Velox Shipping and Logistics Ltd Management Discussions

1. Macro-Economic Environment:

The global economic environment during FY 2025-26 remained influenced by geopolitical tensions, changes in trade policies, financial-market volatility and disruptions affecting energy and supply chains. While global economic activity demonstrated resilience, the outlook continued to be shaped by divergent growth trends across economies, elevated public debt and uncertainty surrounding international trade and investment flows.

According to the International Monetary Funds July 2026 World Economic Outlook Update, global growth is projected at 3.0% in 2026 and 3.4% in 2027. The IMF has also highlighted that global disinflation has faced renewed challenges, with geopolitical developments and energy-related pressures influencing the inflation outlook.

For the logistics industry, these developments have a direct bearing on freight volumes, fuel and transportation costs, shipping routes, inventory decisions and customer supply-chain strategies. Businesses are increasingly seeking diversified sourcing arrangements, greater supply-chain visibility and flexible logistics networks to manage disruptions and improve resilience.

At the same time, technology continues to reshape logistics operations. Digital platforms, data analytics, artificial intelligence, automation, real-time tracking and integrated transportation-management systems are increasingly being deployed to improve planning, asset utilisation, customer visibility and operating efficiency.

These structural developments are creating opportunities for logistics service providers that can combine physical execution capabilities with technology-enabled visibility and integrated supply-chain solutions.

2. Overview of the Indian Economy:

The Indian economy continued to demonstrate resilience during FY 2025-26 despite an uncertain global environment. The First Advance Estimates released in January 2026 placed Indias real GDP growth at 7.4% for FY 2025-26, supported by domestic consumption, investment and continued momentum in services. The Economic Survey 2025-26 projected real GDP growth of 6.8%-7.2% for FY 2026-27. Inflation also moderated during the year. The Economic Survey reported average retail inflation of approximately 1.7% during April-December 2025, supported substantially by moderation in food prices.

Public investment continued to support economic activity. The Union Budget for FY 2026-27 provides for capital expenditure of approximately Rs.12.22 lakh crore, reflecting the continued policy emphasis on infrastructure development and productive capacity creation.

Indias expanding manufacturing, consumption, infrastructure and services ecosystem is supporting increased demand for transportation, warehousing, freight forwarding, shipping and other logistics services. The Governments continued emphasis on multimodal connectivity and digitalisation is also contributing to the gradual formalisation and efficiency enhancement of the logistics sector.

For logistics companies, the combination of economic growth, infrastructure development, increasing trade activity and greater supply-chain formalisation provides a favourable medium- to long-term operating environment.

3. Industry Structure and Developments:

The Indian logistics industry is undergoing a structural transition from fragmented and predominantly asset- or activity-specific operations towards integrated, technology-enabled and multimodal supply-chain solutions. The sector encompasses road transportation, rail and coastal movement, shipping, air cargo, freight forwarding, warehousing, cargo consolidation, customs-related services and third-party logistics. Increasing customer expectations for visibility, reliability, speed and cost efficiency are encouraging logistics providers to offer broader and more integrated solutions.

Government initiatives including PM Gati Shakti, the National Logistics Policy, Dedicated Freight Corridors, Sagarmala and Multimodal Logistics Parks are intended to improve connectivity and facilitate more efficient movement of goods. Digital initiatives such as the Unified Logistics Interface Platform are also supporting information integration across the logistics ecosystem. The Department of Commerce has highlighted the role of these initiatives in improving coordination, connectivity and technology adoption across Indias logistics network.

A significant development in the sector is the increasing availability of data on logistics costs. A study prepared by NCAER for DPIIT estimated Indias logistics costs at approximately 7.97% of GDP for 2023-24. This estimate is based on a more comprehensive methodology than the older 13-14% figures that were widely cited in earlier years. Accordingly, the Company believes that logistics-cost comparisons should be interpreted with reference to the methodology and period used.

4. Company Overview:

Velox Shipping and Logistics Limited was originally incorporated as Nirbhoy Exports Limited on February 21, 1983 under the Companies Act, 1956, pursuant to a certificate of incorporation issued by the Registrar of Companies, Mumbai.

The name of the Company was subsequently changed to Khatau Exim Limited, pursuant to which a fresh certificate of incorporation was issued on January 23, 1985. Thereafter, pursuant to a shareholders resolution passed through Postal Ballot, the name of the Company was changed to Velox Industries Limited and a fresh certificate of incorporation was issued on May 15, 2012.

During the previous financial year, the Company changed its name from Velox Industries Limited to Velox Shipping and Logistics Limited, reflecting its strategic focus on logistics and related activities.

The Companys business activities include freight contracting, transportation, shipping agency services, freight forwarding, cargo consolidation and multimodal logistics services. The transition represents an important phase in the Companys business development and is intended to establish a platform for participation in Indias growing logistics and supply-chain ecosystem. The Company is also evaluating opportunities to strengthen its capabilities through strategic investments, business relationships and expansion into complementary logistics activities.

