Zeal Global Services Ltd Management Discussions

GLOBAL INDUSTRY OVERVIEW

According to the International Monetary Fund (IMF), global economic growth is projected to slow from 3.3% in 2024 to 2.8% in 2025, before recovering modestly to 3.0% in 2026. This moderation reflects rising trade tensions-such as newly imposed U.S. tariffs-elevated policy uncertainty, and tighter financial conditions. Key economies including the United States, China, Canada, and Mexico are expected to witness slower activity during this period. A gradual recovery in the latter half of 2025 and into 2026 is anticipated, driven by easing trade frictions and more accommodative monetary policies.

The global aviation and air cargo industry is undergoing a resilient recovery, underpinned by stable macroeconomic conditions and growing demand for passenger and cargo movement. According to IATA, global passenger traffic measured in Revenue Passenger Kilometers (RPK) is projected to grow by 5.8% in 2025. Asia-Pacific markets are expected to lead this growth, registering over 9% expansion due to rising income levels, increased tourism, and recovery in business travel. On the cargo front, global air freight demand-measured in Cargo Tonne Kilometers (CTK)-rose by 5.8% YoY as of April 2025. Full-year growth is expected in the range of 4% to 6%. Despite this momentum, the sector faces several headwinds, including: Ongoing trade uncertainties and geopolitical risks, Elevated freight rates on major trade routes (e.g., China-US), Aircraft delivery delays stemming from global supply chain constraints. Reflecting these challenges, IATA has revised its 2025 air cargo revenue forecast downward to USD 142 billion, a 4.7% reduction from earlier projections. Nevertheless, the long-term cargo outlook remains constructive. Sustained e-commerce demand, increasing preference for fast delivery, and digitization trends are prompting greater investment in automation, fleet modernization, and smart logistics infrastructure. Strategic agility and regional diversification are increasingly becoming critical success factors for global aviation and logistics players.

INDIAN INDUSTRY OVERVIEW

India continues to lead global growth, with the IMF projecting it to remain the fastest-growing major economy over the next two years. As per the April 2025 edition of the IMFs World Economic Outlook, Indias GDP is forecast to expand by 6.2% in 2025 and 6.3% in 2026, significantly outpacing the global average. This sustained economic performance reflects Indias structural strengths-robust domestic consumption, accelerating digital transformation, infrastructure expansion, and continued policy reforms. In contrast with global growth expectations of 2.8% in 2025 and 3.0% in 2026, Indias resilience underscores its rising prominence in the international economic landscape. The outlook supports a positive investment climate, improved fiscal fundamentals, and continued opportunities across key sectors of the economy.

Indias aviation and air cargo industry continues to expand steadily, supported by strong macroeconomic fundamentals and targeted policy initiatives. The sector has significantly benefitted from increased air travel demand, infrastructure upgrades, and e-commerce-led logistics growth. As per data from the Ministry of Civil Aviation, total passenger traffic in FY24 reached 37.6 crore, reflecting a 15% year-on-year (YoY) growth. This includes 30.6 crore domestic passengers (up 13%) and 7 crore international passengers (up 22%). India now ranks as the third-largest domestic aviation market globally. Air cargo throughput also grew to 33.7 lakh tonnes in FY24, representing a 7% YoY increase. This growth has been driven by rising e-commerce activity, improved logistics networks, and continued execution of the National Logistics Policy and the PM Gati Shakti initiative. Government efforts to expand capacity and connectivity have yielded tangible results 21 greenfield airports have been approved, with several new terminals commissioned. The UDAN scheme has enabled affordable air travel for over 141 lakh passengers across 579 routes, connecting 85 underserved airports since inception. Technological enhancements such as Digi Yatra are improving passenger experience through contactless biometric-based processing. India has also

emerged as a leader in gender diversity in aviation, with women comprising 15% of Indian pilots-nearly three times the global average. In 2023 alone, 1,622 commercial pilot licenses were issued, of which 18% were to women. Backed by strong GDP growth, strategic infrastructure investments, and digital advancements, Indias aviation and logistics sector is well-positioned for long-term, structural growth.

THREAT, RISK AND CONCERNS

While the aviation and logistics sectors demonstrate robust growth potential, several risks must be monitored, including:

• Volatility in fuel prices,

• Exchange rate fluctuations,

• Regulatory changes,

• Supply chain disruptions,

• Geopolitical developments.

The industrys ability to remain resilient and agile in addressing these uncertainties will be key to sustaining long-term value creation.

Ongoing Geopolitical events, trade policy shifts and potential labour strikes create volatility and uncertainty in global trade flows. Increasing focus on sustainability and stricter environmental regulations, including fuel costs and the need for greener logistics, pose challenges for the industry.

