Torrent Pharma benefited from high gas prices as its generation capacities were not utilised for distribution (owing to high energy costs) and it could sell the gas (fuel) in open market. However, after gas prices corrected in FY24, profit has remained muted largely due to reduced gas trading profit.
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ICICI Securities Report
Torrent Power Ltd. raised Rs 35 billion in FY25 by way of QIP. It added
528 MW of RE capacity,
won 2GW of PSP capacity.
It continued to report low distribution losses in its distribution area - resulting in superior return from its distribution portfolio. It reported an increase in Ebitda for FY25 due to increased merchant sales in Q1 FY25 from its open capacity.
It has again tied up for its gas-based power plants under short-term arrangements at attractive rates. As a result, we expect these merchant benefits to continue aiding profitability in FY26E.
With Rs 200 billion capex lined up for FY26–27 and most RE assets locked into long-term power purchase agreements, growth visibility remains firm beyond FY27.
Current valuations leave little room for upside. Maintain Reduce with SoTP-based revised target price of Rs 1,240 (earlier Rs 1,165).
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