5. Outlook:

The medium- to long-term outlook for Indias logistics industry remains constructive. Continued economic expansion, manufacturing growth, infrastructure investment, increasing trade flows and the formalisation of supply chains are expected to support demand for organised logistics services. The development of multimodal infrastructure is expected to improve connectivity between manufacturing centers, consumption markets, ports and logistics hubs. Digital technologies are also expected to play an increasing role in route planning, shipment visibility, warehouse management, customer communication and operational control.

Demand for organised warehousing and third-party logistics is expected to benefit from the expansion of organised retail, e-commerce, manufacturing and distribution networks. At the same time, customers are increasingly seeking logistics partners capable of managing multiple stages of the supply chain through integrated service offerings. The Company intends to focus on developing its logistics capabilities in a measured manner, strengthening customer relationships, improving operating processes and identifying opportunities where its network and service capabilities can generate sustainable value.

The Company remains mindful that the logistics industry is sensitive to economic cycles, freight rates, fuel prices, geopolitical events, regulatory changes and competitive intensity. Accordingly, growth initiatives will be pursued with appropriate consideration of commercial returns and execution risks.

6. Key Government Initiatives

The policy environment remains supportive of logistics-sector development. Important initiatives include:

PM Gati Shakti:

PM Gati Shakti seeks to facilitate integrated planning and development of infrastructure across different modes of transportation. Improved coordination among infrastructure projects is expected to support more efficient movement of goods.

National Logistics Policy:

The National Logistics Policy provides a framework for improving logistics efficiency through process improvements, technology adoption, skills development and greater coordination among stakeholders.

Digital Logistics Platforms:

Digital initiatives, including the Unified Logistics Interface Platform and other technology-enabled systems, are intended to improve information sharing, tracking and coordination across the logistics ecosystem.

Dedicated Freight Corridors:

Dedicated Freight Corridors are intended to increase freight-carrying capacity and improve the efficiency and reliability of rail-based freight movement.

Sagarmala:

The Sagarmala programme focuses on port-led development, improved port connectivity and greater utilisation of Indias maritime infrastructure.

Multimodal Logistics Parks:

Multimodal Logistics Parks are designed to facilitate consolidation and distribution of freight by bringing together multiple transportation modes and logistics services.

Production Linked Incentive Schemes: The expansion of domestic manufacturing supported by PLI schemes has the potential to increase demand for transportation, warehousing, distribution and other supply-chain services.

Taken together, these initiatives are expected to support greater formalisation, multimodal integration and technology adoption within Indias logistics industry.

7. Opportunities and Challenges: Opportunities:

International and Cross-Border Logistics:

The Companys investment in International Logistics Associates LLC (ILA) provides an opportunity to strengthen its international logistics and freight-forwarding capabilities. Growth in cross-border trade, supply-chain diversification and international sourcing could support demand for integrated logistics solutions.

Domestic Maritime and Shipping Services:

The Companys investment in Anchorage Shipping provides a platform for participation in domestic maritime logistics. Increased interest in coastal movement and multimodal freight transportation may create opportunities for efficient maritime logistics solutions.

Air Cargo and Time-Sensitive Freight:

Demand for faster transportation is supported by sectors such as pharmaceuticals, electronics, perishables and e-commerce. The Company may explore opportunities in air cargo and related freight services where commercially viable.

Warehousing and Third-Party Logistics:

The increasing preference among businesses to outsource logistics functions creates opportunities for organised third-party logistics providers. The Company may evaluate opportunities in warehousing, distribution and value-added logistics services.

Infrastructure-Led Growth:

Investment in roads, railways, ports, freight corridors and logistics parks is expected to improve the operating environment for logistics companies and create opportunities for network expansion.

Challenges:

Geopolitical and Trade Risks:

Changes in international trade routes, tariffs, sanctions, geopolitical tensions and shipping conditions can affect freight flows, transit times and operating costs.

Fuel and Operating-Cost Volatility:

Fuel prices, labour costs, transportation expenses and other operating costs can influence margins. The Company will continue to monitor costs and evaluate pricing and operating measures to maintain commercial viability.

Competitive Intensity:

The industry includes established logistics companies, specialised service providers and technology-enabled entrants. Competition can place pressure on pricing, customer acquisition and margins.

Technology and Cybersecurity:

Increasing digitalisation creates opportunities for efficiency but also requires appropriate investment in technology, data protection, cybersecurity and system integration.

Regulatory Compliance:

Logistics operations are subject to transportation, customs, taxation, environmental, labour, maritime and other applicable regulations. Changes in regulatory requirements may increase compliance obligations or operating costs.

