Snowman Logistics Ltd Management Discussions

Industry Structure and developments

Indias cold chain logistics industry continues to play a pivotal role in strengthening the countrys supply chain infrastructure by supporting the efficient storage and distribution of temperature-sensitive products across sectors such as food and beverages, dairy, quick service restaurants (QSRs), pharmaceuticals, healthcare, retail, and FMCG. The industry is being driven by changing consumer preferences, increasing demand for processed and frozen foods, expansion of organised retail, rapid growth in e-commerce and quick commerce, and the rising need for high- quality pharmaceutical logistics. Simultaneously, government initiatives aimed at enhancing logistics infrastructure, improving multimodal connectivity, promoting food processing, and reducing logistics costs are creating a favourable environment for the organised cold chain sector. Increasing focus on food safety, regulatory compliance, product traceability, and quality assurance is further accelerating the adoption of integrated cold chain solutions across industries.

Overview of the Global economy

The global economy demonstrated resilience during FY 2025-26 despite continued geopolitical uncertainties, evolving trade dynamics and volatile commodity markets. Economic activity remained supported by moderating inflation, gradual easing of monetary policies across several major economies and continued recovery in global services and manufacturing sectors. Nevertheless, geopolitical conflicts, supply chain realignments, trade policy uncertainties and financial market volatility continued to pose risks to global growth.

Inflationary pressures moderated across many advanced economies as Central Banks monetary tightening measures yielded positive outcomes. Several countries initiated calibrated reductions in policy interest rates to support investment and domestic demand while maintaining price stability. Although inflation has softened from the elevated levels experienced over the past few years, it continues to remain above long-term targets in several economies, requiring policymakers to adopt a cautious and data-driven approach.

Sustainability remained a strategic priority worldwide. Governments and corporations accelerated investments in renewable energy, green infrastructure, carbon reduction initiatives and environmentally sustainable logistics solutions. Environmental, Social and Governance (ESG) considerations have become increasingly integrated into business strategy, influencing investment decisions, procurement practices and supply chain design across global industries.

Overview of the Indian economy

India continued to be among the fastest-growing major economies during FY 2025-26, supported by strong domestic consumption, sustained public capital expenditure, improving manufacturing activity, expanding services sector and resilient macroeconomic fundamentals. Continued emphasis on infrastructure development, digital transformation, formalisation of the economy and ease of doing business has strengthened Indias attractiveness as a global investment destination.

Government initiatives aimed at improving logistics efficiency, manufacturing competitiveness and industrial development continued to provide momentum to economic growth. Programmes such as PM Gati Shakti, the National Logistics Policy, Make in India, Production Linked Incentive (PLI) schemes, Digital India and continued infrastructure investments have strengthened Indias supply chain ecosystem while improving connectivity across road, rail, ports, airports and multimodal logistics infrastructure.

The rapid expansion of e-commerce, quick commerce and omnichannel retail continued to reshape logistics requirements across industries. Businesses increasingly require technology-enabled and scalable logistics solutions capable of supporting faster deliveries, inventory visibility and nationwide distribution networks. This evolving business environment provides significant opportunities for organised third-party logistics providers with integrated warehousing and transportation capabilities.

Against this backdrop, Snowman Logistics Limited remains well positioned to capitalise on emerging opportunities through its extensive cold chain infrastructure, strong customer relationships, technology-driven operations and experienced management team. The Company continues to focus on expanding its service offerings, improving operational efficiencies and creating long-term value through sustainable growth and customer-centric solutions.

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.

The premium warehousing segment 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.

Opportunities and Threats

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 fastgrowing 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. 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.

2. Economic Slowdown Impacting Freight Demand

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.

3. 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.

4. Talent Shortage 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.

Company Overview

Incorporated in 1993, Snowman Logistics Limited is one of Indias leading integrated providers of temperature- controlled logistics and end-to-end cold-chain solutions, offering warehousing, transportation, trading and distribution, and value-added services across the cold chain, and is a subsidiary of Gateway Distriparks Limited. The Company operates a Pan India network of company-owned and build-to-suit (BTS) warehouses spread across 3 million + sq feet of land area - comprising 45 warehouses with a combined capacity of approximately 1,54,558 pallets across 21 cities, supported by a fleet of over 600 temperature-controlled vehicles. Snowman serves a diversified customer base across dairy, frozen foods, poultry, seafood, quick-service restaurants, pharmaceuticals and healthcare, and continues to be recognised as a market leader in Indias organised cold-chain industry. The Company reports its business under three reportable segments, namely Warehousing Services, Transportation Services, and Trading and Distribution.

During the Financial Year 2025-26 , the Company commissioned four new facilities - at Kolkata, Krishnapatnam, Kundli (NCR) and Jaipur - adding approximately 17,000 pallet positions, The Company continues to pursue an asset-light, build-to-suit (BTS) led expansion strategy, identifying strategic land parcels across key locations to strengthen its national footprint while preserving capital efficiency and operational flexibility, and this approach is expected to remain central to the Companys growth strategy going forward.

I) Segment-wise/ Product-wise performance

The Company mainly operates in the following segments:

(a) Warehousing services

(b) Transportation services

(c) Trading and distribution

The Warehousing Services segment, grew at 11.71 % year-on-year, aided by the commissioning of new facilities and steady utilisation across the network. The Trading and Distribution segment recorded strong growth of 22.5%, continuing its multi-year momentum. The details of the Segment-wise Performance of the Company is provided in the Notes to Financial Statements..

Business Outlook

Snowman Logistics is well positioned to benefit from the continuing formalisation and modernisation of Indias cold-chain logistics industry, supported by rising organised food retail, growth in frozen and ready-to-eat food consumption, expansion of pharmaceutical and healthcare distribution, and the scale-up of quick-commerce and online grocery. The Companys asset-light, build-to-suit expansion model, together with its ongoing transition of select transportation engagements to an integrated 5PL model, is expected to enable calibrated capacity addition in

line with committed demand while supporting margin improvement over time.

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.

Internal Control Systems and their 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.

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).

During the year under for review, the total revenue from operations and other income was Rs. 60438.11 Lakhs as against Rs. 55,253.45 Lakhs for previous year. Profit Before taxation was Rs. (256.05) Lakhs as against Rs. 599.47 Lakhs for previous year. Net Profit after taxes of the Company has decreased from Rs. 569.08 lakhs to Rs. 330.27 lakhs. The details of the Financial Performance of the Company is provided in the Notes to Financial Statements.

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 Company undertook a comprehensive review of its compensation structures, payroll systems, HR policies and employment documentation to align with the provisions of the Code on Wages, 2019 and the Rules framed thereunder. Necessary system and process enhancements were initiated to facilitate compliance upon the Code becoming applicable pursuant to notifications issued by the appropriate Government. The Company continues to closely monitor the evolving regulatory framework and remains committed to ensuring timely compliance while maintaining harmonious industrial relations and employee engagement.

The total number of permanent employees on roll as on March 31,2026 was 532.

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.