Torrent Power surges 19%, hits new high on robust June quarter earnings

Torrent Power share price today: In the past one year, the market price of Torrent Power has zoomed 161 per cent

Torrent Power share price record high: Shares of Torrent Power hit a new high of Rs 1,899, surging 18.7 per cent on the BSE in Wednesday’s intraday trade amid heavy volumes. This comes after Torrent Power reported 87 per cent year-on-year (Y-o-Y) jump in profit after tax (PAT) at Rs 532 crore in June quarter (Q1FY25), on healthy operational performance.

The company said the major reasons for higher PAT was increase in contribution from merchant power sales in gas-based power plants and increase in contribution from licensed distribution businesses.

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The stock of the integrated power utility company has surpassed its previous high of Rs 1,687.75 touched on July 18, 2024. In the past one year, the Torrent Power share price has more-than-doubled as it zoomed 161 per cent. In comparison, the BSE Sensex rallied nearly 23 per cent.

At 11:17 AM, Torrent Power stock was trading 16.34 per cent higher at Rs 1,861, as against 0.22 per cent gain in the benchmark index. Average trading volume on the counter nearly tripled with a combined 8.65 million shares changing hands on the NSE and BSE till the time of writing of this report.

In Q1FY25, Torrent Power’s revenue from operations grew 23 per cent Y-o-Y at Rs 9,034 crore. Earnings before interest, taxes, depreciation, and amortisation (Ebitda) rose 52 per cent Y-o-Y at Rs 1,934 crore; margin improved 407bps to 21.4 per cent from 17.3 per cent in Q1FY24.

Torrent Power is an integrated power utility engaged in the businesses of electricity generation, transmission and distribution with operations spread across the states of Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Uttar Pradesh, Haryana, Telangana, Andhra Pradesh, Tamil Nadu and Union Territory (UT) of Dadra & Nagar Haveli and Daman & Diu.

Considering the projected electricity demand compared to the current power supply position, thermal power plants are expected to operate at higher Plant Load Factor (PLF). Gas-based plants play a crucial role in balancing renewable energy intermittency and flexibility to meet peak demand. With government’s strategic push toward a ‘gas-based economy’; despite geopolitical tensions affecting gas prices, the medium to long-term outlook for gas-based plants remains positive. Additionally, range-bound liquefied natural gas (LNG) prices further support improved PLFs.

Going forward, while share of renewable energy (RE) power (including hydro) would increase, coal will remain critical to serve overall demand. To achieve the climate change commitments, RE will remain the mainstay and is expected to meet significant incremental demand in the years to come, Torrent Power said in FY24 annual report.

The company is poised for a promising future in the renewable power and green energy business. The Government has announced ambitious targets for the clean energy segment together with a robust framework for growth to facilitate integration of higher share of renewables in the grid.

"The company already has ~1.2 GWp of operational and about 3 GWp under construction renewable capacity. The Company is actively exploring avenues, both organic and inorganic, within the renewable energy sector and is diligently working towards expanding its renewable portfolio to 5 GWp over the next few years," Torrent Power said.