Jayatma Enterprises Ltd Management Discussions

Your Directors have pleasure in presenting the Management Discussion and Analysis Report for the year ended on 31st March, 2026.

GLOBAL ECONOMY

The global economy is facing another major shock. The conflict in the Middle East has triggered sharp increases in energy prices, renewed inflationary pressures, and fueled expectations of tighter monetary policy. Global growth is projected to slow to 2.5 percent in 2026, from 2.9 percent in 2025—the lowest rate since the COVID-19 pandemic—amid weaker prospects for economies dependent on energy imports and those directly affected by hostilities. Activity is expected to firm in 2027–28 as energy supplies recover, monetary easing resumes, and trade strengthens.

Growth in emerging market and developing economies (EMDEs) is expected to slow to 3.6 percent this year. For all EMDE regions, growth this year is forecast to be weaker than in 2025. Per capita income growth in EMDEs is projected to slow in 2026 to its weakest pace since the pandemic. The level of per capita income across EMDEs excluding China and India, relative to advanced economies, is not expected to return to the pre-pandemic level until after 2028, implying nearly a decade of lost income convergence.

Risks to the outlook remain skewed to the downside. A renewed escalation of hostilities or more prolonged disruptions to commodity flows could further raise commodity prices, intensify inflationary pressures and food insecurity, trigger financial stress, and lower growth. If energy supply disruptions prove more severe than assumed and are accompanied by substantial financial stress, global growth could fall to just 1.3 percent in 2026. Persistent trade policy uncertainty, geopolitical strains, and weather-related shocks also pose material risks. On the upside, broader investment in and adoption of artificial intelligence (AI) could lift activity.

Policy action is critical to address ongoing challenges. Enhanced global cooperation is needed to safeguard energy and food security, bolster the trading system, and advance the energy transition. Domestically, policy makers will need to balance controlling inflation with supporting activity, strengthen fiscal sustainability, and maintain financial stability. Slower growth prospects translate into reduced investment, constrained hiring, and tighter fiscal space, compounding the challenge of creating jobs in EMDEs with growing workforces in an era of potentially transformative change linked to AI. Meeting this challenge will require a concerted agenda centered on the conditions for job creation: investing in physical, human, and digital capital; fostering a business-friendly environment; and mobilizing private investment. In addition to the global and regional outlooks, this edition of Global Economic Prospects features two analytical chapters. One chapter examines the impact of government debt on interest rates. Another chapter considers the challenges of fiscal policy in commodity-exporting EMDEs.

A Rising Challenge: Sovereign Debt Levels and Interest Rates in EMDEs. Rising government debt poses a key challenge for EMDEs, as it leads to higher interest rates, higher debt-service payments, and a greater likelihood of debt distress.

Debt levels are positively associated with dollar-denominated sovereign bond spreads and domestic-currency government bond yields. The relationship with rising debt is non-linear: the increases in spreads or yields associated with increases in debt-to-GDP ratios are greater the higher the debt-to-GDP ratio.

The increase in EMDE debt-to-GDP ratios since 2010 is associated with increases in sovereign spreads and domestic-currency yields of about 110 and 30 basis points, respectively. Rising debt in advanced economies, by pushing up yields in those economies, has added further to the increase in EMDE interest rates. With EMDE government debt at historically high levels, additional borrowing may lead to progressively larger increases in interest rates. Rising debt has led to even larger increases in interest rates in countries with a history of default, low credit ratings, frontier market status, heavy reliance on short-term debt, and weak governance.

The findings underscore the importance of strengthening fiscal positions. This can be achieved through stronger domestic revenue mobilization, more efficient public spending, improved debt management, support for domestic debt market development, and, where appropriate, debt-for-development swaps. By helping contain borrowing costs and preserve fiscal space, these measures can also support the infrastructure, services, and private investment needed for long-term growth and job creation.

