Jay Bee Laminations Ltd Management Discussions

Economic Outlook

The global economy entered FY 2025-26 amid an environment of elevated uncertainty, changing trade dynamics, geopolitical tensions and volatility in commodity and energy markets. While economic activity demonstrated resilience, the global outlook remained sensitive to developments in trade, energy prices, financial conditions and geopolitical stability.

According to the International Monetary Fund (IMF), World Economic Outlook, April 2026, global economic growth is projected at 3.1% in 2026 and 3.2% in 2027, assuming that the conflict in the Middle East remains limited in duration and scope. Global headline inflation is projected to rise modestly in 2026 before resuming its downward trajectory in 2027. The outlook continues to be subject to significant downside risks. A prolonged or broader geopolitical conflict, higher commodity prices, renewed trade tensions, greater geopolitical fragmentation and tighter financial conditions could affect global economic activity and investment. At the same time, faster productivity gains from technological developments and an easing of trade tensions could provide support to global growth. For the electrical and power-infrastructure ecosystem, long-term drivers remain comparatively structural. Increasing electrification, renewable-energy deployment, grid modernization and replacement of ageing power infrastructure are expected to support demand for transformers, transformer components and associated engineering services.

For manufacturers operating in this value chain, the prevailing environment reinforces the importance of efficient procurement, supply-chain resilience, cost management, technological capability and the ability to respond to evolving customer requirements.

Source: International Monetary Fund (IMF), World Economic Outlook, April 2026.

India continued to demonstrate resilience against the backdrop of global uncertainty, supported by domestic demand, investment activity and structural economic drivers. According to the IMF World Economic Outlook, April 2026, Indias real GDP growth is estimated at 7.6% for 2025 and is projected at 6.5% for 2026 and 2027. The IMFs assessment reflects sustained economic momentum and a favourable carryover from the stronger-than-expected performance in 2025. Indias growth trajectory continues to be supported by infrastructure development, manufacturing activity, urbanisation, rising electricity consumption and increasing investment across productive sectors. The countrys continued focus on renewable energy, strengthening of transmission and distribution infrastructure and development of domestic manufacturing capabilities is creating opportunities across the capital goods and electrical equipment ecosystem.

The power sector is expected to remain an important contributor to Indias infrastructure-led growth. Increasing electricity demand, renewable-energy integration, expansion of transmission and distribution networks and modernisation of existing infrastructure are expected to support investment across the power and electrical equipment value chain. The continued emphasis on domestic manufacturing and infrastructure development is also expected to provide opportunities for Indian manufacturers and engineering companies, while increasing the importance of operational efficiency, technological capabilities, supply-chain resilience and prudent capital allocation.

Source: International Monetary Fund (IMF), World Economic Outlook, April 2026.

Industry Overview

Global Transformer Industry

The global transformer market is witnessing steady expansion, driven by increasing electricity demand, investments in transmission and distribution infrastructure, renewable-energy integration and the ongoing modernisation of power grids. According to The Business Research Company, Transformer Global Market Report 2026, the global transformer market was valued at approximately USD 78.29 billion in 2025 and is projected to reach USD 82.23 billion in 2026 and USD 102.46 billion by 2030, representing a projected CAGR of 5.7% during 2026-2030.

The increasing requirement for reliable electricity infrastructure is being supported by continued urbanisation, industrialisation and electrification across economies. Expansion of transmission and distribution networks, coupled with the replacement and upgradation of ageing power infrastructure, is creating sustained demand for transformers across different voltage and application categories. The global transition towards renewable energy is further strengthening the demand outlook. The integration of solar, wind and other renewable-generation capacity require additional substations, transmission systems and transformation capacity for efficient evacuation and integration of electricity into existing grids.

At the same time, the growing electrification of transportation and industrial processes, along with the rapid expansion of data centres and other electricity-intensive applications, is creating new demand centres for power infrastructure. These developments are also increasing the requirement for reliable, efficient and technologically advanced transformer solutions. The industry is witnessing increasing emphasis on grid resilience, energy efficiency, smart-grid technologies, digital monitoring and advanced transformer designs. Manufacturers are therefore focusing on enhancing production capabilities, improving energy efficiency, strengthening testing and quality systems and building resilient supply chains. However, the industry continues to face challenges, including volatility in the prices and availability of key raw materials, supply-chain disruptions, extended manufacturing lead times and the significant capital requirements associated with transformer manufacturing. Increasing technical and customer requirements are also placing greater emphasis on engineering capabilities, product quality and timely execution.

Overall, the global transformer industry is expected to benefit from the long-term structural trends of electrification, renewable-energy integration, grid modernisation and rising electricity consumption, providing a favourable medium- to long-term growth environment.

