Torrent Power

Stock have seen good correction post poor Q1 results. Power companies are still suffering from power theft. In the recent correction, Axis seems to have increased some more position in this stock. Also the stock has shown increased delivery % in this month.

Stock has good support at 170 level, however seeing the market softness I believe some more softness in the price can be seen if market shows some signs of weakness. Will eagerly await for 150 level to add more.

Disclosure - Current exposure is 0.75% of my portfolio.

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Hi Hitesh - Could this be the trigger which torrent needs, its an article from Oct that they are inviting tenders, the gas supply will start from April 2017.

Hi Dhwanil Sir - if we are to compare JSW Energy with Torrent Power, would that make sense? In terms of how integrated their ops are / presence across state / underlying energy needs behind installed capacity etc

Thanks

Hi, so after reading through their latest Annual Report, this is what Ive come up with.

In their MDA, management states that theyve come to a settlement with PLNG for storage and regasification for 7 cargoes at their terminal at Dahej. Now, would this mean that the DGEN and UNSOGEN Plants start receiving gas again?

attached are the AR Notes

Torrent Power.docx (6.2 KB)

Ambit in their report state that fall in intrnational gas prices have led to SUGEN plant generating 75% PLF for Q1FY18. Now Torrent could use their storage at petronet’s terminal to import gas from international market and use it in their UNSOGEN Plant as low gas prices means that the GERC would then be willing to sign a PPA for the 382Mw UNSOGEN Plant.
But on the flipside, Wind tariffs have now moved on from FIT tariffs to competitive bidding. till now, torrent was recieving 4.65/unit for its electricity generated. with tariffs now being determined throgh competitive bidding, this would mean lower realizations and hence lower RoE for their renewable projects. this is a risk. the last round of bidding led to price discovery of 3.46/Unit.

Any views on this?

This thread has gone dry since almost 2 years. Meanwhile the stock has hit a 5 year high and heading towards life highs. Time to add? I was also searching for a thread on Adani Power but found none. Are power stocks the new growth story?

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Torrent Power seems to be a multibagger with a long runway for growth.

By far it has the best balance sheet, management and capital allocation track record in the sector.

Privatisation of electricity distribution will be great opportunity for this company to grow while structurally improving it’s ROE.

I expect demand supply mismatch in electricity to emerge in the next 2 years and therefore even merchant power capacities to earn great returns

Expect this company to have an exciting decade ahead

Earnestly request views of group members

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What is the opinion on the future prospects of Torrent Power v/s Tata power.

Torrent Power Q1 FY’25 Analysis: Key takeaways!!

Torrent Power reported a strong quarter with PBT increasing 85% year-over-year to Rs. 1,315 crores. The company’s performance was primarily driven by substantial gains from merchant power sales and LNG trading. The management expressed optimism about the favorable demand-supply dynamics in the electricity market, which is benefiting generators like Torrent Power.

Strategic Initiatives:

  1. Renewable Energy Expansion: Torrent Power is aggressively expanding its renewable energy portfolio with 3 GW of projects in the pipeline, including solar, wind, and hybrid projects.
  2. Transmission Projects: The company is developing two transmission projects - Khavda and Solapur - to diversify its business mix.
  3. Green Hydrogen: Torrent Power is venturing into green hydrogen with a pilot project for CNG blending and has secured an allocation of 18 KTPA under the SECI PLI scheme.
  4. Pump Storage Hydro: The company has identified sites with 8.4 GW potential for pump storage hydro projects in Maharashtra and Uttar Pradesh.

Trends and Themes:

  1. Increasing focus on renewable energy and green hydrogen
  2. Diversification into transmission projects
  3. Leveraging merchant power opportunities in a favorable market

Industry Tailwinds:

  1. Strong electricity demand growth (6-7% in distribution areas)
  2. Limited investment in thermal capacity, creating opportunities for existing players
  3. Moderation in global LNG prices, improving profitability for gas-based power plants

Industry Headwinds:

  1. Regulatory uncertainties around merchant power sales
  2. Potential volatility in LNG prices
  3. Increasing competition in renewable energy auctions

Analyst Concerns and Management Response:

  1. Sustainability of merchant power gains: Management highlighted that opportunities exist in summer and pre-winter months, but declined to provide specific guidance.
  2. LNG procurement strategy: The company is evaluating long-term contracts while maintaining flexibility for merchant operations.
  3. Renewable energy project delays: Management assured that project timelines are linked to PPA signing, mitigating execution risks.

Competitive Landscape:

Torrent Power faces competition from other large power generators and renewable energy developers. However, its diversified portfolio and strong balance sheet position it well in the market.

Guidance and Outlook:

The management expressed confidence in continued growth driven by renewable capacity addition, merchant power opportunities, and expansion into new areas like green hydrogen and pump storage hydro.

Capital Allocation Strategy:

The company plans to invest Rs. 20,000 crores over the next 3-4 years, primarily in renewable energy and transmission projects. Additionally, it is open to acquiring quality thermal assets at reasonable valuations.

Opportunities & Risks:

Opportunities:

  1. Expansion in renewable energy and green hydrogen
  2. Merchant power sales during peak demand periods
  3. Potential acquisitions in the thermal power sector

Risks:

  1. Regulatory changes affecting merchant power sales
  2. Execution risks in large renewable and hydro projects
  3. Volatility in LNG prices impacting gas-based power plant profitability

Regulatory Environment:

The company is navigating various regulatory frameworks, including Section 11 directives for power sales, renewable energy auctions, and emerging regulations for green hydrogen.

