Geojit Financial Services research report on Torrent Power
Torrent Power Ltd. (TPL) is one of the leading power utility companies in India, with functions across generation, transmission, and distribution. It has operations spread across Gujarat, Maharashtra, UP, and Karnataka. TPL’s revenues grew by 23% YoY to Rs. 9,034cr. Margins expanded by 440bps enabling EBITDA growth of 57%YoY. PAT surged 87% YoY to Rs.996cr. TPL is currently developing two transmission projects, namely Khavda transmission project (project cost Rs.800cr.) and Solapur Transmission project (project cost Rs.470cr.). TPL plans to expand its renewables portfolio, with over 3.2GW of projects under pipeline. This, combined with the transmission projects, will see TPL invest close to Rs.20,000cr. in the next 3-4 years.
Outlook
We shift the valuation methodology from P/Bk to SOTP, valuing the new transmission and pumped storage projects on DCF and the green hydrogen project on a P/Bk basis. We arrive at a target of Rs.1,893, thereby upgrading our rating to “ACCUMULATE “ rating.
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