Jefferies On Torrent Power: Jefferies has retained its 'Buy' rating and Rs 1,780 target price, implying 37% upside, but the more interesting part of its latest assessment lies beyond the headline target.
The brokerage has not factored Torrent Power's planned 3 GW pumped storage project (PSP) addition into its FY29E–30E estimates, leaving potential upside if the projects materialise.
Jefferies analysts Lavina Quadros and Shirom Kapur, following the Jefferies India Forum 2026, expect Torrent Power to deliver 13% EBITDA CAGR over FY26–30E, led by a sharp increase in renewable energy earnings.
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A 3 GW Growth Option Sitting Outside The Model
Torrent Power currently has 2 GW of renewable energy capacity and is targeting 10 GW by 2030.
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Jefferies has already built 4.6 GW of RE additions into its FY26–30E estimates, of which around 3 GW is already at various stages of implementation, excluding C&I projects.
But the brokerage has excluded the potential 3 GW of PSP capacity from its forecasts.
That creates an additional growth option without being embedded in the current estimates — a factor Jefferies believes could provide upside.
The immediate constraint is infrastructure. Transmission availability is delaying commissioning timelines, although Jefferies says its estimates had already factored in such delays. Evacuation challenges are expected to persist in the near term.
Renewables Could Become The Earnings Accelerator
Jefferies expects Torrent Power's RE EBITDA to grow at a 36% CAGR between FY26 and FY30E.
The segment's contribution to revenue is expected to increase from 4% to 9%, while margins are forecast to remain steady at 82.5%.
Alongside a steady 5% EBITDA CAGR in transmission and distribution, this translates into 13% overall EBITDA CAGR and 10% PAT CAGR over FY26–30E.
The brokerage expects EBITDA and PAT to rise 1.6 times and 1.4 times, respectively, over the period as renewable capacity becomes operational.
Thermal Adds Another Leg
Torrent Power has acquired 1.4 GW of Nabha Power, which Jefferies has incorporated into estimates from 2HFY27E.
The plant is expected to account for 17% of capacity, 42% of units generated and 11% of EBITDA in FY28E.
The company is also developing a 1.6 GW thermal plant in Madhya Pradesh, with most of the land already in place and equipment ordered. The project is tied up with the MP discom for 25 years at a tariff of Rs 5.8 per unit, with management targeting commissioning in six to seven years.
Balance Sheet Leaves Room For Expansion
Jefferies expects reported ROE to remain around 12–13% through FY26–30E, supported by the company's distribution business, which contributes more than 60% of EBITDA and carries a 16%+ ROE profile.
Torrent Power's balance sheet also remains comfortable, with net debt-to-equity at 0.6x and net debt-to-EBITDA at 2.1x, below the typical 4–5x comfort range cited by rating agencies.
Jefferies values the company at 15x September 2028E EV/EBITDA to arrive at its Rs 1,780 target.
The key question is therefore not just how much renewable capacity Torrent Power can add, but how much of its future growth is still missing from current estimates — particularly the potential 3 GW PSP opportunity.
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