Josts Engineering Company Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Introduction

India has made significant strides in developing its engineering sector on its path toward becoming a global economic power. The capital goods manufacturing industry continues to serve as a strong base for the countrys engagement across engineering, construction, infrastructure and consumer goods, while the broader economy remains the fastest-growing among major global economies.

The capital goods sector contributes approximately 1.9% to Indias overall GDP and continues to account for around 12% of total manufacturing output. Capital goods production rose from Rs.2,66,672 crore in FY21 to Rs.5,69,900 crore in FY25 (approximately US$ 67.40 billion), with heavy electrical equipment and earthmoving and mining machinery emerging as the largest contributors within the sector.

The Governments Vision Plan 2030 continues to set out an action plan for India to become a manufacturing and export hub for construction equipment, alongside the development of world-class infrastructure across the country.

Indias nominal GDP for FY 2025-26 is estimated at Rs.346.36 lakh crore (approximately US$ 3.9 trillion), against Rs.318.07 lakh crore in FY 2024-25, registering a growth rate of 8.9%. Real GDP for the year is estimated at Rs.323.12 lakh crore, growing 7.7%, compared with 7.1% growth in FY 2024-25, per the Provisional Estimates released by the Ministry of Statistics and Programme Implementation (MoSPI) in June 2026.

India continues to be recognised as the fastest-growing major economy in the world, having overtaken Japan to become the fourth-largest economy globally by nominal GDP, and remains on track to be among the top three global economic powers over the next 10-15 years, backed by strong domestic demand, sustained government capital expenditure, and robust institutional partnerships.

A Industry structure and developments:

Business Overview

Against the backdrop of Indias continued economic expansion, increasing infrastructure investments, government-led manufacturing initiatives and the growing focus on technology-driven industrial development, the engineering and capital goods sector continues to present significant opportunities for specialised engineering solution providers. The Companys Engineered Products Division (EPD) is well positioned to participate in these emerging opportunities by leveraging its technology partnerships, engineering expertise and established customer relationships.

Engineered Products Division (EPD)

In line with these favourable industry trends and the evolving requirements of Indias industrial and infrastructure ecosystem, Josts Engineerings Engineered Products Division (EPD) remains focused on delivering innovative, technology-led solutions and services that enhance the features and uniqueness of customers end products, while improving the performance, productivity and efficiency of their processes and products.

Through partnerships with some of the worlds leading manufacturers, EPD delivers advanced engineering solutions tailored to demanding industrial applications. These partnerships enable the Company to combine its technology partners global innovation and product capabilities with Josts engineering expertise, market understanding and extensive customer reach, thereby creating value across a diverse range of industrial applications.

During the year, EPD continued to strengthen its portfolio of products, solutions and technical services, while deepening its engagement with existing customers and expanding its presence across new customers and emerging market segments. In particular, the Division made further inroads into high-technology and high-growth sectors, including Space and Data Centers, reflecting its ability to adapt its offerings to evolving industrial requirements and emerging opportunities.

The Companys continued focus on technology, specialised engineering solutions and customer-centric applications positions EPD to benefit from the ongoing growth in Indias manufacturing, infrastructure and technology-driven industries.

Technical Service Centres

As a key focus area, in-depth technical customer care and testing service capabilities were further bolstered and elevated. Additional engineering and technical parameters, along with related instrumentation, were added to broaden calibration and technical service offerings-in line with our core objective of reinforcing our commitment to delivering advanced solutions across critical sectors, including power, automotive, space, aerospace, engineering, education, and research & development.

A new Calibration Lab has been set up in Pune, with the required instrumentation procured; the process to secure NABL accreditation is currently underway. Action has also been initiated to set up a new Calibration Lab in Delhi at a new location, with further plans proposed to establish two more Calibration Labs & Technical Centers in Bangalore and Hyderabad.

Strategic Developments

During the year under review, the Company completed the sale of its 100% shareholding in its wholly owned subsidiary, namely JECL Engineering Limited, resulting in the divestment of the Material Handling Equipment business. The Company also exited its investment in its joint venture, Suryavayu Renewable and Energy Solutions Private Limited.

