Tejas Cargo India Ltd Management Discussions

1. Economic Overview

India continued to demonstrate resilience and sustained economic momentum during FY 25-26, supported by domestic consumption, manufacturing activity, infrastructure development, digitalisation and continued policy focus on strengthening Indias economic and industrial capabilities. The Governments continued emphasis on infrastructure development, logistics efficiency, manufacturing, formalisation of supply chains and initiatives under "Make in India” and "Atmanirbhar Bharat” provided a supportive environment for businesses across sectors.

The logistics industry, being closely linked with overall economic activity, continued to play an important role in facilitating the movement of goods and supporting the growth of manufacturing, infrastructure, retail, e-commerce and other industries. Increasing formalisation of supply chains, technology adoption and demand for reliable and efficient transportation services continued to create opportunities for organised logistics service providers.

2. Industry Overview

Industry Growth and Transformation

The Indian logistics industry continued to undergo significant transformation during FY 25-26, evolving from traditional transportation services towards integrated, technology-enabled and efficient supply- chain management solutions. The sector continued to benefit from:

- Expanding Market Size & Demand

The logistics sector continued to benefit from growth in manufacturing, infrastructure, organised retail, e-commerce, domestic consumption and increasing formalisation of supply chains. The growing requirement for efficient transportation solutions and the increasing preference for organised logistics service providers continued to support demand for full-truckload and technology- enabled logistics services.

The multi-modal logistics approach has gained increasing importance as businesses seek to optimize logistics costs, improve delivery timelines and enhance supply-chain efficiency.

- Technological Advances:

Industry-wide adoption of IoT for real-time tracking, AI-based route optimization, GPS-enabled asset monitoring, telematics and digital systems continued to drive efficiency, transparency and security. Digitization has reduced manual processes, improved coordination among stakeholders and enabled logistics companies to provide enhanced visibility to customers.

- Customer Expectations

Market demand continued to shift towards integrated, transparent and end-to-end logistics solutions offering speed, flexibility, reliability and customized services. Customers increasingly expect real-time visibility, timely deliveries, improved security and technology-enabled transportation solutions.

- Sustainability Trends

A growing emphasis on sustainable logistics continued to focus attention on reduction of carbon emissions, fuel efficiency, cleaner transportation technologies, green warehousing and deployment of electric and other comparatively cleaner vehicles.

- Talent and Skill Development

The industry continues to face challenges relating to availability of skilled drivers and trained logistics personnel. These challenges are being addressed through government-supported skilling initiatives, private-sector training programmes, employee development and technology-enabled operational processes.

Tejas Cargos Differentiation

In this competitive and evolving environment, Tejas Cargo distinguishes itself through its technology- first, asset-intensive approach combined with a pan- India operational footprint. The Company operates an IoT-enabled fleet supported by GPS, telematics and technology-driven monitoring systems, providing customers with enhanced visibility, operational control and security.

The Company continues to invest in fleet modernization through addition of new vehicles and replacement of ageing vehicles, with the objective of improving fleet efficiency, operational reliability and compliance with evolving environmental and safety standards.

The Company follows a hybrid asset approach, combining its owned fleet with market-hired fleet capacity. The owned fleet provides greater control over service quality, fleet availability, operational reliability and customer experience, while the market-hired fleet provides flexibility to respond to fluctuations in demand and enables the Company to scale its operations without proportionately increasing its fixed asset base.

This combination of asset ownership, technology- enabled fleet management and flexible fleet deployment enables Tejas Cargo to balance operational control with scalability and capital efficiency. The Companys focus on reliability, transparency, technology and customer service provides a strong foundation for its continued growth in the organised full-truckload logistics segment.

3. Government Policy and Industry Initiatives

The logistics industry during FY 25-26 continued to be influenced by government policies and initiatives aimed at improving infrastructure, connectivity, digitalisation and supply-chain efficiency:

- National Logistics Policy (NLP)

The National Logistics Policy continues to focus on improving logistics efficiency, promoting multimodal transportation, strengthening digital platforms such as the Unified Logistics Interface Platform (U LI P), facilitating regulatory coordination, promoting skill development and supporting green logistics.

- PM Gati Shakti Programme

The PM Gati Shakti National Master Plan continues to facilitate integrated infrastructure planning and improved connectivity across roads, railways, ports, airports, waterways and other logistics infrastructure, with the objective of improving multimodal connectivity and logistics efficiency.

- Budgetary Measures

The Union Budget FY 25-26 continued to focus on infrastructure development, connectivity, trade facilitation and strengthening the broader economic ecosystem. The Governments continued investments in infrastructure and initiatives relating to transportation, warehousing and trade facilitation are expected to support the long-term growth of the logistics sector. The official Union Budget FY 25-26 documents provide the relevant budgetary framework and measures

- Skill Development

The Governments continued emphasis on development of a skilled workforce through training institutions, ITIs and skill-development initiatives is expected to support the manpower requirements of the logistics sector.

