Exide to fund EESL capex via internal accruals despite FY25 cashflow dip

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Battery major Exide Industries will rely predominantly on internal accruals to fund the remaining capex for Phase I of its lithium-ion cell manufacturing venture, even as its cash flow from operations dipped in FY25, a company official said.

The company reported cash flow of Rs 1,297.9 crore from operations in FY25, down from Rs 1,996.5 crore a year ago, largely due to a sharp rise in receivables and inventory, the official said.

Receivables rose to Rs 314 crore from just Rs 13 crore in FY24, while inventory levels more than doubled to Rs 578 crore, exerting pressure on working capital.

"The cash flow generation for FY25 was in line with expectations and has lowered mainly due to an increase in working capital, which we look at bringing back to an optimal level in the next 3-6 months. The operating cash flow (pre-working capital movement) in FY25 was, in fact, better than FY24 by approximately Rs 55 crore," the Exide official told PTI, declining to be quoted.

Exide, which invested around Rs 1,000 crore in its wholly owned subsidiary Exide Energy Solutions Ltd (EESL) during FY25, has infused an additional Rs 300 crore in April 2025.

This takes the total equity investment in EESL to Rs 3,602.23 crore, including amounts infused in the erstwhile merged entity EEPL, the official said.

Exide estimates a capex of Rs 5,000 crore in the first phase of the project that is slated to be commercialised in FY'26.

The company said its lithium cell manufacturing project is progressing steadily, with construction and equipment installation nearing completion.

To fund the remaining capex of around Rs 1,400 crore for Phase I, Exide will invest an additional Rs 1,200 crore into EESL through internal accruals.

"Exide in April decided to further invest up to Rs 1,200 crore in the equity capital of EESL. This will be done, in one or more tranches, through internal generation, and the rest of the requirement will be met by EESL through bridge loans "from time to time", the spokesperson said.

"As of now, we do not see the need for borrowing except for some bridge loans by EESL," the company stated on whether it will resort to debt after the fall in operating cash flows. Exide is a debt-free storage battery major.

During the JanuaryMarch quarter, Exide's EBITDA margin moderated, primarily due to rising input costs, including a sharp spike in antimony prices. Sequentially, EBITDA rose 4 per cent.

For the full fiscal year, EBITDA and profit-before-tax margins stood at 11.4 per cent and 8.7 per cent, respectively, compared to 11.7 per cent and 8.8 per cent a year ago.

Despite muted OEM and industrial demand, the company saw double-digit growth in the auto replacement, industrial UPS, and solar verticals, and expanded its presence in international markets.

Exide expects a pickup in demand going forward and aims to commercialise operations of the lithium cell project in FY26.