Torrent Power gets lit up

about 11 months ago
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Torrent Power is in the limelight following its very good performance for Q1FY20. Volumes have surged over 3.5 times, with the stock hitting an intraday high at Rs.304.55, an increase of over 7%.

The company posted a 22% (YoY) rise in consolidated net profit at Rs.276 crore on a 6% increase in revenue from operations at Rs.3736 crore.

Operating profit was up 9% at Rs.834 crore and margins rose from 21.7% to 22.3%.

The company had sought shareholders' nod for issuance of NCDs by way of offer or invitation to raise up to Rs 1,500 crore on a private placement basis to qualified institutional buyers, banks other than scheduled commercial banks, companies, corporates, among others.

Factors which helped the improved performance:

  • Contribution from merchant power sales during the quarter;
  • Higher profits from Renewables business;
  • Improved performance of licensed and franchised distribution businesses on back of reduction in T&D losses, higher regulated ROE in licensed distribution business & favourable resolution of a regulatory dispute;
  • Reduction in tax expenses due to improved recoverability of past MAT credits and lower deferred tax liabilities

At the same time, it had to contend with a decrease in contribution from long term PPA of gas based generation plant due to new CERC tariff regulations. There was also an increase in finance and depreciation costs, reflecting additional capex in distribution and renewable projects.

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