Execution and Scaling Risk:

As the Company expands its logistics operations, effective management of customers, vendors, working capital, service quality and human resources will be important to achieving sustainable growth.

8. Segment-Wise Performance:

The Company operates in a single reportable business segment, namely the logistics business. The Companys management reviews the business on an integrated basis and does not currently identify separate operating segments requiring separate segment reporting beyond the disclosures contained in the financial statements. The Companys assets and revenues are substantially associated with its Indian operations, subject to the applicable disclosures in the financial statements.

9. Financial performance and analysis:

The financial statements of the Company have been prepared in accordance with the applicable provisions of the Companies Act, 2013 and Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time, together with applicable regulatory requirements.

During FY 2025-26, the Company recorded revenue from operations of Rs. 210.33 lakh compared with nil revenue from operations in the previous year. The commencement of logistics-related operating activities during the year represents an important step in the Companys business transition.

Total income increased to Rs. 330.45 lakh in FY 2025-26 from Rs. 69.50 lakh in FY 2024-25. The increase primarily reflects the commencement of operating revenue together with other income.

Total expenses amounted to Rs. 284.16 lakh during FY 2025-26, compared with Rs. 14.34 lakh in the previous year. The increase principally reflects expenses associated with the Companys expanded operating activities, including cost of services of Rs. 209.21 lakh and employee benefit expenses of Rs. 6.00 lakh.

Profit before tax stood at Rs. 46.28 lakh during FY 2025-26 compared with Rs. 55.16 lakh in FY 2024-25. Profit after tax amounted to Rs. 34.25 lakh during FY 2025-26.

The Companys FY 2025-26 results should be viewed in the context of the transition from limited operating activity in the previous year to the commencement and scaling of logistics operations during the year. Consequently, year-on-year comparisons for certain operating metrics and financial ratios may not be directly comparable.

Key Financial Indicators:

Particulars	FY 2025-26	FY 2024-25	Change / Comment
	(Rs. In Lakh)	(Rs. In Lakh)
Revenue from Operations	210.33	-	Operations commenced/ scaled
Total Income	330.45	69.50	Significant increase
Total Expenses	284.16	14.34	Increase due to operating expansion
Profit Before Tax	46.28	55.16	Decline of approx. 16.1%
Profit After Tax	34.25	43.95*	Decline of approx. 22.1%*

*Subject to confirmation against the Companys audited financial statements.

Key Financial Ratios and Return on Net Worth

In accordance with the applicable provisions of the Companies Act, 2013, the key financial ratios of the Company for FY 2025-26, as compared with the immediately preceding financial year, are set out below. The ratios which have undergone a change of 25% or more during the year, wherever applicable, are required to be read in the context of the Companys transition from limited operating activity in the previous year to the commencement and scaling of its logistics operations during FY 2025-26.

(Rs. In Lakhs)

Particulars	FY 2025-26	FY 2024-25	Change (%)	Explanation for Significant Change
Debtors Turnover Ratio	1.36	-	100	There has been a 100% increase in revenue from operations (service revenue) during the current FY, as the Company did not generate any revenue from operations in the previous FY.
Inventory Turnover Ratio	-	-	-	NA
Interest Coverage Ratio	-	-	-	NA
Current Ratio	0.24	63.64	(99.62)	The decrease in the ratio is primarily attributable to an increase in current liabilities, mainly on account of Consideration payable relating to the cost of acquisition of International Logistics Associates LLC and Anchorage Shipping.
Debt-Equity Ratio	0.03	0.03	(4.12)	NA
Operating Profit Margin (%)	22.01	-	100	The Company did not generate any revenue from operations in the previous FY
Net Profit Margin (%)	0.16	-	100	There has been a 100% increase in revenue from operations (service revenue) during the current FY, as the Company did not generate any revenue from operations in the previous FY.
Return on Net Worth (%)	4.12	5.51	(23.78)	The decrease is primarily attributable to the lower profit after tax during FY 2025-26, while the net worth of the Company increased during the year. The movement in the ratio is also reflective of the Companys transition from limited operating activity in the previous year to the commencement and scaling of its logistics operations during the current financial year.

Wherever the previous years ratio is not meaningful or cannot be appropriately computed due to nil revenue, absence of relevant activity or the nature of the Companys operations, the ratio has been considered as Not Applicable / Not Meaningful, as appropriate. Accordingly, percentage change in such ratios has not been presented.

The significant changes in the applicable ratios, where the variation is 25% or more as compared with the immediately preceding financial year, are primarily attributable to the commencement and scaling of the Companys logistics operations during FY 2025-26, changes in the Companys operating and financial structure, and the relatively low or nil base of the preceding financial year. The ratios should therefore be considered in the context of the Companys ongoing business transition and may not be directly comparable with the corresponding ratios of the previous year.

