Torrent Power Concall – February 2025: Key Highlights
Financial Performance
Profit Before Tax (PBT) Growth:
Torrent Power reported a PBT of ₹630 crores for Q3 FY25, reflecting a 23% rise from ₹513 crores in the same quarter last year. After adjusting for a one-time ₹77 crores gain from the cable business sale, the adjusted PBT stands at ₹553 crores, showing an 8% year-over-year growth.
Factors Driving Performance:
- Thermal Generation: Contributed an additional ₹70 crores due to higher merchant power and LNG sales (₹37 crores) and a 4% increase in demand.
- Foreign Exchange Adjustments: A non-cash adjustment led to a ₹33 crores boost.
- Distribution Business: Improved by ₹40 crores, helped by increased volume, higher returns, and CAPEX capitalization.
- Renewable Energy: Increased by ₹18 crores despite lower wind power due to reduced wind speeds. The newly commissioned 300 MW renewable plant added to growth.
Project Updates
New Capacity:
Torrent Power fully commissioned a 300 MW solar project, increasing its total generation capacity to 4.7 GW. The current energy mix includes:
- 2.7 GW from gas-based generation
- 1.7 GW from renewable sources
- 362 MW from coal-based power
Upcoming Projects:
The company has a 3 GW renewable energy pipeline, along with a pump storage project and transmission projects in Khavda and Solapur.
New Ventures
Green Hydrogen Project:
Torrent Power launched a green hydrogen pilot project in Uttar Pradesh, blending it with CNG. The project is currently undergoing trial runs.
Capital Expenditure (CAPEX)
Nine-Month CAPEX:
The company invested approximately ₹1,250 crores in the first nine months:
- ₹915 crores in licensed distribution
- ₹176 crores in franchisee operations
- ₹138 crores in transmission
- ₹1,300 crores in renewable energy
Future CAPEX Plans:
Torrent Power plans to spend ₹2,000 crores in the next fiscal year:
- ₹1,750 crores for licensed distribution
- ₹250 crores for franchisee operations
Performance by Business Segment
Thermal Generation:
Revenue from thermal generation fell 10% to ₹1,400 crores. However, EBITDA grew by 50% due to higher merchant power sales, LNG trading, and foreign exchange gains.
LNG Trading:
While exact earnings were not disclosed, management indicated that LNG sales improved due to strategic trading from DGEN and SUGEN plants.
Strategic Plans & Debt Management
Debt Repayment:
Torrent Power raised ₹3,500 crores through QIP, with 75% allocated for debt repayment and 25% for corporate expenses.
Future Growth Opportunities:
The company is keen to participate in Uttar Pradesh’s privatization plans, signaling its interest in expanding its footprint in the sector.
Challenges & Outlook
Market Challenges:
The company acknowledges lower PLF (Plant Load Factor) and fluctuating fuel costs as challenges but remains confident in mitigating them through merchant power sales and LNG trading.
Project Timelines:
While some projects have seen minor delays, management remains committed to timely project execution with solid financial backing.
Torrent Power continues to expand strategically, balancing growth with prudent financial management. With a strong focus on renewable energy, CAPEX, and new ventures like green hydrogen, the company is well-positioned for future opportunities in the power sector.
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