Another key strategic initiative is the monetisation of the Companys Thane land. We are progressing with the development of an IT/ITES Business Park on this property, which is expected to unlock substantial value over the coming years.

Reflections

FY 2025-26 was a year of directional progress for EPD, anchored by several significant business wins and steady growth. Contributions flowed in strongly from across our core sectors —Power, Space, Aerospace, Automotive, and Engineering-reinforcing momentum across all business verticals.

Business from new and emerging verticals-namely Semiconductor manufacturers, EMS and Solar PV companies-also started contributing to the performance during the year. Solar, in particular, stands out as a segment with significant opportunity across India, offering excellent potential for sustained growth in the years ahead.

Various projects and programmers across Space, Defense, and Aerospace are poised for rapid growth, driven by an increasing mix of private participation alongside government and public-partnership-based initiatives. The Aviation MRO (Maintenance, Repair, and Overhaul) sector is another key focus area for growth. EPD is well-positioned to capture this growing opportunity, backed by its expanding principal portfolio, strengthened testing capabilities, and well-rounded customer relationships across these priority sectors.

A growing focus on modernization and asset management among power generation, transmission, and distribution customers presents significant opportunities for both electrical test & measurement instrument sales and technical services.

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 decreased against last years revenue. Profit before tax has decreased by -3.53% against last year due to cost optimization.

Operational Review:

During the year, revenue has decreased from Rs.10,751 lakhs to Rs.6,607 lakhs. Profit before tax has decreased to -3.53% in FY26 against 11% in FY25.

Financial Review:

Particulars	FY25-26	FY24-25
Revenue (Rs. in lacs)	6,607	10,751
Profit/Loss before tax (Rs. in lacs)	(-233)	1,129
Profit before tax (%)	-3.53%	11%

Engineering Products Division (EPD)

EPDs revenue increased by 22.39% in FY26. Our expected orders were on time due to proper movement.

Operational Review:

During the year, revenue increased by 22.39%. Profit before tax has decreased to 13% in FY 26 against 16% in FY25.

Financial Review:

Particulars	FY25-26	FY24-25
Revenue (Rs. in lacs)	13,440	10,982
Profit/Loss before tax (Rs. in lacs)	1,705	1,801
Profit before tax (%)	13%	16%

D. Outlook

Defense Sector Developments: The Indian defence sector continues to witness strong growth, driven by the Governments focus on Aatmanirbhar Bharat, indigenisation and higher defence spending. The Government has set a target of achieving Rs.3 lakh crore in defence production and Rs.50,000 crore in defence exports by 2029. Increasing domestic procurement and modernisation of the armed forces are expected to create sustained opportunities for Indian engineering and manufacturing companies.

Power Sector growth: With per-capita demand potentially to double by 2035, and a 500GW 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, EMS, Semiconductors, 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.

E. 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 Comprehensive, risk-based internal audit program continuously verifies the sufficiency and efficacy of these controls.

F. Material developments in Human Resources/Industrial Relations front, including number of people employed.

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 106 permanent employees as of 31st March 2026.

G. 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 2025-26	FY 2024-25	Change YoY
Debtors Turnover Ratio	2.49	3.24	-23.15%
Inventory Turnover Ratio	50.22	25.44	97.41%
Interest Coverage Ratio	12.47	22.99	19.86%
Current Ratio	4.13	1.68	145.83%
Debt Equity Ratio	0.02	0.04	-58.68%
Net Profit Margin %	15.17	7.40	105%
Return on Net worth %	25.05	30.08	-13.90%

Inventory Turnover Ratio - Increase in inventory turnover ratio is due to increase in sales and decrease in inventory in FY 25-26.

Debt Equity Ratio - Decrease in debt equity ratio is due to decrease in debt from Rs.360 lacs to Rs.264 lacs in FY 25-26

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.

H. 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 of Directors
	Josts Engineering Company Limited
	Sd/-
	Jai Prakash Agarwal
Date: 30th July, 2026	Chairman & Whole Time Director
Place: Mumbai	DIN: 00242232