The Company will focus on increasing operating revenue, improving utilisation of resources, strengthening customer relationships, managing operating costs and improving overall operational efficiency as the logistics business develops.

10. RISK MANAGEMENT

The Companys business is exposed to a range of operational, financial, market, regulatory and strategic risks. The Company seeks to identify material risks on an ongoing basis and take appropriate measures to limit their potential impact.

A. Cost and Margin Risk: Variations in fuel, transportation, manpower and other operating costs may affect margins.

Management response: The Company monitors operating costs, reviews commercial terms with customers and vendors and seeks to improve operational efficiency and resource utilisation.

B. Customer Concentration Risk: Dependence on a limited number of customers or industry sectors may increase the impact of changes in customer demand or business conditions.

Management response: The Company intends to broaden its customer base and develop a wider range of logistics services, thereby reducing dependence on individual customers or sectors.

C. Competition Risk: The logistics market includes large integrated players, specialised operators and technology-enabled service providers. Increased competition may affect pricing and margins.

Management response: The Company intends to compete through service reliability, customer responsiveness, integrated offerings and disciplined cost management.

D. Geopolitical and Supply-Chain Risk: International conflicts, trade restrictions, shipping-route disruptions and changes in global trade patterns may affect freight volumes and transit costs.

Management response: The Company monitors external developments and seeks to maintain flexibility in routing, service arrangements and customer solutions.

E. Regulatory and Compliance Risk: The Companys activities may be affected by changes in transportation, customs, taxation, maritime, environmental, labour and other applicable regulations.

Management response: Applicable regulatory requirements are monitored by the relevant functions and compliance processes are incorporated into business operations.

F. Technology and Cyber Risk: Dependence on digital systems increases exposure to system failures, cybersecurity incidents, data loss and technology obsolescence.

Management response: The Company will continue to strengthen access controls, system monitoring, data protection and technology processes commensurate with the scale of its operations.

G. Working Capital and Financial Risk: Logistics operations can require working capital to support receivables, vendor payments and service execution.

Management response: The Company monitors cash flows, receivables and payment obligations and seeks to maintain adequate liquidity to meet operational requirements.

H. Human Capital Risk: The successful execution of logistics operations depends on employees and service partners possessing appropriate operational and technical capabilities.

Management response: The Company encourages skill development and training and seeks to maintain appropriate operating procedures and accountability across functions.

I. Strategic and Execution Risk: The Companys transition into logistics requires successful execution of its business strategy, customer acquisition, network development and operational scaling.

Management response: Management reviews business performance and strategic priorities periodically and intends to expand operations in a measured manner based on market opportunities, resources and commercial viability.

11. Internal Control Systems and their Adequacy:

The Company maintains internal control processes appropriate to the nature and scale of its operations. These controls are intended to support orderly business operations, protection of assets, reliable financial reporting, compliance with applicable laws and effective monitoring of key business activities.

The Companys internal controls cover relevant financial and operational processes, including authorisation of transactions, accounting records, payments, receivables, expenditure and reporting.

Internal control processes are subject to review through the Companys internal audit and statutory audit mechanisms, as applicable. Observations arising from such reviews are considered by the appropriate management and governance forums and corrective measures are undertaken where required.

The Audit Committee oversees matters relating to internal controls, financial reporting and audit observations in accordance with its terms of reference and applicable regulatory requirements.

As the Companys logistics activities expand, the Company intends to progressively strengthen its systems, processes and technology infrastructure to ensure that the control environment remains appropriate to its evolving operations.

12. Human Resources:

Human resources remain an important component of the Companys transition and growth strategy. The Company seeks to develop employee capabilities through on-the-job learning, relevant training programmes and exposure to evolving operational and technology requirements.

As the logistics business expands, the Company will focus on developing appropriate skills in areas including customer servicing, logistics coordination, documentation, technology utilisation, compliance and operational management.

The Company recognises that employee engagement, capability development and a positive work environment are important to maintaining service quality and supporting sustainable business growth.

13. Cautionary Statement:

This Management Discussion and Analysis contain statements relating to the Companys future plans, expectations, objectives and business outlook. Such statements are based on managements current assessments and assumptions and are subject to various known and unknown risks, uncertainties and other factors.

Actual results may differ materially from those expressed or implied in such statements due to factors including changes in economic conditions, demand for logistics services, competition, freight and fuel costs, customer behaviour, regulatory developments, geopolitical events, technology-related risks, availability of resources and the Companys ability to execute its business plans.

The Company does not undertake any obligation to publicly update or revise forward-looking statements except where required under applicable laws and regulations.

Information relating to the economy, industry and external market conditions has been derived from sources considered reliable by the Company. However, the Company does not independently guarantee the accuracy or completeness of such external information.

Readers are advised to exercise appropriate caution and not to place undue reliance on forward-looking statements.