Jayesh Logistics Ltd Management Discussions

Industry Overview

Indias logistics sector is one of the largest in the world, contributing approximately 14.4% of GDP and supporting over 22 million jobs. Valued at approximately US$435 billion in FY22 following a 14% postpandemic recovery, the market is projected to reach approximately US$591 billion by FY27. Organised players — such as Jayesh Logistics — currently represent only 5.5-6% of this market, but are expected to grow at a CAGR of approximately 32% between 2022 and 2027, more than doubling their share to 12-15% by FY27, as customers increasingly favour integrated, technology-enabled, compliant operators over the fragmented unorganised segment.

Opportunities and Threats

Opportunities

• Continuing shift from unorganised to organised operators, favouring compliant,technology-enabled players like Jayesh Logistics.

• Government infrastructure investment improving connectivity and cost-efficiency on routes the Company already serves.

• Sustained demand for bulk industrial cargo movement (steel, cement, coal) from manufacturing and e-commerce growth.

Threats

• Infrastructure constraints (roads, ports, rail capacity) contributing to delays and higher operating costs industry-wide.

• Intense price competition from fragmented, unorganised operators on price-sensitive routes.

• Sector-wide shortage of skilled drivers, affecting retention and wage costs across the industry.

• Regulatory complexity, particularly on cross-border lanes such as the Indo-Nepal corridor.

Business & Operational Review

The Company is a logistics operator specialising in bulk cargo — the movement of 30-40 tonne loads over medium and long distances. Its cargo comprises industrial bulk materials (iron and steel, cement and coal) and FMCG goods moved in containers, and its revenue is generated across three streams: the owned fleet, hired/attached fleet, and non-freight services. Headline revenue therefore reflects more than owned- fleet freight alone. During the year, Jayesh Logistics strengthened its operational capabilities through fleet expansion, new customer engagements and continued investment in technology, enhancing the Companys capacity to serve growing transportation requirements while improving operational flexibility and service reliability.

The Company operates in a single reportable business segment — transportation and allied logistics services — and accordingly, segment reporting under the applicable Accounting Standard has not been presented separately (Note 35 to the financial statements). Within this single segment, revenue is tracked across two service lines:

Logistics Routes & Executions

For most of its history the Company operated along the Indo-Nepal corridor, moving cargo from Kolkata and Haldia to the hinterland and across the Raxaul border into Nepal, alongside routes across Eastern India. During FY26 it established operations in new regions of India — principally within Assam and along the Chhattisgarh-Madhya Pradesh corridor. These are distinct routes: movement within Assam is anchored by the coal customers, while the Chhattisgarh-Madhya Pradesh movement (from mines in Chhattisgarh to a power plant in the Singrauli region) is anchored by the powerplant customers. Ground implementation in these competitive new territories was the years single

biggest operational challenge — involving new driver communities, training and local issues — and took a few months to stabilise. Jayesh Logistics continues to strengthen its multimodal transportation capabilities, enabling efficient movement of goods across road and rail networks. By connecting key industrial and commercial destinations, the Company supports customers with reliable freight movement, greater network flexibility and end-to-end logistics solutions aligned with evolving supply chain requirements.

Fleet Expansion

During FY26, the Company expanded its owned fleet from 95 to 170 trucks (approximately 79%),

with the addition of 77 vehicles and the sale of 2 vehicles. Primarily side-walled multi-axle trucks for cement, coal and steel contracts; flatbed trucks, which are also used to carry containers, remained broadly stable. The fleet is built principally on Tata Motors, Ashok Leyland and Bharat Benz vehicles maintained through the Companys in-house facility at Durgapur together with vendor partnerships across its operating regions. Major investments during the year included over 2,932 lakh towards the owned fleet, 401.20 lakh towards the new office. Fleet capital expenditure was funded through a combination of IPO proceeds and debt.

New Customer Engagements

Two significant customer engagements were secured during the year — for Dalmia Bharat Cement, plant-to-plant Clinker & Coal movement in Assam, and for Adani (Mahan Energen), continuous coal movement in the Chhattisgarh- Madhya Pradesh belt, both won in competitive processes and reflecting the Companys committed owned fleet, its bulk-cargo experience and its record of dependable execution. The Companys customer relationships are long-standing, with most major customers associated with it for more than eight years.