Customer Sentiment:

Strong demand growth in distribution areas (6-7%) indicates positive customer sentiment and economic activity in Torrent Power’s service areas.

Top 3 Takeaways:

  1. Exceptional growth in merchant power sales driving near-term profitability
  2. Aggressive renewable energy expansion with 3 GW pipeline
  3. Strategic diversification into green hydrogen and pump storage hydro projects
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Support for Green Energy Surges While Developers Struggle with Grid Delays.

Green Energy Receives $386 Billion Funding, But Can Grid Access Issues Be Solved?


India’s journey towards a greener and more sustainable energy future is making significant advancements, supported by large-scale investments, ambitious projects, and favorable policies along with various challenges and concerns.
Let us demystify it understand it.

Two major renewable energy conglomerates Adani and Torrent, both are actively engaged in the business of power generation through solar, wind and hydro.

Adani New Industries Limited

Adani New Industries Limited (ANIL) the wholly owned subsidiary of Adani enterprise Limited have heavily invested in various projects. Let us find about it’s Green energy ambitions.

  • 10 GW solar manufacturing plant
  • 5 GW wind turbine manufacturing plant
  • 5 GW Electrolyser manufacturing plant
  • 10 GW green hydrogen production facility in which Hydrogen capacity is 0.5 million metric tons per annum (MMTPA) and ammonia production is 2.8 million metric tons per annum (MMTPA).

Green Hydrogen, which is the next best alternative to traditional fuels is highly significant. Adani’s 0.5 MMTPA capacity for green hydrogen and 2.8 MMTPA for green ammonia will not only help reduce India’s carbon footprint but could also make the country a major exporter of green energy products.
This ambitious initiative aims to position Adani New Industries Limited at the forefront of India’s renewable energy push, with an eye toward both domestic consumption and export markets.

Torrent Power Limited

Torrent Power has also made substantial commitments to renewable energy development. In a regulatory filing, the company announced investments totaling ₹64,000 crore ($7.7 billion USD) for integrating renewable energy. This investment has the potential to create 26,000 jobs directly and indirectly.
The ‘Shapath Patra’ ie. Affidavit which was submitted to the Government by the Company accommodated some of the commitments which are mentioned below

  • 10 GW of Installed Renewable Energy Capacity by 2030
    The investments that are made for this is around 57,000 crores . A MoU has been signed with the Gujarat Government to execute a 5 GW solar, wind, or hybrid project in Dwarka district.
  • Green Ammonia Production Facility
    Investments of around 7,200 crores is pledged for the capacity of 100,000 kilotons per annum (KTPA).

This focus on green ammonia is aligned with global trends, as ammonia is a crucial ingredient for sustainable energy systems and a key part of the hydrogen economy.

Government Support

India’s green energy efforts have not gone unnoticed by financial institutions. REC , a state-owned power sector lender, has pledged ₹6 lakh crore for renewable energy projects, with additional support from IREDA and the State Bank of India , each committing ₹5 lakh crore .

Such financial support is pivotal in pushing renewable energy initiatives, ensuring that companies like Adani and Torrent Power have the resources to carry out their plans. Funding is not only the key as infrastructure and supply chain hurdles also needs to be taken in to consideration.

Major Challenge

As promising as these investments are, one of the most pressing challenges for India’s renewable energy sector is the lack of adequate grid access and transmission infrastructure . A surge in global demand for high-voltage direct current (HVDC) transformers, essential for integrating renewable energy into power grids, is causing significant delays for developers. In simple terms HVDC is technology that efficiently transmits electricity over long distances using direct current, reducing power loss compared to traditional alternating current (AC).

According to industry insights, transformer lead times have increased dramatically, from 50 weeks in 2021 to 120 weeks in 2024 , creating a bottleneck in scaling renewable energy projects. The availability of transformers, land, and legal clearances are further stalling the development of transmission infrastructure, especially in key states like Rajasthan and Gujarat . These delays could potentially derail the government’s target of adding over 50 GW of renewable energy capacity annually to meet its 500 GW target by 2030 .

Another issue is that, the Power Grid Corporation of India (PGCIL) is constrained by a mandate to source transformers domestically, requiring at least 60% local value addition , due to which the production of new transformers have been slowed down, which in turn disrupts the supply chain.

Conclusion

India’s renewable energy sector stands at a crossroads, with massive investments and government backing on one side, and significant infrastructure and supply chain hurdles on the other. Companies like Adani New Industries Limited and Torrent Power are leading the charge in green hydrogen, solar, and wind energy projects, but they, along with others in the industry, must navigate the complexities of grid access delays and equipment shortages.

Meeting India’s ambitious target of 500 GW of renewable energy by 2030 will require not only financial resources but also innovative solutions to infrastructural bottlenecks. The government’s role in creating a more enabling environment, coupled with strategic industry responses, will ultimately determine whether India can lead the world in green energy while maintaining a sustainable and balanced approach to growth.

Do share your thoughts and Views.

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Torrent Power; Torrent Green Energy Pvt Ltd (TGEPL) has established a new wholly-owned subsidiary, Torrent Urja 37 Pvt Ltd, which received its Certificate of Incorporation on January 20, 2025

How much positive is this ? Any idea ?