Source: The Business Research Company, Transformer Global Market Report 2026; industry reports.

Indian Transformer Industry

Indias transformer industry continues to remain closely linked with the countrys expanding transmission and distribution infrastructure and is expected to remain an important beneficiary of increasing electricity demand, renewable-energy integration and grid modernisation initiatives. During FY2025-26, the industry continued to witness growth, supported by rising investments in transmission networks, substation capacity enhancement, renewable power evacuation infrastructure and strengthening of distribution systems. The power transformer segment continued to benefit from increasing substation requirements and transmission expansion, while the distribution transformer segment was supported by distribution infrastructure development programmes, electrification initiatives and modernisation of power networks.

The expansion of transmission and distribution infrastructure is expected to remain a key driver for the transformer industry. Increasing investments in transmission lines, substations and transformation capacity, together with the planned integration of renewable-energy generation, are expected to create sustained requirements for transformers and associated equipment. Transmission expansion is supporting demand for power transformers, while increasing solar and wind capacity is driving additional requirements for transformation and evacuation infrastructure. Distribution modernisation is supporting demand for distribution transformers, while industrial and infrastructure expansion is increasing electricity requirements and supporting demand for electrical equipment. Replacement of ageing power infrastructure is creating recurring demand for replacement, refurbishment and capacity augmentation. In addition, data centres, electric mobility, energy storage and railway electrification are emerging as additional applications creating new demand opportunities for transformers.

The industry is witnessing increasing emphasis on energy efficiency, reliability, product quality and technical compliance. Customers, utilities and EPC contractors are placing greater importance on timely delivery, testing capabilities, manufacturing quality and adherence to technical specifications. At the same time, manufacturers remain exposed to fluctuations in the prices and availability of CRGO steel, copper, aluminium and other key inputs. Competition, working-capital requirements, customer approval cycles and project execution requirements also remain important considerations. Overall, the Indian transformer industry presents a favourable medium- to long-term opportunity, supported by continued investment in power infrastructure and the countrys broader economic and energy- transition objectives.

Sources: Central Electricity Authority (CEA), National Electricity Plan; IEEMA, Industry Update & Industry Statistics; Industry Reports.

Industry Outlook

Indias power sector is undergoing a significant transformation, driven by rising electricity consumption, rapid renewable energy adoption, expansion of transmission infrastructure and the need for a more resilient and efficient power grid. These developments are expected to provide sustained growth opportunities for the transformer industry over the medium to long term.

The growing emphasis on grid strengthening, renewable energy evacuation, industrial development, urbanisation and electrification is expected to support demand for transformers and related electrical equipment. In addition to new infrastructure creation, the requirement for replacement, refurbishment and capacity enhancement of ageing electrical assets is expected to remain an important demand driver.

The transformer industry is also witnessing increasing focus on product efficiency, reliability, quality standards and technological capabilities. Manufacturers with strong engineering expertise, manufacturing capabilities and the ability to meet evolving customer requirements are expected to be well positioned to participate in the sectors growth opportunities.

For Jay Bee Laminations Limited, the changing industry landscape provides an opportunity to build upon its established expertise in CRGO laminations and transformer core manufacturing, while expanding its capabilities in transformer manufacturing and EPC solutions. The Companys growth journey will be guided by its focus on operational excellence, quality standards, customer relationships and disciplined execution. The Companys ability to capitalise on these opportunities will depend on effective capacity management, timely execution of projects, enhancement of technical capabilities,

efficient working capital management and maintaining sustainable margins while scaling its operations.

Business Overview

Jay Bee Laminations Limited has been operating since 1988 and has established a strong presence in the manufacturing of CRGO silicon steel laminations and transformer cores, catering to the requirements of the power and distribution transformer industry. Over the years, the Company has developed specialised capabilities in CRGO processing, precision cutting and transformer-core assembly, supported by continuous enhancement of its manufacturing infrastructure and technical expertise.

The Company operates manufacturing facilities across Noida and Greater Noida and has progressively expanded its product capabilities to address the evolving requirements of the transformer industry. FY 2025-26 marked an important milestone in the Companys growth journey, as it continued to strengthen its core CRGO and transformer-core business while advancing its strategy of forward integration and business diversification. During the year, the Company progressed its transformer manufacturing initiative through the development of Unit-III, providing a platform to enhance value addition by leveraging its established expertise in CRGO processing and transformer-core manufacturing. The Company also expanded into the EPC services segment during FY 2025-26, creating an additional opportunity to participate in the growing power infrastructure sector and broadening its presence beyond component manufacturing.