Technological Advancement

SMART-SYS is the Companys proprietary, modular logistics technology platform, developed with a technology vendor to improve operational efficiency, visibility and customer service. The GPS/RFID- based real-time fleet tracking, driver-behaviour monitoring and fuel-consumption tracking. A Services Layer, under implementation, integrates ERP data with invoicing, insurance/claims management and route optimisation. A planned Phase 2 (the "Application and Operator Layer") is intended to add big-data analytics, AI/ML tools, a customer-experience dashboard and remote command-and-control capability; 71.50 lakh of the net IPO proceeds has been earmarked for this

phase. The Company has also entered a five-year partnership with IIM Sirmaur (agreement dated 18 August 2024) to develop a Centre of Excellence in Logistics covering benchmarking, training, data analytics and applied research.

Material Developments in Human Resources / Industrial Relations

The Companys workforce grew during FY26 in step with its fleet expansion, with a significant proportion of new drivers onboarded to serve its newly established operations in Assam and the Chhattisgarh-Madhya Pradesh corridor — one of the years most demanding operational tasks, requiring investment in recruitment, training and local engagement, supported by the Companys driver recognition programme and structured training initiatives. Employee relations remained cordial throughout the year, with no material industrial disputes reported.

Financial Review

The financial results below are drawn from the audited financial statements for FY 2025-26, with FY 2024-25 comparatives Revenue from operations grew 15.6% to 129.30 crore, supported by the expansion into new regions and the new customer engagements during the year. Profit after tax grew 39.6% to 10.08 crore, and EBITDA margin improved to 15.44% (FY25: 15.13%). Net worth increased to 52.16 crore, roughly three times the prior year, driven by the IPO and the profit retained during the year.

The debt-equity ratio improved to 0.87x from 1.61x. It is important to read this correctly: while the ratio improved, total borrowings increased in absolute terms, from 27.99 crore to 45.13 crore, as fleet expansion was funded through a combination of IPO proceeds and debt. The improved ratio therefore reflects a stronger equity base and headroom for affordable debt, rather than an absence of new borrowing.

Details of Significant Changes (25% or more) in Key Financial Ratios

The following ratios, as disclosed in Note 37 to the audited financial statements, changed by 25% or more (on a relative basis) during FY 2025-26 as compared to FY 2024-25:

IPO Proceeds and Utilisation

The Companys IPO comprised a fresh issue of 23,47,000 equity shares of face value 10 each at 122 per share, aggregating 28.63 crore (gross). After issue expenses, the net proceeds of 24.68 crore are being applied as set out below, as disclosed in the prospectus:

Risk Management

The Company operates a periodic, board-level risk- review process. Its principal risks, and its approach to managing them, are summarised below.

• Fuel-price volatility — managed through escalation clauses in customer contracts, supplier arrangements and efficiency gains. ^•

• Customer and corridor concentration — the Companys revenue remains

concentrated among a limited number of large customers, geographic diversification into India, and a broadening customer base.

• Working-capital intensity — as receivable cycles lengthen with growth, managed through disciplined receivables management, vendor terms and the buffer provided by IPO proceeds.

• Driver availability and retention — managed

through the agent network, recognition programmes, competitive compensation and training.

• Regulatory and cross-border compliance — managed through dedicated compliance resources and engagement with authorities across states and the Indo-Nepal corridor.

• Technology and capex/utilisation risk — managed through continued investment in SMART-SYS, customer diversification and maintenance discipline.

Internal Control Systems and Their Adequacy

The statutory auditors, M/s GGPS and Associates, have expressed an unqualified opinion on the adequacy and operating effectiveness of the Companys internal financial controls with reference to financial statements as at March 31,2026 (Annexure C to the Auditors Report, dated May 15, 2026), based on the framework in the ICAIs Guidance Note on Audit of Internal Financial Controls over Financial Reporting. The auditors have also confirmed, in their reporting under the Companies (Auditors Report) Order, 2020, that the Companys accounting software has an audit trail (edit log) feature that operated throughout the year for all relevant transactions, and that the audit trail has not been tampered with. The Company maintains an internal audit function, with internal audit fees separately disclosed in the financial statements (Note 24(a)).

Outlook

The Companys near-term focus is on realising the benefit of a full year of operation from the fleet added during FY26, on strengthening operational efficiency, and on deepening its presence in its current operating regions rather than rapid entry into new ones. It intends to continue advancing its technology platform, to explore integrated and multimodal (road-rail) options where these offer advantages on longer hauls, and to explore cleaner-fuel options for the fleet over time. Over a three-year horizon, the Company aspires to be among Indias leading

bulk-cargo logistics operators. Consistent with its obligations as a listed company, the Company has refrained from setting specific financial targets; its forward-looking commentary is qualitative and directional.

Cautionary Statement

Statements in this Management Discussion and Analysis 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 materially from those expressed or implied. The Company assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.