Result Analysis:  Torrent Power Ltd. (CMP: Rs.456.9) Result Update: Q3FY23

Torrent Power Limited is an integrated power utility company of the ₹ 23,500 Crs Torrent Group, and is one of the largest companies in the country’s power sector with highly efficient generation assets and presence across the entire power value chain of generation, transmission and distribution. It has a portfolio of coal based, gas based and renewable power plants with an aggregate generation capacity of 3879 MW. The Company distributes power to over 3.8 million customers annually in its distribution areas of Ahmedabad, Gandhinagar, Surat and Dahej SEZ and Dholera SIR (Gujarat), in Bhiwandi, Shil, Mumbra and Kalwa, Agra, and in Union Territory of Dadra & Nagar Haveli, Daman, and Diu.

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    Stock Details
    Market Cap. (Cr.) 21959
    Equity (Cr.) 480.62
    Face Value 10
    52 Wk. high/low 610 / 416
    BSE Code 532779
    Book Value (Rs.) 227.39
    Sector Power Generation & Distribution
    Key Ratios
    Debt-equity: 0.84
    ROCE (%): 12.21
    ROE (%): 8.73
    TTM EPS: 42.15
    P/BV: 2
    TTM P/E: 10.84

    Result Highlights:

    • Torrent Power reported robust growth in revenue with an increase of 71% on YoY basis to Rs.6,442.79 cr. in Q3FY23. Whereas company has clocked PAT of Rs.54 cr. in the Dec. quarter, a robust growth of 43.44% QoQ and 88% YoY.

    • EBITDA margin of the company has increased sequentially by 494 bps and showed a decline of 282 bps on YoY basis to 23.71%.

    • For 9MFY23 the company reported a robust growth in revenue of 87% on YoY basis to Rs.19,656.25 cr. and was able to clock in the PAT of Rs. 1,680.74 projecting a growth of 77.65% on YoY basis.
    • Generation declined across all gas-based stations due to unviable RLNG prices. However, it improved significantly across the solar based stations to 111mn units an increase of 118% on YoY basis, while remaining largely flat across the wind stations in Q2FY23 with marginal decrease of -1.1% on YoY basis to 270mn units.

    • T&D losses in Q3FY23 improved in Ahmedabad, Bhiwandi, Agra, and SMK to 5.6%, 11.0%, 11.4%, and 35.3% respectively from 6.1%, 13.1%, 13.1%, and 42.3% on YoY basis respectively, led by improved demand, consumer mix, and collections.

    • The management has also retained its guidance to scale up its RES capacity to 5GW by FY25-26E, from ~2GW now.

    • The company announced an interim dividend of ₹ 22 per equity share (including ₹ 13 per equity share as a special dividend).

    Financial Performance:

    Shareholding Pattern:

    Particulars %
    Promoters & Promoter Group 53.57%
    FIIs 6.92%
    DIIs 21.31%
    Public 6.75%
    Others 11.45%


    Torrent Power reported robust Q3FY23 results with growth in revenue of 71% and PAT of 88% despite increase in Finance Cost and tax expenses, this is mainly due to increase in contribution from existing licensed distribution businesses, improved performance and contribution from the operations of Union Territory of Dadra and Nagar Haveli and Daman and Diu (DNH & DD) which has been taken over from 1st April, 2022, increase in contribution from franchised distribution business due to reduction in T&D losses on account of continuous and sustained focus on Loss reduction activities, and Net gain from trading of LNG. The company is widely considered to be the leading power distributor in India and in its licensed areas in Gujarat has the distinction of having the lowest AT&C losses and best reliability indices in the country. For the nine months of FY23 Torrent Power has reported the earnings of Rs.34.71 and we expect the company to close the FY23 at the eEPS of Rs.46.28. Based on the estimated earnings the company is available at PEx of 9.87 at the CMP.


    Particulars (In Rs. Cr.) Q3FY23 Q2FY23 Q3FY22 QoQ% YoY% 9MFY23 9MFY22 YoY%
    Revenue from Operations 6,442.79 6,703.15 3,767.43 -3.88% 71.01% 19,656.25 10,513.96 86.95%
    Other Income 83.65 94.06 65.71 -11.07% 27.30% 286.02 138.10 107.11%
    Total Income 6,526.44 6,797.21 3,833.14 -3.98% 70.26% 19,942.27 10,652.06 87.22%
    Electrical energy purchased 3,346.61 3,858.93 1,442.39 -13.28% 132.02% 11,030.19 3,498.56 215.28%
    Fuel cost 429.41 598.31 768.74 -28.23% -44.14% 1,927.49 2,780.27 -30.67%
    Cost of materials consumed 39.77 81.13 64.15 -50.98% -38.00% 240.30 207.81 15.63%
    Purchase of stock-in-trade 728.81 563.44 145.28 29.35% 401.66% 1,481.54 188.57 685.67%
    Changes in inventories -1.63 -2.30 13.45 -29.13% -112.12% -13.04 -5.32 145.11%
    Employee benefits expense 138.98 146.28 126.21 -4.99% 10.12% 427.10 425.55 0.36%
    Other expenses 317.17 293.20 273.26 8.18% 16.07% 894.42 818.16 9.32%
    EBITDA 1,527.32 1,258.22 999.66 21.39% 52.78% 3,954.27 2,738.46 44.40%
    EBITDA Margin (%) 23.71% 18.77% 26.53% 494 bps -282 bps 20.12% 26.05% -593 bps
    Finance Cost 228.01 215.02 156.64 6.04% 45.56% 629.01 476.98 31.87%
    Depreciation & Amortisation expense 321.88 318.57 333.90 1.04% -3.60% 952.14 994.18 -4.23%
    Profit Before Tax 977.43 724.63 509.12 34.89% 91.98% 2,373.12 1,267.30 87.26%
    Tax 282.89 240.44 139.67 17.66% 102.54% 692.38 321.23 115.54%
    Profit After Tax 694.54 484.19 369.45 43.44% 87.99% 1,680.74 946.07 77.65%
    PAT Margin (%) 10.78% 7.22% 9.81% 356 bps 97 bps 8.55% 9.00% -45 bps
    EPS (in Rs.) 14.24 10.02 7.66 42.12% 85.90% 34.71 19.60 77.09%
    Source: Company website, EWL Research

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