Torrent Power Limited

Torrent Power reported a Q4 FY25 PBT of Rs. 619 crores, a marginal increase from Rs. 617 crores in the prior year. After adjusting for the Rs. 35 crores negative impact from the 420 MW TPL solar project's stabilization phase, the adjusted PBT stood at Rs. 654 crores, representing a 6% YoY growth. The distribution business was a key driver, improving its contribution by Rs. 112 crores due to higher volumes and increased ROE. However, this positive impact was partially offset by an Rs. 88 crores reduction in contribution from merchant power and LNG sales, primarily due to elevated LNG prices ranging from $12 to $17.

As of March 31, 2025, Torrent Power's aggregate installed generation capacity reached 4.8 GW, comprising 2.7 GW gas, 1.7 GW renewable, and 362 MW coal-based capacity. The company commissioned 84 MWp of its 367 MWp MSEDCL solar project during the quarter. The future pipeline is robust, including 3.1 GWp of renewable capacities, 3 GW of pumped storage capacities, and two transmission projects located at Khavda and Solapur. Additionally, the company secured Letters of Award (LoA) from NVVN for 1150 MW from DGEN and 150 MW from SUGEN plants, with operations scheduled from March 16 to October 15.

For FY25, Torrent Power incurred a total CAPEX of approximately Rs. 4,400 crores, with Rs. 1,900 crores allocated to license distribution, franchisees, and transmission, and Rs. 2,500 crores for renewables. Looking ahead to FY26, the company plans a CAPEX of Rs. 2,000 crores for distribution, including Rs. 1,750 crores for license distribution and Rs. 250 crores for franchisee distribution. An additional Rs. 900-1000 crores is projected for transmission CAPEX in FY26. The company's balance sheet remains strong, supported by a Rs. 3,500 crores equity raise through QIP, resulting in a net debt to equity ratio of 0.40x and a net debt to EBITDA of 1.41x.

Torrent Power is actively developing a 2 GW pumped storage hydro project in Maharashtra under a 40-year Energy Storage Facility Agreement with MSEDCL. This project is estimated to take 4-5 years for completion, with the commissioning timeline having commenced from the PPA signing date. The company is currently focused on obtaining various statutory approvals, preparing the Detailed Project Report (DPR), and executing land acquisition processes. While initial CAPEX for land and equipment will begin in the current fiscal year, the majority of the capital expenditure for this project is anticipated over the next two years (FY26-FY28).

The company continues to demonstrate operational excellence, achieving a low distribution loss of 2.34% in its licensed distribution business. In the Agra franchisee area, AT&C losses have reached a historical low of 6.94%, a significant improvement from 58.77% in 2010. Management noted that while power demand was somewhat impacted by weather in April and May, the NVVN tenders are effectively facilitating off-take during peak periods. Profitability from the current NVVN tenders is expected to be largely similar to the previous year, with any slight downward bias potentially offset by lower gas buying costs.

In addition to its focus on renewables and pumped storage projects, Torrent Power is actively evaluating opportunities in the thermal power sector. Management confirmed that they are looking at both brownfield and greenfield thermal projects. This indicates a strategic approach to potentially expand and diversify its generation portfolio, although no specific commitments have been made at this stage.