Torrent Power’s green energy push improves its earnings visibility
Subscribe to enjoy similar stories. Torrent Power Ltd’s stock has gained more than 10% this week after it announced the opening of its qualified institutional placement (QIP), for which it set the floor price at ₹1,555.75 a share. The stock also seems to be generating greater interest since the recent listing of NTPC Green Energy Ltd, which is up about 30% from its issue price so far.
With its strong financial position further bolstered by the proposed QIP, Torrent appears well-placed to make the most of domestic green energy demand. It is expanding its renewable energy (RE) capacity by 3 GW, in addition to the 0.3 GW commissioned in the September quarter (Q2FY25), which will raise the share of RE in its total generation capacity from 32% to 59%. Also read: Is the worst behind the home décor sector? These projects, to be commissioned by H1FY27, entail a total investment of more than ₹19,300 crore and will increase its installed capacity to 7.5 GW.
The anticipated investment implies a near doubling of its balance sheet during FY24-27. The company has entered into power purchase agreements and has secured land for most of the capacity under construction, providing higher certainty. “Torrent power is swiftly building renewable capacities along with first-mover in tying up large scale pumped hydro storage capacities and foraying into transmission projects.
We estimate these growth initiatives to result in significant growth going forward (FY24-30 CAGR of 11%/21%/25% in revenue/Ebitda/PAT)," said JM Financial Institutional Securities Ltd. Also read: Can Swiggy’s Instamart spice it up in quick commerce? Torrent is also exploring opportunities in other segments within green energy. It has identified sites to build 8.4 GW of
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