Tejas Cargo actively aligns with these broader industry developments by investing in technology- enabled fleet management, upgrading its fleet, strengthening operational capabilities and investing in workforce training. These initiatives enable the Company to improve operational efficiency, enhance customer service and expand its service capabilities in a compliant and sustainable manner.

4. Business Performance, Strategy, and Future Outlook

Business Performance

FY 25-26 marked another year of continued operational development for Tejas Cargo, with the Company focusing on strengthening its fleet capabilities, expanding its customer base, improving asset utilization, enhancing technology infrastructure and diversifying its presence across sectors and geographies.

The Companys revenue from operations increased to INR 628.33 Crore in FY 25-26 from INR 501.15 Crore in FY 24-25, registering a growth of approximately 25.38%. Total income stood at INR 636.11 Crore, compared with INR 508.10 Crore in the previous year, reflecting growth in business volumes, fleet utilization, customer additions and expansion across key logistics corridors.

Profit before tax increased to INR 28.13 Crore in FY 25-26 from INR 25.72 Crore in FY 24-25, representing a growth of approximately 9.37%. The Companys profitability during the year was supported by increased business volumes, fleet utilization, contribution from owned and hired fleets, operating efficiencies, technology-led cost optimization and disciplined cost management.

Profit after tax stood at INR 20.88 Crore in FY 25-26, compared with INR 19.12 Crore in FY 24-25, registering a growth of approximately 9.18%.

The Companys asset base increased significantly during FY 25-26. Total assets stood at INR 447.33 Crore as at March 31, 2026, compared with INR 360.01 Crore as at March 31, 2025, representing an increase of approximately 24.25%. Property, Plant and Equipment increased to INR 190.23 Crore from INR 153.01 Crore, reflecting continued investment in the Companys operating assets and fleet capabilities.

The Company continued to invest in fleet expansion, technology infrastructure and human capital development. The asset-intensive operating model provides greater control over fleet availability, service quality and operational reliability, particularly in the long-haul transportation segment. During the year, the Company incurred substantial capital expenditure towards motor vehicles, with investments also being made in technology and other operating infrastructure.

At the same time, the Companys hybrid asset model enables it to supplement its owned fleet with market- hired vehicles based on customer requirements, freight volumes and route economics. This approach provides

operational flexibility and enables the Company to respond efficiently to changes in customer demand and route requirements, while balancing growth objectives with prudent capital deployment.

The Companys working capital requirements also increased during the year, primarily in line with the growth in business operations. Trade receivables increased to INR 118.50 Crore as at March 31, 2026 from INR 77.99 Crore in the previous year, while inventories increased to INR 9.14 Crore from INR 2.46 Crore. The Company continued to focus on efficient working capital management and cash flow discipline.

Cash generated from operating activities remained positive at approximately INR 59.03 Crore during FY 25-26. The Company deployed significant funds towards fleet expansion and other capital expenditure, resulting in net cash outflow from investing activities of approximately INR 126.03 Crore. These investments were partly funded through operating cash flows and borrowings, supporting the Companys continued expansion of its operating asset base.

Overall, FY 25-26 was characterized by continued growth in operating revenues, expansion of the asset base and fleet capabilities, and sustained investment in infrastructure and operational capacity. The Company remains focused on improving asset utilization, enhancing operational efficiencies, strengthening customer relationships and maintaining disciplined financial and capital management to support sustainable long-term growth.

Financial Position and Cash Flow

The Companys total assets increased to INR 447.33 Crore as at March 31,2026 from INR 360.01 Crore in the previous year, reflecting continued investment in fleet and operating infrastructure. Property, Plant and Equipment increased to INR 190.23 Crore from INR 153.01 Crore, supporting the Companys capacity for future growth. Net worth increased to INR 193.19 Crore, primarily due to profit retention, while borrowings stood at INR 220.22 Crore as at March 31, 2026.

The Company made significant investments in fleet expansion, including INR 111.92 Crore towards purchase of motor vehicles. These investments were supported through operating cash flows and financing arrangements, enabling the Company to strengthen its operating capacity while maintaining prudent financial management.

Strategic Initiatives

The Companys strategic focus for FY 25-26 centered on technology-led operational excellence, geographic growth, diversification, hybrid fleet deployment and sustainability.

- Technology

Ever-increasing investments in IoT, GPS tracking, AI-based route optimization, centralized fleet control rooms, telematics and digital security systems continue to enhance security, operational visibil-ity, fleet utilization and customer trust.

