Broker’s Call: Torrent Power (Neutral)
Motilal Oswal Research
Torrent Power (TPL) has been given a Neutral rating with a SoTP-based TP of ₹1,270. The company operates in Gujarat's major cities, Dadra & Nagar Haveli/Daman & Diu, and has franchisee operations in a combined area of 3,057 sq km. TPL aims to increase its renewable energy portfolio to around 6.3 GW by the end of FY29, up from the approximately 2.1 GW currently operational.
The company plans to commission 1.2 GW in FY27 and 1.4-1.6 GW in FY28. In FY26, transmission and distribution contributed to 62% of EBITDA, while the licenced distribution division posted a 2.3% distribution loss and achieved a power availability of 99.9%. TPL's distribution loss is notably lower than that of Tata Power (5-19% in Delhi/Odisha), Adani Energy (around 4%), and CESC (6-8% in Kolkata, Noida, and Chandigarh).
The company forecasts a CAGR of 17% in EBITDA and 7% in APAT from FY26-29E. An estimated 37% of FY29E EBITDA will stem from the renewable energy business, with contracted generation capacity expected to rise from 1.8 GW as of Q1FY27-end to 4.5 GW by FY29-end. TPL is currently trading at a FY27E EV/EBITDA of 13.6x, which is higher than its historical one-year forward average of 8.4x. TPL's EBITDA CAGR of 18% over FY26-28E is in contrast to 25% for JSW Energy and 27% for Tata Power.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