Cybercrime remains a clear and present danger to the aviation sector which cannot be ignored. The sector is witnessing a rising tide of cyber-attacks and a surge in the levels of risk, as criminals, hackers, and cyber-attackers look to use vulnerabilities, cause chaos, and steal capital at the expense of passengers and the aviation sector.

Climate change and environmental issues certainly remain among the key challenges faced by the airline industry. Since commercial aviation is responsible for a significant percentage of carbon emissions, the industry is under significant pressure to take measures to reduce the environmental impact of air travel.

OPPORTUNITIES

The continued growth of e-commerce and the pharmaceutical sector, both requiring rapid and reliable transportation, are major drivers of air freight demand. Expansion of services through strategic partnerships and improvements to infrastructure will create new avenues for growth.

SEGMENT-WISE PERFORMANCE

The Company has been performing well in terms of its market Presence and share. Our main focused in rendered the services to our customers along with to maintain our core values and Business principles. Recently company has introduced South African Airways Cargo in Logistic Sector Air Cargo Market is expanding in terms of Tonne and some new airlines is added like cathey pacific which will be expected to give boost to revenue as well as profit of the company.

We have two business verticals: -

Cargo Carrier Service: We are representing various airlines across the globe for Transfer and shipment of goods by arrangement with the represented / contracted airlines for the transportation of cargo through air.

Passenger Carrier Service: We work with Airlines and provide them with the support for the transportation of passengers through Airways from one country to another. We create a smooth cross-cultural experience for passengers as well as airlines. As a pilot project we have started working with different Airlines.

Further we have two modes of distribution:

1. Offline Distribution

Airlines which are not bringing their own Aircrafts to India and connect through some other airlines out of India falls under offline distribution.

2. Online Distribution

Airlines which are operating directly from India falls under online distribution.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has placed system of Internal Control Systems and checks which are considered adequate and commensurate with the size and nature of operations providing sufficient assurance about safe guarding of all assets, authorizing transactions, recording and timely reporting.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Company has earned INR 36781 Lacs in comparison to 19308.76 Lacs of the previous year which is witnessing a growth of approx. 90.49% on Y-o-Y basis. In FY 25 EBIDTA stand at INR 2571.89 Lacs in comparison to INR 2076.58 Lacs of the previous year which is up by 23.85% on Y-o-Y basis whereas PBT witnesses growth of 23.53% on Y-o-Y basis as its Stand at INR 1948.37 Lacs in comparison to INR 1577.26 Lacs. After making a provision of taxes including deferred tax and tax adjustment of earlier years profit after tax stand at INR 1436.31 Lacs against INR 1166.91 Lacs in previous year which is up by 23.09%. Company has witnessed a growth of 3.9% in its Cargo business in terms of volume as its handled 3859 Tons of Cargo Shipment in Comparison of 3714 Tons in previous year.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

Human Resources are very important for every organization. The Company maintains healthy and harmonious Industrial relationship with its employees, customers and suppliers. The Company witnesses the importance and contribution of human resources for its continued Growth and Development. As on 31st March 2025 Company has a total strength of 75 employees.

DISCLOSURE OF ACCOUNTING TREATMENT

The Company has followed prescribed Accounting Standard in preparation of its financial statements in order to give true and fair view of the underlying business transaction.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS AND IN RETURN ON NET-WORTH ALONG WITH DETAILED EXPLANATIONS THEREFORE

		As at
Particulars		March 31, 2024	Change	Reason for more than 25% change
Current Ratio	0.82	0.85	-3.30%	N.A.
Debt-Equity Ratio	0.18	0.15	18.32%	N.A.
Debt Service Coverage Ratio	38.22	8.51	348.82%	The movement in current year is on account of decrease in Borrowings
Return on Equity	10.79	8.77	23.09%	N.A.
Trade Receivables Turnover Ratio	17.65	11.99	47.22%	The movement in current year is on account of increase in Sales and average trade receivables
Trade Payables Turnover Ratio	12.61	7.79	61.84%	The movement in current year is on account of increase in Purchases and average trade Payables
Net Capital Turnover Ratio	(73.98)	(55.62)	32.99%	The movement in current year is on account of increase in Sales and average working capital.
Net Profit Ratio	0.04	0.06	-35.38%	The movement in current year is on account of increase in both net profit and Sales
Interest Coverage Ratio	25.77	11.12	131.79%	Due to decrease in interest cost
Operating Profit Margin Ratio	10.00	14.62	-31.59%	Due to increase in operating cost
Return on Networth	18.32	18.22	0.54%	N.A.