Josts Engineering Company Ltd Management Discussions

Introduction

India has made significant strides towards developing its engineering sector on its quest to become a global superpower. Indias capital goods manufacturing industry serves as a strong base for its engagement across sectors such as engineering, construction, infrastructure and consumer goods, amongst others. The capital goods sector contributes to 12% of Indias manufacturing output and 1.8% to GDP. The market valuation of the capital goods industry is estimated to be approximately ? 10.2 trillion in FY 2025.

The Governments Vision Plan 2030 proposed an action plan to become a manufacturing and export hub for construction equipment and propel the development of world-class infrastructure in the country.

The countrys nominal GDP for FY25 is estimated at ?33.10 lakh crore (US$ 3.8 trillion) with growth rate of 9.9%, compared to ?30.12 lakh crore (US$ 3.5 trillion) in FY24. Strong domestic demand for consumption and investment, along with Governments continued emphasis on capital expenditure is seen as a key driver of GDP in the second half of FY25. India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships.

In FY 2025, Indias defense sector achieved exports soaring to a record ?23622 crore (approximately $2.76 billion). This represents a significant increase of 12.04% YoY. The defe n se secto r wa s a l I ocate d a b u d g et of ? 6.2 1 l a kh c ro re ( U S $ 74.74 b i l l i o n ) i n 20 2 3- 24 . In 2023, Defense Minister of India has called upon Indian and global industry leaders to support the governments endeavor to design, develop and manufacture cutting-edge products using critical technologies within India to attain complete Aatmanirbharta in defense. The vision of the government is to achieve a turnover of US$ 25 billion including export of US$ 5 billion in Aerospace and Defense goods and services by 2025.

The India Automated Material Handling market size is estimated at US$ 1.47 billion in 2024, and is expected to reach US$ 2.66 billion by 2029, growing at a CAGR of 12.70% during the forecast period (2024-2029). The Indian material handling sector has observed a momentous growth in recent years due to rising investment in infrastructure development, increased demand for higher automation, and safe working practices in the manufacturing area.

A. Industry structure and developments:

Business Overview

Engineered Products Division (EPD)

Josts Engineering Products Division (EPD) remains committed to delivering globally innovative technologies that not only enhance environmental sustainability but also improve the performance and efficiency of our customers processes and products.

In collaboration with some of the worlds leading manufacturers, EPD offers advanced engineering solutions tailored for highly demanding industrial applications. These solutions leverage the legacy of innovation and global leadership of our partners, seamlessly integrated with Josts local expertise, market knowledge, and extensive customer reach.

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During the year, the Engineered Products Division (EPD) continued to strengthen its portfolio through the addition of new principals and by expanding its testing service capabilities. These strategic developments are aligned with our commitment to provide advanced solutions across critical sectors such as power, automotive, aerospace, education, and research.

New Principals Added

Tower Solutions: Canada

We secured our first order for Emergency Restoration Systems (ERS) from Haryana Vidyut Prasaran Nigam Limited (HVPNL). This marks a significant milestone in our efforts to offer integrated tower solutions. We are actively pursuing similar opportunities with other transmission utilities across India.

Kanomax,Japan

A new alliance was established with Kanomax, a globally recognized name in analytical testing instruments for various engineering parameters. This partnership opens up promising opportunities, particularly in the education, research, and automotive sectors.

Onosokki,Japan

We onboarded Onosokki, a complementary principal that enhances our NVH (Noise, Vibration, and Harshness) offerings. Onosokki expands our capabilities with battery testing systems, tachometers, and dynamometer testing solutions, aligning well with the growing demand for EV and powertrain testing applications.

Expansion of Testing Services

To support our long-term vision of becoming a one-stop solution provider for industrial and utility testing services, we have undertaken the following initiatives:

Calibration System Procurement

We have placed an order for a calibration system for accelerometers and microphones,

which will be NABL-certified. Delivery is expected by October 2025, further enhancing our mechanical and acoustic testing service offerings.

Electrical Testing Instruments

Additional instruments to bolster our electrical testing services were ordered during the last quarter of FY 25. These are scheduled for delivery by December 2025, and will significantly augment our capability to serve the growing needs of the power sector.

These additions and upgrades reinforce our strategic focus on delivering comprehensive engineered solutions and value-added services to customers across diverse industries.