Navigating Volatility: Fiscal Policy and Commodity Price Swings. Large commodity market disruptions—most recently triggered by the conflict in the Middle East—have brought renewed attention to the persistent fiscal challenges faced by commodity-exporting EMDEs. Since 2000, fiscal positions in these economies have generally been weaker than those in other EMDEs, reflecting lower and more volatile revenues, commodity price swings, and limited buffer accumulation in good times.

Government debt across EMDEs has risen since the global financial crisis, but commodity exporters are especially vulnerable. A 1 percent increase in commodity prices raises both revenues and primary spending in commodity exporters by about 0.4 percent after five years, suggesting that revenue windfalls are gradually spent rather than saved. Fiscal positions over commodity price cycles vary across exporters of different commodities. Primary balances in energy and metal exporters strengthen during booms and worsen in slumps, mainly as a result of revenue swings, while primary spending remains broadly contained; debt ratios fall in booms and rise in slumps. In contrast, agricultural exporters increase spending in booms, offsetting revenue gains and leading to more lasting debt accumulation.

Although sovereign wealth funds (SWFs) and fiscal rules have helped smooth spending over commodity cycles in some countries, they offer limited protection amid intensifying spending pressures after commodity shocks. Policy implications point to an integrated approach combining credible fiscal rules, well-governed SWFs, independent fiscal councils, strengthened debt management, revenue diversification, and robust institutions. Together, such reforms are critical to enhancing fiscal resilience, reducing volatility, supporting sustainable and inclusive growth, and boosting job creation.

Global Growth Forecast: The report projects global growth to slow to slow to between 2.5% and 3.1%,

Cause of Slowdown: The slowdown was primarily attributable to ongoing geopolitical tensions in the Middle East, which led to volatility in crude oil prices, disruptions in global trade and supply chains, inflationary pressures, and cautious market sentiment, thereby affecting overall economic activity and demand.

Regional Impact: The report notes that the developing world, outside of Asia, is experiencing a significant slowdown in growth, with growth rates declining over the past three decades.

Advanced Economies: Growth in advanced economies is projected to ease to between 1.2% and 1.5% in 2026, a deceleration driven by aging populations, high debt levels, and tight monetary policy. This subdued outlook is heavily influenced by cooling activity in major markets like the United States, the Euro Area, and Japan.

Emerging Markets and Developing Economies: Emerging market and developing economies (EMDEs) are projected to grow by roughly 3.9% to 4.0% in 2026, continuing to outpace advanced economies which are forecast to grow around 1.5% to 1.8%. While robust domestic demand and AI-driven tech investments bolster this growth, rising debt, Middle East geopolitical tensions, and global commodity shocks create headwinds

Key Downside Risks: The 2026 global economic outlook projects subdued growth of 2.5% to 3.3% globally, with downside risks weighted heavily toward escalating geopolitical conflicts, persistent energy and commodity volatility, rising trade fragmentation, and a severe reevaluation of technology expectations

(Source: *World Economic Outlook, January, 2026, ** World Bank - Global Economic Prospects June 2026)

INDIAN ECONOMY

Indias economy remains the worlds fastest-growing major economy, with real GDP expanding by a robust 7.4% to 7.7% in FY26. Growth is expected to moderate to a sustainable 6.5% to 6.8% in FY27 as the high base effect catches up. Core economic engines remain resilient, backed by steady urban and rural consumption, strong services activity, and government capital expenditure.

Heres a more detailed look:

Projected Growth:

India is projected to remain the worlds fastest-growing major economy in FY2026, with GDP growth expected to be around 6.3% - 6.8% despite global economic uncertainties. Strong domestic demand, government capital expenditure, and resilient services continue to support growth.

Global Context:

While the global economy is experiencing moderate growth amid geopolitical tensions and trade uncertainties, India has demonstrated greater resilience than most major economies. Its stable macroeconomic fundamentals and expanding domestic market position it favorably on the global stage.

Drivers of Growth:

Indias economic growth is being driven by robust domestic consumption, increased public infrastructure investment, manufacturing expansion under the Make in India initiative, rapid digital transformation, and sustained growth in the services sector.

