Torrent Power Q1FY26 PAT Drops 26% YoY to ₹742 Cr Amid Lower Merchant Gains

Ahmedabad, August 5, 2025 – Torrent Power Ltd (NSE: TORNTPOWER, BSE: 532779) reported a 26% year-on-year decline in consolidated net profit to ₹742 crore for Q1FY26, compared to ₹996 crore in the same quarter last year. The drop was largely attributed to subdued merchant power gains due to the early onset of monsoon and elevated gas prices impacting gas-based generation.

Financial Snapshot: Q1FY26 vs Q1FY25

Torrent Power’s revenue from operations dropped 12% year-on-year in Q1FY26, largely driven by a fall in merchant sales. This weakness flowed through to operating performance, with EBITDA declining 18%, reflecting softer contribution margins across segments.

Profit before tax fell 25%, while net profit contracted 26% year-on-year. Total comprehensive income mirrored the trend. However, finance and depreciation costs remained stable, cushioning further erosion in margins.

Segment Highlights

Generation Performance

Torrent Power’s gas-based generation performance weakened due to subdued merchant realizations, with plants like DGEN and Unosugen recording lower plant load factors year-on-year. In contrast, renewables provided a cushion, wind PLF rose over 31%, and solar improved to 22.0%, driven by better resource availability and improved capacity utilization.

• Sugen: 60.4% (vs 59.7% YoY)

• Unosugen: 43.4% (vs 50.7% YoY)

• DGEN: 31.9% (vs 55.6% YoY)

• Wind PLF: Improved to 31.6% from 28.3%

• Solar PLF: Rose to 22.0% from 19.6%

Distribution

Torrent Power maintained strong operational efficiency across its licensed distribution areas, recording some of the lowest T&D losses in the country. Losses stood at just 3.1% in Ahmedabad and 3.4% in Surat, while DNH and D&D achieved a low 1.7%. Agra and Bhiwandi also showed notable improvements, reflecting effective control and network management.

Strategic Projects & Capacity Expansion

Torrent Power is aggressively expanding its renewable portfolio, aiming to scale up to ~4.9 GW from the current ~1.8 GW through 3.3 GW of under-development solar and wind projects. Key highlights:

• ₹21,380 crore investment across SECI, MSEDCL, TPL-D, and C&I projects

• A significant 2,000 MW/16,000 MWh pumped storage hydro project planned in Raigad, Maharashtra

In transmission, two major projects are under execution:

• Khavda RE Evacuation (Gujarat): ₹800 Cr project with 60 km 400 kV lines

• Solapur Project (Maharashtra): ₹500 Cr, 44 km 400 kV line, secured via TBCB

Management Commentary

“Despite challenges in the quarter, our renewable assets delivered strong performance. The distribution business saw improved efficiency, and we remain on track with our ambitious growth plans in green energy and grid infrastructure,” the company said in its Q1FY26 investor note.

Balance Sheet Strength

Torrent Power maintained a strong balance sheet in FY25, with net debt to EBITDA at 1.41x, highlighting low financial risk. Its return on equity stood at over 18%, supported by stable earnings and disciplined capital allocation. Overall, the company demonstrated sound leverage and operational efficiency across its power business.

Market Snapshot

As of 4:00 PM IST on August 5, 2025, Torrent Power closed at ₹1,317.90, up 0.44% from the previous close. The stock moved between ₹1,280.10 and ₹1,325.30 intraday, with VWAP at ₹1,304.48. Total turnover stood at ₹89.72 crore.

Outlook

Lower merchant gains and weaker gas-based generation hit quarterly earnings, but consistent distribution efficiency and rising renewable capacity offer offsetting support. The market may track execution on large green projects and margin recovery amid volatile input costs in the near term.

Company Overview

Torrent Power is an integrated power utility operating across generation, transmission, distribution, and power‑cable manufacturing in India. It serves over 4.1 million customers across Gujarat, Maharashtra, Uttar Pradesh, and Union Territories. The company combines coal, gas, and renewable plants (~4,328 MW) with one of the lowest T&D losses in the country.

REF:https://nsearchives.nseindia.com/corporate/TORNTPOWER_05082025170824_InvestorPresentation.pdf

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