and sustained stakeholder trust.

VI) Discussion on financial performance with respect to operational performance.

The financial statements of the company were prepared in compliance with the requirements of the Companies Act, 2013 and we adopted the Indian Accounting Standards (IND AS). The following table illustrates the key points of financial performance with respect to the operational performance.

(Rs. In lakhs)

VM)Material Developments in Human Resources and Industrial Relations Front

The Company recognizes the role its personnel play in achieving organizational goals and has enhanced HR operations over the past year. This has involved automating and streamlining HR processes to improve efficiency and reporting. Efforts have been concentrated on reinforcing discipline and ensuring that employees are well- informed about and comply with company rules and policies. Despite facing various challenges, the Company successfully executed promotions and salary increments within the planned timelines. Additionally, various welfare and incentive programs were introduced to attract and retain talent. These initiatives align with the Companys objective of optimizing human resources in an effective and efficient manner.

The Total number of permanent employees on roll as on March 31,2025 was 542.

Key Financial ratios

CAUTIONARY STATEMENT

Statements made in this report, particularly those which relate to Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual results might vary materially from those either expressed or implied.