Jullundur Motor Agency Delhi Ltd Management Discussions

The statements in this Report describing the Companys objectives, projections, estimates, expectations may be considered to be forward looking statements which the management believes are true to the best of its knowledge at the time of preparation, within the meaning of applicable law, rules and regulations. Actual results may differ materially from those expressed or implied. The Company assumes no responsibility to amend, modify or revise any forward looking statements on the basis of any subsequent development, information or events.

OVERVIEW

The Company is engaged in the business of distribution of auto spares parts across India through network of branches since 1976. The Company also has a rake long association among management persons who are well experienced in oil & lubricants, filters etc. Most of Companys suppliers are original equipment manufacturers (OEMs) who are supplying to vehicle manufacturers.

The Company operates in a single segment viz., distribution of auto parts.

INDUSTRIAL STRUCTURE AND DEVELOPMENT OVERVIEW

With the GDP expected to grow in Financial Year 2026-2027 there might be continued movement in the commercial vehicle segment.

Given the increase in new vehicle pricing it is expected that this would lead to continued use of older vehicles.

FY 2025-2026 was a financial year of two halves; the second half (post the implementation of GST 2.0) was significantly better than the first half. The same reflection can be seen in the financial results. There was increased competition in the market but we were able to maintain the gross margins.

Raw material pricing was erratic due to the global disturbances toward the later part of the year which shall impact 2026-27 sales. The inflationary pressure on the product pricing will further put pressure on the parts dealers ability to hold inventory.

The beginning of the first quarter of FY 2026-27 looks encouraging, compared to last year due to the inventory holding policy and capacity of the Company. Gross Profit was under pressure last year and shall continue to be under pressure due to enhanced competition in the aftermarket. Raw material prices are expected to increase specifically in the fluids segment.

With the implementation of GST 2.0, GST on most products has reduced from 28% to 18%. Quality parts are now more affordable for the end consumer; therefore the share of quality parts should increase in the medium to long term in the Indian automotive aftermarket.

FINANCIAL REVIEW

The Company registered a turnover of 48,146.45 lakhs at a growth rate of 11.51% in FY. 2025-2026. The profit before tax was 3,209.96 lakhs increased by 17.07% as compared to 2,741.86 lakhs in last financial year. The Company is a debt free company. A chart containing the details of financial performance in past 7 years is appended with this Annual Report.

FUTURE PLANS & OUTLOOK

The Company is in the process of adding more products/lines in product mix and is focusing to open new outlets/sales units in potential tier-II & tier-III cities/towns across the country to cater to the areas which have remained uncovered so far. The Company will continue to invest in technology to help increase efficiency.

With the OEMs being more active in the aftermarket spares Gross Margins will continue to be under pressure. We see an opportunity for an increase in consumption of spare parts due to increased cost of purchase of new vehicles and we expect continued use of older vehicles.

With the increased investment in infrastructure vehicular movement is expected to increase which will lead to increase in sales of spare parts in the long term.

OPPORTUNITIES

The management of the Company expects that there would be an increase in demand on account of continued use of old vehicles. This will lead to an increase in requirement of quality auto parts both in respect of Commercial vehicles and passenger vehicles.

THREATS AND RISKS

Aftermarket demand of spare parts/auto components in secondary market is tilting towards Vehicle manufacturer branded aftermarket products due to aggressive posture shown by OEMs. Many additional layers are coming into the aftermarket (new entrants, re-expansion of product lines for existing players) thereby leading to increased competition. Working capital has increased considerably for the entire distribution chain, due to higher prices and larger range of products thereby affecting the cash flows in the market.

With the continuous improvement in technology and quality of parts, the replacement timeframe for aftermarket spares is only widening. With the improvement in roads and other infrastructure the wear and tear on the vehicle is also reduced, leading to high life expectancy of parts.

SUBSIDIARY AND ITS PERFORMANCE

As at 31st March, 2026, your Company has one material subsidiary Company i.e. JMA Marketing Limited, which is engaged in the business of distribution of auto spare parts in different regions of India. During the year under review, the sales turnover of the material subsidiary Company was ? 14,043.51 Lakhs and it managed to earn Net Profits (after tax) of ? 734.14 Lakhs. This is on account of the Company has bagged the supply rights of one of the key products in the Western region of the country.

KEY FINANCIAL RATIOS

During the year under review, there was no significant change (i.e. change of 25% or more as compared to the immediately previous financial year) in the key financial ratios except in the case of Trade payables turnover ratio which is on account of reduction in average trade payables. Key financial ratios, along with detailed explanations thereof are given in notes to accounts of annual audited financial statements forming part of this Annual Report.

RETURN ON EQUITY

There is a slight increase in Return on Equity from 9.93% to 10.99% as compared to last fiscal year on account of growth in the net profits of the Company.

INTERNAL CONTROL SYSTEMS

The Company has an adequate and effective control system to commensurate with its size and complexity. The internal control system is supplemented through an extensive internal audit program and periodic review by management and audit committee.

DISCLOSURE OF ACCOUNTING TREATMENT

In the preparation of the financial statements, the Company has followed the Indian Accounting Standard (IND AS). The material accounting policies which are consistently applied are set out in the Notes to the Accounts.

RISK MANAGEMENT

The Company monitors and reviews the risk management activities on regular basis. There are checks and balances which are embedded in the ERP system.

CORPORATE SOCIAL RESPONSIBILITY

The Company is committed to make contribution to the society as part of our social initiatives. Special focus made on the education to overcome the illiteracy in small cities and villages. The Company is contributing to different NGOs and organizations which are progressively working on education programs and women empowerment in urban slums, rural and backward areas of the country, contributing towards welfare of abandoned senior citizens and disabled people and Infrastructure and Energy Support for Educational Institutions.

HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONS

The Company is extensively focused on leadership development and employee engagement initiatives. During the period under review, multi-product and sales training program were conducted across the Country. Employees were encouraged to participate in sports and other fitness related programmes to promote individual wellness and to achieve a sense of balanced life. Total Employees on Payroll of the Company are 550.