The Company views its expansion into transformer manufacturing and EPC services as a natural progression of its existing capabilities and as complementary extensions of its core business. Through this integrated approach, the Companys evolving business model can be represented as CRGO & Transformer Components + Transformer Manufacturing + EPC Services, enabling it to participate across a wider segment of the power-sector value chain and capture emerging opportunities arising from Indias expanding power infrastructure requirements.

Financial Performance

FY 2025-26 witnessed significant growth in the scale of the Companys operations. Revenue from Operations increased to Rs. 547.97 crore, compared with Rs. 367.46 crore in FY 2024-25, representing a year-on-year growth of approximately 49%. The growth was supported by the Companys existing CRGO business as well as the contribution from the newly established EPC vertical, which contributed Rs. 141.46 crore during the year.

The Companys financial performance during the year reflected the evolving business mix and the initial contribution from its new business initiatives. While the CRGO business experienced margin pressure amid significant movements in raw material prices, the Company continued to focus on operating efficiency, capacity utilisation and disciplined cost management. The Company also generated Rs. 30.1 crore of operating cash flow during FY 2025-26, supporting its liquidity position while undertaking investments in capacity and new business capabilities.

The key financial ratios for FY 2025-26, along with their comparison with the previous year, are set out below:

The movement in key ratios during the year was influenced by changes in the Companys business mix, working-capital requirements and investments associated with its expansion into new business segments. Going forward, the Company will continue to focus on improving the quality of earnings through better business mix, operational efficiency, effective capacity utilisation and disciplined project execution, while maintaining a prudent approach towards working capital and profitability.

Strategic Developments

During FY 2025-26, the Company continued to strengthen its forward-integration strategy and build capabilities across the power sector. During the year, the Company commenced execution of T&D EPC turnkey projects and also commenced its transformer manufacturing operations, with initial units delivered to customers. The Company also continued to build upon its technical and industry credentials, including its NTPC vendor approval and NABL accreditation for its CRGO testing laboratory and BIS licensing for selling distribution transformers.

Subsequent to the end of the financial year and up to the date of this Report, the Company received PGCIL approval for CRGO cores up to 765 kV class, marking a significant milestone in strengthening its capabilities for high-voltage applications. These developments support the Companys objective of expanding its presence across the power transmission and distribution value chain.

Risk Management

The Companys operations are exposed to various risks relating to raw material prices, supply chain, business expansion, working capital, customer concentration, competition, transformer manufacturing and EPC execution. Volatility in CRGO steel and other input costs, supply disruptions and changing market conditions may impact margins and operations. The Companys expansion into transformer manufacturing and EPC services also involves technical, project execution and working- capital risks. The Company seeks to mitigate these risks through prudent procurement and inventory

planning, supplier and customer diversification, operational efficiency, project-level monitoring, robust quality and testing systems, disciplined working-capital management and effective contract and compliance controls. Continuous monitoring of business and regulatory developments remains an integral part of the Companys risk management approach.

Human Resources

Human capital continues to play an important role in supporting the Companys growth and operational capabilities. As on March 31, 2026, the Company had 464 employees on its permanent rolls across its various functions and operations. With the expansion of the Companys activities into transformer manufacturing and T&D EPC services, the Company has continued to strengthen its workforce across technical, engineering, manufacturing, quality and project-management functions.

During the year, the Company remained focused on developing the skills and capabilities required for its expanding business operations, while maintaining emphasis on employee safety, operational discipline and productivity. The Company continues to foster a work environment that encourages learning, accountability and employee engagement. Going forward, strengthening specialised technical and managerial capabilities will remain an important focus area to support the Companys growth and operational excellence.

Internal Controls

The Company maintains an internal control framework commensurate with the size, nature and complexity of its operations. The framework covers key operational and financial areas, including procurement, inventory, production, sales and receivables, capital expenditure, financial reporting, statutory compliance, EPC project execution, contract management and cash-flow management.

With the expansion of its business activities, the Company continues to strengthen its internal processes and control mechanisms to support effective monitoring of operations, financial discipline and compliance. The Internal Audit function periodically reviews the adequacy and effectiveness of internal controls and reports its observations to the Management and the Audit Committee. The Company continues to review and strengthen its control environment in line with the growing scale and evolving complexity of its operations.

Cautionary Statement

This Management Discussion and Analysis contains certain statements concerning the Companys future business, prospects, plans, expectations and strategies which may constitute forward-looking statements. These statements are based on managements current expectations, assumptions and assessment of the business environment. Actual results may differ materially from those expressed or implied due to various factors, including changes in economic conditions, industry demand, raw- material prices, competition, regulatory developments, project execution, customer requirements, working-capital requirements, foreign-exchange movements and other risks and uncertainties. The Company does not undertake any obligation to publicly update or revise any forward-looking statements, except as may be required under applicable laws and regulations.