- Geographic Expansion

Operational footprints continued to deepen across key industrial and logistics corridors, with the Company focusing on regions and sectors offering attractive growth opportunities. The Company continued to strengthen its presence across North, West and East India, particularly for catering to the Steel, Mining and Mineral industries.

- Diversification

The Company continued to expand its presence across sectors such as Cement, Steel, Mining, Miner-als, Pharmaceuticals, FMCG, manufacturing and e-commerce. Such diversification is intended to broaden the revenue base, reduce sectoral concentration and improve volume resilience.

- Hybrid Asset Strategy

The Companys hybrid fleet strategy remains an important element of its business model. The combination of owned and market-hired vehicles enables the Company to maintain operational control while providing flexibility to meet additional customer requirements and fluctuations in demand.

The Company intends to optimize the mix between owned and hired fleet based on customer requirements, route economics, fleet utilization, operational requirements and capital allocation considerations.

- Sustainability

Green fleet initiatives and regulatory alignment demonstrate Tejas Cargos commitment to environmental responsibility and future-proofing its operational capabilities. The Company continues to engage with customers focusing on reduction of Scope 3 emissions and is evaluating requirements for deployment of comparatively greener and more environmentally friendly vehicles.

The Company has also entered into an agreement for deployment of Electric Vehicles for Amazon for a period of five years, supporting the Companys sustainability objectives and its focus on cleaner transportation solutions.

Future Outlook

Looking ahead to FY 26-27 and beyond, the Company remains optimistic about the growth prospects of the logistics sector, supported by rising manufacturing activity, infrastructure investments, e-commerce expansion, formalisation of supply chains, technology adoption and increasing demand for efficient transportation services.

Tejas Cargo aims to deepen its trailer fleet, strengthen its presence in Minerals Transportation and evaluate opportunities to enter the mining industry through strategic partnerships and joint ven-tures.

Risk management and financial discipline will remain central to execution as the Company navigates fuel price volatility, regulatory developments, competitive pricing pressures and changing customer requirements. Strategic investments in talent development, ESG initiatives, technology and fleet ca-pabilities will continue to support the Companys objective of building a resilient, scalable and sus-tainable logistics business.

The outlook for FY 26-27 remains positive, with the Company focused on building upon its FY 25-26 operational foundation, strengthening its market position and creating enhanced value for its stakeholders.

5. Financial Performance

FY 25-26 delivered steady financial performance, supported by growth in business volumes, fleet capacity, customer additions and operational efficiencies.

? Revenue from operations increased by approximately 25.38% YoY to INR 628.33 Crore from INR 501.15 Crore in FY 24-25, driven by higher business volumes, increased fleet capacity, customer additions and expansion across key logistics corridors.

? Profit before tax stood at INR 28.13 Crore compared with INR 25.72 Crore in FY 24-25, reflecting continued growth in operations and operating efficiencies.

? Net profit stood at INR 20.88 Crore compared with INR 19.12 Crore in FY 24-25, with net profit margin at approximately 3.28%.

The asset base expanded during FY 25-26, with total assets increasing to INR 447.33 Crore from INR 360.01 Crore. Property, Plant and Equipment increased to INR 190.23 Crore from INR 153.01 Crore, reflecting continued investments in fleet and other operating assets.

Shareholders funds increased to INR 193.19 Crore as at March 31, 2026 from INR 173.22 Crore as at March 31, 2025. The Company continued to maintain a balanced approach towards capital deploy-ment, with investments in fleet, technology and operational infrastructure supported by internal ac-cruals and appropriate financing arrangements.

Prudent management of receivables and payables remains an important area of focus for the Compa-ny. Trade receivables stood at INR 118.50 Crore as at March 31, 2026, compared with INR 77.99 Crore in the previous year, while trade payables other than dues to micro and small enterprises stood at INR 10.32 Crore compared with INR 7.29 Crore.

Operating cash flow during FY 25-26 stood at INR 59.03 Crore, reflecting continued cash generation from operations despite increased working capital requirements. Investments in capital expenditure, particularly fleet expansion and operating infrastructure, were financed through a combination of internal accruals and appropriate financing arrangements.

6. Human Resources

The Company continues to build a skilled and motivated workforce through training programmes focused on driver safety, operational compliance, technology adoption and customer service excellence. Employee development and ongoing upskilling initiatives continue to support the Companys operational requirements and address the evolving skill requirements of the logistics sector.

The Company remains focused on employee welfare, workplace safety and development of a performance- oriented organizational culture. Sustainability awareness and adoption of technology-enabled processes also form an important part of the Companys employee development initiatives.

7. SWOT Analysis

Tejas Cargos strengths lie in its highly digitized, asset-intensive business model combined with pan- India operational reach and presence across crucial sectors such as FMCG, manufacturing, steel, ce-ment, mining, minerals, pharmaceuticals and e-commerce. Its technology integration for fleet man-agement, tracking and security provides a significant competitive advantage and supports operation-al efficiency and customer satisfaction.

