EPL cash falls Rs 21 crore as capex, working capital rise

EPL Limited’s cash and cash equivalents fell Rs 21 crore in the half year ended 30 September 2026 to Rs 176 crore, as Rs 293.6 crore of net working-capital absorption and Rs 315 crore of capital spending outweighed Rs 247.7 crore of operating cash generation.

Why did EPL’s cash balance decline in the first half?

EPL’s cash balance declined because operating and financing inflows did not cover its investing outflow in the half year ended 30 September 2026. Net cash from operating activities was Rs 247.7 crore, investing activities used Rs 308.8 crore, and financing activities generated Rs 40.1 crore, resulting in a Rs 21 crore fall in cash and cash equivalents.

That compares with a Rs 11.8 crore increase in cash and cash equivalents in the corresponding half of 2025. Cash ended the September 2026 half at Rs 176 crore, down from Rs 197.3 crore at 31 March 2026, after a Rs 30 lakh exchange loss on translation of foreign-currency cash balances.

The lower cash balance came despite higher reported earnings. Profit before tax rose to Rs 280.9 crore from Rs 258.2 crore in the prior-year half, while net profit after tax increased to Rs 211.5 crore from Rs 207.5 crore. The cash-flow movement therefore reflects investment and working-capital requirements rather than a decline in first-half profit.

How much working capital did EPL absorb?

EPL’s working-capital movements absorbed a net Rs 293.6 crore of cash in the first half, compared with Rs 166.1 crore in the corresponding 2025 period. Trade receivables and other assets consumed Rs 274.8 crore, inventories consumed Rs 263.4 crore, and higher trade payables and other liabilities provided an offsetting Rs 244.6 crore.

The year-on-year change was driven by larger outflows into inventories and receivables. Inventory cash absorption rose by Rs 143.6 crore from Rs 119.8 crore, while the receivables-and-other-assets outflow increased by Rs 122.1 crore from Rs 152.7 crore. Cash generated from operations, before direct taxes, consequently fell to Rs 292.4 crore from Rs 346.5 crore.

Balance-sheet figures show the increase in current operating assets at 30 September 2026. Inventories rose Rs 259 crore from 31 March 2026 to Rs 1,185.8 crore, while trade receivables rose Rs 215.4 crore to Rs 1,086.4 crore. Other current assets increased Rs 41.7 crore to Rs 137 crore over the same six months.

Higher supplier-related balances partly funded the asset build-up. Trade payables to creditors other than micro and small enterprises increased to Rs 943.2 crore at 30 September 2026 from Rs 762.7 crore at 31 March 2026. The increase of Rs 180.5 crore was smaller than the combined Rs 474.4 crore increase in inventories and trade receivables.

EPL’s disclosed turnover measures also declined. Trade receivables turnover was 5.12 times at 30 September 2026, versus 6.07 times at 31 March 2026 and 5.65 times a year earlier. Inventory turnover was 4.72 times, compared with 5.78 times at March 2026 and 5.42 times at September 2025, while the current ratio, calculated as current assets divided by current liabilities, was 1.47 times against 1.56 times at March 2026.

What drove EPL’s higher capital spending?

EPL spent Rs 315 crore on acquiring property, plant and equipment and intangible assets in the first half, up Rs 146.9 crore from Rs 168.1 crore in the corresponding prior-year period. The cash-flow line includes capital work-in-progress, intangible assets under development, capital advances and capital creditors.

This increase was the main component of the investing outflow, which rose to Rs 308.8 crore from Rs 148.8 crore a year earlier. Asset-sale proceeds were Rs 1.4 crore in the 2026 half, compared with Rs 1.2 crore in the 2025 half, and did not materially offset the acquisition spending.

Property, plant and equipment stood at Rs 2,085.6 crore at 30 September 2026, compared with Rs 2,007.7 crore at 31 March 2026. Capital work-in-progress rose to Rs 188.1 crore from Rs 148.1 crore, and intangible assets under development increased to Rs 12.1 crore from Rs 9.3 crore. The filing does not identify individual projects or give completion dates for these additions.

Mutual-fund transactions produced a smaller net investing inflow than in the prior year. EPL purchased Rs 453 crore of current mutual-fund investments and sold Rs 457.2 crore, giving a net Rs 4.2 crore inflow. In the corresponding 2025 half, purchases of Rs 587 crore and sales of Rs 604.8 crore produced a Rs 17.8 crore inflow.

How did EPL fund its cash requirement and what changed in debt?

EPL generated Rs 40.1 crore from financing activities in the first half, reversing a Rs 135.9 crore outflow in the corresponding 2025 period. Short-term borrowings supplied a net Rs 133.6 crore, comprising Rs 866.6 crore of proceeds and Rs 733 crore of repayments.

Long-term borrowing flows were a net Rs 7.5 crore outflow, as EPL borrowed Rs 53.4 crore and repaid Rs 60.9 crore. Other financing uses included Rs 36.8 crore of lease-principal payments, Rs 9.5 crore of interest on lease liabilities, Rs 49.3 crore of interest on borrowings and Rs 10 lakh of dividends paid to owners of the holding company.

Current borrowings increased to Rs 496.5 crore at 30 September 2026 from Rs 328.8 crore at 31 March 2026. Non-current borrowings decreased to Rs 341.7 crore from Rs 380.2 crore, leaving total borrowings Rs 129.2 crore higher at Rs 838.2 crore.

Total equity rose to Rs 3,151.4 crore at 30 September 2026 from Rs 2,866.4 crore at 31 March 2026. EPL disclosed a debt-equity ratio of 0.27 times at September 2026, compared with 0.25 times at March 2026. It also received Rs 9.7 crore from equity-share issues and allotted 523,514 shares of face value Rs 2 each to stock-option grantees during the September quarter.

Conclusion

EPL’s first-half cash outflow followed a divergence between reported earnings and cash conversion. Net profit after tax increased Rs 4 crore year on year to Rs 211.5 crore, but operating cash flow declined Rs 48.8 crore to Rs 247.7 crore as inventories, receivables and other assets used more cash. Capital spending of Rs 315 crore then exceeded operating cash generation, leaving cash Rs 21 crore lower despite net financing inflows.

The next cash-flow statements will show whether inventory and trade-receivable balances, which stood at Rs 1,185.8 crore and Rs 1,086.4 crore respectively at 30 September 2026, moderate relative to revenue. EPL has not disclosed a capital-spending target, individual project timetable or completion schedule, leaving future reported cash generation and investment outflows as the relevant measures to watch.