Jay Ushin Ltd Management Discussions

The global economy in FY26 remained uneven, shaped by geopolitical tensions, supply chain realignments, and cautious monetary policies. Inflationary pressures moderated compared to FY25, though commodity markets, particularly energy and metals, continued to exhibit volatility. Advanced economies slowed under monetary tightening, while emerging markets adapted through diversification and digital trade. India continued to outperform, with GDP growth of 6.4-6.6% supported by infrastructure spending, resilient domestic demand, and policy reforms. Inflation stabilized at 4.5%, while capital formation and employment generation remained policy priorities. Indias ability to balance growth with fiscal discipline reinforced its position as the fastest-growing major economy.

The Indian automotive industry recorded its highest-ever sales in FY2025-26, according to SIAM. Passenger vehicle sales reached 46.43 lakh units, reflecting a 7.9% growth over the previous year, with utility vehicles continuing to dominate volumes. The two-wheeler segment achieved a historic milestone, crossing 2.17 crore units, a 10.7% increase, driven by rural recovery and financing innovations. Commercial vehicle sales rose to 10.80 lakh units, registering 12.6% growth, supported by infrastructure projects and urban logistics. Three-wheelers also expanded strongly, with 8.36 lakh units sold, up 12.8%. Exports surged across categories, with passenger vehicle exports rising 17.5% and two-wheeler exports growing 23.4%. Electric vehicles continued their upward trajectory, with passenger EV registrations rising by more than 80%, while electric two-wheelers remained the largest contributor. Alongside volume growth, new industry themes such as connected mobility, digital retailing, and subscription- based ownership models began reshaping consumer behaviour and business strategies.

Looking ahead to FY27, the industry is expected to sustain growth, though moderated by global trade uncertainties and regulatory changes. Passenger vehicle sales are projected to cross 52 lakh units, with utility vehicles continuing to drive demand, while entry-level cars may remain under pressure due to affordability concerns. The commercial vehicle sector is expected to grow modestly, supported by infrastructure spending, though fuel price volatility could weigh on margins. The two-wheeler segment is anticipated to sustain high single-digit growth, aided by rural recovery and favourable financing conditions. Electric vehicle penetration in passenger vehicles is expected to rise to 3.5-4%, contingent on infrastructure expansion and policy support. The auto component industry is projected to grow at 7-9%, though tariff-related costs and supply chain risks remain significant. Digital ecosystems, AI-driven manufacturing, and green mobility solutions are expected to be key growth drivers.

Indias automotive industry continues to present strong opportunities. The governments incentives under production- linked schemes are accelerating investments in electric vehicles, batteries, and advanced auto components. The rise of connected vehicles, autonomous technologies, and subscription-based ownership models is opening new revenue streams and reshaping consumer engagement. Export opportunities are expanding as India strengthens its position as a cost-competitive manufacturing hub. Rural demand recovery, supported by financing innovations and favourable monsoons, is expected to boost two-wheeler penetration. At the same time, localization and sustainability initiatives are reducing import dependence and carbon footprint, positioning India as a leader in green manufacturing.

The Company delivered strong results in Financial year 2025-26, with net revenue from operations rising by Rs. 11,387.41 Lakhs, reflecting a 13.32% growth over the previous financial year. Profit before tax stood at Rs. 1,937.20 Lakhs, an 11.89% increase compared to the previous year. Operational excellence programs, digital transformation initiatives, and supplier collaboration contributed to efficiency gains. Localization efforts reduced foreign exchange exposure, while cost optimization enhanced competitiveness. These measures collectively strengthened profitability and positioned the Company for sustained growth.

The Company continues to maintain robust internal audit and control systems, ensuring compliance, accuracy, and transparency in all transactions. Independent audits, supplemented by management and Audit Committee oversight, reinforce governance standards and safeguard stakeholder interests.

Despite the growth trajectory, the industry faces several challenges. Regulatory compliance remains demanding, with BS-VI Phase 2 norms increasing production costs and impacting affordability. Supply chain risks persist, particularly semiconductor shortages and battery material constraints that affect EV production timelines. Economic uncertainty, driven by interest rate fluctuations and fuel price volatility, continues to influence consumer purchasing power. Cybersecurity threats are rising with the proliferation of connected vehicles, requiring stronger safeguards. Additionally, tariff wars and trade disruptions are adding incremental costs to auto component exports, impacting competitiveness.

Human capital remains central to sustaining competitiveness in an industry characterized by rapid technological change.

The Company invested significantly in digital skill-building, leadership development, and diversity initiatives. Employee engagement programs foster innovation and adaptability, ensuring that workforce capabilities remain aligned with evolving industry demands. A culture of continuous learning and collaboration is being nurtured to strengthen organizational resilience and performance.

Certain statements in the Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities, laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include raw material availability and prices, cyclical demand and pricing in the markets, exchange rate variations, global economic, social & demographic factors, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other incidental factors.