However, the Company does face significant capital expenditure requirements associated with its asset- heavy business model, which can impact free cash flows. The Companys working capital re-quirements may also increase with business growth and expansion in customer relationships. The Company also operates in a competitive industry where pricing pressure and customer concentra-tion may affect revenues and profitability.

The logistics sectors evolving landscape presents numerous opportunities for Tejas Cargo, including government-backed initiatives for multimodal logistics expansion, increasing demand for technolo-gy-enabled transportation, growing demand for eco-friendly logistics services, and potential geo-graphic and sectoral expansion into underpenetrated markets.

Nevertheless, threats such as fuel price volatility, pricing pressure from unorganized and fragmented players, driver shortages, increasing regulatory compliance requirements, cybersecurity risks aris-ing from greater IT integration and intensifying competition challenge the Companys growth trajec-tory. Effective execution of risk mitigation strategies remains vital to navigating this complex envi-ronment.

8. Internal Control System

Tejas Cargo operates a comprehensive, multi-layered internal control system designed to safeguard assets, enhance operational efficiency and ensure compliance with statutory and regulatory re-quirements. This system includes:

? Automated financial controls adhering to applicable accounting standards with periodic monitoring and exception reporting.

? Cybersecurity frameworks encompassing appropriate access controls, authentication mechanisms, data protection measures and periodic assessments to protect data integrity and operational continuity.

? Vigilant fleet management controls utilizing IoT, GPS and telematics to monitor vehicle movements, reduce operational and security risks and optimize asset deployment.

? I nternal audit and review mechanisms supporting transparency, compliance and identification of operational and financial risks.

? Mandatory staff training on compliance, ethics, safety and operational protocols to reinforce accountability and awareness across all levels.

The Company continues to periodically review and strengthen its internal control framework commensurate with the size, scale and complexity of its operations.

9. Risks and Concerns

The Company continually addresses a wide spectrum of risks to protect stakeholder interests and ensure sustainable growth:

- Legal and Regulatory Risks:

Changes in regulations relating to emissions, labour, taxation, transportation, safety and other

operational requirements may increase compliance costs or require additional investments.

- Operational Risks:

Dependence on availability of drivers and transportation infrastructure, vehicle downtime, adverse weather conditions and other operational disruptions may affect delivery reliability and operating efficiency. Dependence on certain large customers may also result in business concentration risk.

- Technology Risks:

The growing reliance on IT systems, IoT, telematics and digital platforms expose the Company to cyber threats, system downtime, data security risks and potential disruption of operations.

- Market Risks:

Volatility in fuel prices, changing freight demand, competitive pricing pressure and macroeconomic developments can affect costs and profitability. Increased competition from organised as well as unorganized logistics players may further pressurize pricing and margins.

Mitigation strategies include diversification of the customer base, appropriate insurance coverage, employee retention and upskilling programmes, regular compliance reviews, technology and cybersecurity controls, fleet monitoring and business continuity planning.

10. Future Outlook

Looking ahead, the logistics sector in India is expected to continue growing, driven by infrastructure development, manufacturing growth, rising e-commerce penetration, formalisation of supply chains, technology adoption and increasing focus on sustainability.

Tejas Cargo is positioned to capitalize on these opportunities through strategic investments in fleet expansion, technology upgrades, operational capabilities and customer diversification. The Company plans to deepen its presence in sectors such as pharmaceuticals, steel, cement, minerals and mining while expanding its geographic reach across under-served and strategically important logistics cor-ridors.

The Company will continue to evaluate opportunities for strategic partnerships and joint ventures, particularly for entering new sectors and expanding its capabilities in minerals and mining transpor-tation.

Continued alignment with government initiatives, including digitization, multimodal logistics, green

transportation and talent development, is expected to enhance operational efficiency and customer service.

Tejas Cargo remains committed to building a resilient, scalable and sustainable business focused on creating long-term value for its clients, investors, employees and other stakeholders.

11. Cautionary Statement

This MD&A contains forward-looking statements that are subject to risks and uncertainties which could cause actual performance to differ materially from the expectations expressed or implied here-in. These statements are based on the Companys current expectations, assumptions and estimates and are subject to various business, economic, regulatory, market and other risks.

The Company undertakes no obligation to update or revise any forward-looking statements except as may be required under applicable law or regulatory requirements.

Tejas Cargo India Limited continues to strengthen its position through a differentiated combination of technology, asset ownership, hybrid fleet deployment and strategic alignment with evolving indus-try and policy trends, providing a strong foundation for sustainable growth and enhanced stakehold-er value in FY 26-27 and beyond.