Global Leadership

India is strengthening its position as a global economic leader through rapid digital innovation, growing manufacturing capabilities, strategic reforms, and an active role in international forums. Its emergence as a trusted investment destination continues to enhance its influence in the global economy.

Future Outlook:

Indias economic outlook remains optimistic, with growth expected to stay resilient despite global uncertainties, supported by strong domestic demand, sustained investment, and structural reforms. Continued focus on manufacturing, infrastructure, exports, and digital transformation is expected to strengthen Indias position as one of the worlds fastest-growing major economies.

ORGANISATION PROFILE:

During the financial year under review, the Company continued to maintain its focus on sustaining its business operations and overall performance. Despite the challenging business environment, the Companys performance remained at satisfactory levels. The Company continues to focus on strengthening its operations, improving efficiency and maintaining sustainable growth. It is expected that the economy will continue to grow in the coming years, and the Company remains confident of maintaining its growth trajectory.

OPPORTUNITIES AND THREATS:

Opportunities:

The Indian economy continues to offer significant growth opportunities, supported by robust domestic demand, increased government spending on infrastructure, digital transformation, and policy reforms. Rising private investments, expanding manufacturing under the Make in India initiative, and growing exports are expected to further strengthen the business environment. Companies focusing on innovation, operational efficiency, and technology adoption will be well positioned to capitalize on these opportunities.

Threats:

Businesses may face challenges from global economic uncertainty, geopolitical conflicts, inflationary pressures, supply chain disruptions, exchange rate

volatility, and fluctuating commodity prices. In addition, evolving regulatory requirements, intense market competition, and changes in consumer demand may impact business performance. Organizations will need to remain agile and strengthen their risk management practices to effectively navigate these challenges.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial performance of the Company for the year 2025-26 is described in the Directors Report under the head Financial Result.

RISKS AND CONCERNS

The Company is exposed to risks arising from changes in economic conditions, regulatory developments, market competition, inflationary pressures, and technological advancements. The management continuously monitors these risks and has implemented appropriate internal controls and risk management practices to mitigate their potential impact on the Companys operations and financial performance. etc.

INTERNAL CONTROL SYSTEM:

The Company has established an adequate system of internal controls commensurate with the size, nature, and complexity of its business operations. These controls are designed to safeguard the Companys assets, ensure the accuracy and reliability of financial records, promote operational efficiency, and ensure compliance with applicable laws and regulations. The internal control framework facilitates the timely identification and management of operational and financial risks. Regular reviews and monitoring are carried out by the management to evaluate the effectiveness of the internal control systems and to implement corrective measures wherever necessary. The Audit Committee periodically reviews the adequacy and effectiveness of the internal control systems and recommends improvements, as required. The management believes that the existing internal control systems are adequate and effective for the Companys business operations.

RECENT TREND AND FUTURE OUTLOOK:

The Indian economy continues to demonstrate resilience despite global economic uncertainties, supported by strong domestic demand, increased infrastructure spending, and ongoing policy reforms. Rapid digital transformation, technological advancements, and a favorable business environment are creating new growth opportunities across industries. The Company remains focused on improving operational efficiency, strengthening its core business, and exploring emerging opportunities to achieve sustainable growth. With prudent financial management and a customer-centric approach, the Company is well positioned to navigate evolving market conditions and create long-term value for its stakeholders.

CAUTIONARY STATEMENT:

Statements made in this Report describing the Companys objectives, projections, estimates, expectations, or predictions may constitute "forward-looking statements" within the meaning of applicable laws and regulations.

Actual results may differ materially from those expressed or implied due to various factors, including changes in economic conditions, government policies, market dynamics, regulatory developments, and other risks beyond the Companys control. The Company undertakes no obligation to publicly update or revise any forward-looking statements based on subsequent developments, except as required under applicable law.

Date: 07th August, 2026

Place: Ahmedabad