Torrent Power shares fall 4% as Morgan Stanley downgrades to 'equal-weight',

Torrent Power stock has struggled in 2025, falling nearly 12 percent year-to-date

Shares of Torrent Power slipped as much as 4.2 percent to touch an intraday low of Rs 1,292 on February 11 after international brokerage Morgan Stanley downgraded the stock to 'equal-weight' from 'overweight' and also slashed the target price following bleak growth prospects.

With the target price of Rs 1,413, analysts at Morgan Stanley forecast a marginal upside potential of just 4.8 percent from the last close on the National Stock Exchange. The previous target price assigned by the brokerage was Rs 2,026 per share.

Follow our LIVE blog for all the latest market updates

Despite the stock’s recent underperformance, Morgan Stanley remains optimistic about the power sector. The firm expects power demand to recover from Q2FY26, driven by industrial and consumer segments, attractive valuations given the recent correction led by a slowdown in demand.

Torrent Power's Q3 revenue from operations increased 2.1 percent year-on-year (YoY) to Rs 6,499 crore, while net profit surged 31 percent YoY to Rs 489 crore. At the operating level, EBITDA rose 6.5 percent YoY to Rs 1,111 crore in Q3FY25 while EBITDA margins expanded by 60 basis points (bps) YoY to 17 percent during the quarter.

Also read: Rupee rises most in over 2 years to reclaim 87 per dollar on likely RBI intervention

At the operating level, the company's EBITDA grew by 38 percent YoY to Rs 1,284 crore in Q3FY25 compared to Rs 1,098 crore in the year-ago period. The company stated that the major reasons for higher profit are an increase in contribution from gas-based power plants and gain on sale of non-current investments.

Read more: Bears gatecrash BSE SME IPO party after 20% correction from highs

Over the past 18 months, Morgan Stanley's view on Torrent Power has been mixed, alternating between "Overweight" and "Underweight." However, in September last year, the brokerage turned bullish, upgrading the stock to "Overweight" with a target price of Rs 2,268.

After a massive 60 percent surge in 2024, the stock has struggled in 2025, falling nearly 12 percent year-to-date and tumbling 33 percent from its October highs. At noon, shares of the company were trading at Rs 1,312, lower by 2.8 percent from the last close on the National Stock Exchange.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.