Material Handling Division (MHD)

The Material Handling Division of Josts Engineering continues to lead the intra-logistics sector with a proven legacy of innovation and customer trust. As a pioneer in internal material handling in India, Josts offers engineered solutions that enhance efficiency by saving labor, material, time, and space—empowering businesses to optimize their material movement processes.

With over four decades of expertise, the Division operates from Greenfield facility in Murbad, near Mumbai, and is supported by a nationwide network of sales and service professionals. This infrastructure enables Josts to serve a wide array of industries including warehousing, logistics, infrastructure, pharmaceuticals, and manufacturing.

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Our flagship brands—JUMBO, PYGMY, and JOTRUK—have long been valued for their rugged design, long service life, and low maintenance costs. These products consistently deliver operational performance in demanding environments and are trusted by customers across India. Along with our flagship products, this financial year we have upgraded our Stackers and BOPTs and value engineered our Forklift portfolio.

Transition to Lithium-ion Technology

In line with evolving industry needs and environmental trends, our entire Material Handling Equipment (MHE) portfolio is now Lithium-ion battery ready. This transition delivers a range of benefits to our customers:

Longer battery life with reduced degradation over time

Fast charging capabilities, significantly reducing equipment downtime

Opportunity charging, allowing batteries to be topped up during short breaks without compromising long-term battery health

This technology shift reflects our commitment to sustainability, productivity, and total cost-of-ownership improvement—offering clients higher energy efficiency, lower operating costs, and greater flexibility in 24/7 operations.

Comprehensive Solutions with Proven Impact

Josts provides bespoke, end-to-end solutions for stacking, moving, and warehousing, supported by robust after-sales service and application engineering expertise. From equipment deployment to lifecycle management and site optimization, the Division remains a trusted partner in driving productivity and operational excellence.

Murbad Greenfield Facility (JECL Engineering Ltd)

Josts Engineering has achieved a significant manufacturing milestone through its wholly owned subsidiary, JECL Engineering Ltd, which commissioned a greenfield manufacturing unit at MIDC Murbad, Plot No. L 5, Kudawali Village (~ 1,27,237 sq ft of leasehold land), acquired in mid 2023.

Trial production activities began on 10^th May 2024, followed by commercial production commencing on 1^stApril 2025. The plant currently has an annual production capacity of ~ 2,100 material handling units, which is approximately double the previous capacity housed at the Thane site.

Strategic Impact & Capacity Leverage

This capacity expansion enables Josts to serve larger orders with shorter lead times and lower haulage cost across sectors including warehousing, logistics, manufacturing, utilities, and infrastructure.

High operating leverage is expected to yield margin expansion starting FY26, particularly as JECL scales up utilization and seniority in production efficiencies.

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B. Opportunities and threats

The company faces various operational risks, including geological, supply chain, and procurement risks, as well as issues related to client payment terms. Risk management is a critical part of our strategic approach, as we proactively identify potential risks and adjust our short-term plans to mitigate impacts that could materially affect our long-term goals.

Economic Risk: A downturn in economic growth could severely affect the infrastructure sectors and consequently, our companys performance.

• Mitigation: Josts utilizes efficient cost management and tweaks the marketing mix to manage these risks effectively.

Credit Risk: Delayed payments from clients can negatively impact the companys cash flow, affecting several other capital-dependent activities.

• Mitigation: We emphasize robust control over working capital and have developed strong processes for continuous tracking of debtor profiles and cash inflows to minimize this risk.

Cost Risk: Increases in raw material prices and competitive pricing could threaten the business.

• Mitigation: We mitigate this through long-term vendor relationships and by maintaining a dedicated team that tracks material pricing.

HR Risk: The companys operations could be impacted if there are not enough skilled employees who are motivated to innovate and grow under pressure.

• Mitigation: We focus on creating a motivated workforce by paying attention to the needs of our employees and ensuring a good working environment. Regular training and team-building exercises are conducted to minimize fatigue and enhance performance.

The risks to growth remain largely external, including rising tariff barriers, stretched supply chains and continuing geopolitical tensions. The country will have to adapt to the evolving global landscape and harness its domestic strengths to drive growth in a sustainable manner.

Strong budgetary push for the manufacturing sector, MSMEs, along with supportive PLI reforms, will boost the domestic manufacturing companies and attract foreign companies to invest in the country; thereby, foster Indias path to achieve self-reliance.

C. Financial and operational performance

Economic Risk

A downturn in economic growth could severely affect the infrastructure sectors and consequently, our companys performance.

Revenue for the Material Handling Division has increased slightly against last years revenue. Profit before tax has increased by 19.47% against last year due to cost optimization.

Operational Review:

During the year, revenue has increased from ?10,434 lakhs to ?10,751 lakhs.

Profit before tax has increased to 11% in FY25 against 9% in FY24.

Financial Review:

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Particulars	FY24-25	FY23-24
Revenue (? in lacs)	10,751	10,434
Profit/Loss before tax (? in lacs)	1,129	945
Profit before tax (%)	11%	9%

Engineering Products Division (EPD)

EPDs revenue increased by 57.22% in FY24. Our expected orders were on time due to proper movement.

Operational Review:

During the year, revenue increased by 57.22%.

Profit before tax has increased to 16% in FY 25 against 14% in FY24.

Financial Review:

Particulars	FY24-25	FY23-24
Revenue (? in lacs)	10,982	6,985
Profit/Loss before tax (? in lacs)	1,801	963
Profit before tax (%)	16%	14%

D. Outlook

Defense Sector Developments: The Indian defense sector is experiencing robust growth and a positive outlook, driven by government initiatives like Atmanirbhar Bharat (self-reliant India) and increasing capital outlays. Revenue growth is projected at 15-17% in FY26, fueled by strong execution, a healthy order book, and a focus on indigenization. The government aims to increase domestic defense production to ?3 lakh crore by FY29, while also boosting exports.

Power Sector growth: With per capita demand potentially to double by 2035, and a 500 GW renewables goal, and new demand from EVs/AI, Indias power sector is poised for sustained double digit volume growth and continued capacity additions. This is leading to decadal investment plan in transmission and distribution network across the country and also significant investments in grid modernization.

Civil Aviation Industry Expansion: The Indian civil aviation sector is experiencing robust growth, fueled by increasing passenger traffic, infrastructure development, and government support. Projections indicate continued expansion, with airport operators expected to see significant revenue growth. Factors like rising low-cost carriers, modernization of airports, and focus on regional connectivity are driving this positive outlook.

Josts Strategic Positioning: Josts maintains a strong presence across infrastructure, defense, automotive, aerospace, energy and railway sectors, well-positioned to leverage the ongoing capital expenditure cycle. The company is expected to deliver an improved performance in the upcoming year.

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Internal Controls and Their Adequacy:

Josts employs a robust internal control system that ensures operational effectiveness and accurate, timely financial reporting, consistent with the companys policies. This system is crucial for identifying and mitigating risks. Over the past year, these controls were rigorously tested, revealing no significant weaknesses.

External auditors regularly review Josts internal controls, providing reports to senior management to facilitate prompt corrective actions if deficiencies are identified. A com- prehensive, risk-based internal audit program continuously verifies the sufficiency and efficacy of these controls.

E. Material developments in Human Resources / Industrial

Sustainable, profitable growth can only be achieved in an organization that focuses on the culture of performance; where employees are engaged and empowered to do their best.

We ensure that the work environment is conducive to the growth of employees. Significant human resource initiatives were taken to ensure that the business operates without any impediments. Josts has 277 permanent employees as of 31^st March 2025.

F. Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof

Particulars	FY 24-25	FY 23-24	change Y-o-Y
Debtors Turnover Ratio	3.24	3.37	-3.86%
Inventory T urnover Ratio	25.44	14.45	76.08%
Interest Coverage Ratio	22.99	19.18	19.86%
Current Ratio	1.68	1.68	0.11%
Debt Equity Ratio	0.04	0.14	68.14%
Net Profit Margin %	7.40	5.56	33.07%
Return on Networth %	30.08	27.13	10.88%

Inventory Turnover Ratio - Increase in Inventory turnover ratio is due to increase in sales and decrease in inventory in FY 24-25.

Debt Equity Ratio - Decrease in debt equity ratio is due to decrease in debt from ?878 lacs to ?360 lacs in FY 24-25

Net Profit Margin Ratio - Due to increase in sales, the profitability has increased during the year in comparison to previous year which further resulted in increase in net profit margin.

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G. Cautionary Statement:

Statements made in Management Discussion and Analysis are only predictions within the meaning of applicable securities laws and regulations. Many factors may affect the actual results, which could be different from what the Directors envision in terms of future performance and outlook.

The Company assumes no responsibilities for the predictive statements herein, which may undergo changes in the future based on subsequent developments, information or events.

For and on behalf of the Board

Date : 14^th August 2025 Sd/-

Place : Mumbai Jai Prakash Agarwal

Chairman DIN: 00242232

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