Torrent Power Ltd Q1 FY27 Earnings Analysis

- Power demand in India has a strong growth outlook with a 6% CAGR over the last 10 years, expected to continue. - Torrent Power is in an investment phase with sizable capex plans: ₹28,000 crores for renewables (4 GW), ₹23,000 crores for coal (1.6 GW), and ₹14,000 crores for pumped storage (3 GW). - Distribution capex is ongoing with about ₹2,000 crores per annum planned for 4-5 years. - Expected new renewable capacity commissioning is around 1.2 to 1.4 GW next year. - Merchant capacities expected to provide profits once LNG price volatility subsides and power demand deficit remains. - Long-term gas availability is secured via domestic and imported cargoes, but pricing remains a key factor influencing generation volumes. - The balanced portfolio, including tied-up long-term PPAs and open capacities, supports stable revenue growth.

- Adjusted Profit Before Tax (PBT) for Q4 FY26 increased by 16% YoY after one-offs, indicating growth potential. - Regulatory changes improved Return on Equity (ROE), with performance-based incentives possibly raising effective ROE from 14% to 15%. - Planned capex for FY27 is expected to be significantly higher than FY26, supporting asset growth. - Portfolio includes 4 GW renewable projects (INR 28,000 crores capex), 1.6 GW coal-based (INR 23,000 crores), and 3 GW pumped storage hydro (INR 14,000 crores), signaling strong capacity expansion. - Distribution capex expected at INR 2,000 crores annually over next 4-5 years. - Gas-based plant profitability expected to improve post stabilization of LNG prices and commodity supply. - Commissioning of thermal and renewable projects by FY31-FY32 will drive EBITDA and cash flows. - Overall, strong balanced portfolio and regulatory environment expected to sustain earnings growth.

- Torrent Power has a strong capex plan with a total of around INR 80,000 crores over 5 years. - Segment-wise capex includes: - Renewables: 4 GW capacity with INR 28,000 crores investment. - Coal-based thermal: 1.6 GW capacity with around INR 23,000 crores capex. - Pumped storage hydro (PSP): 3 GW capacity with INR 14,000 crores investment. - Distribution: Annual capex of about INR 1,500-2,000 crores. - FY26 capex was INR ~9,350 crores, expected to be much higher in FY27. - Nabha Power acquisition valued at INR ~6,800 crores (enterprise value) with INR 3,400 crores debt taken. - Torrent Power is actively looking at bidding for new thermal capacities at the state level. - Focus on complex renewable projects such as hybrid and round-the-clock (RTC) to improve returns. - Balanced phasing of capex over years, with more heavy spending expected from year 2 or 3 onwards.

- Torrent Power has plans for significant capex across renewable (4 GW), coal-based (1.6 GW), and pumped storage hydro (3 GW) projects, indicating ongoing funding needs. - For the Nabha Power acquisition (~INR 6,800 crores enterprise value), they plan to raise around INR 3,500 to 4,000 crores in funding, which likely includes debt and/or equity. - The company states their balance sheet is very strong and under-leveraged, with ample room for further investments. - Leverage ratios are currently comfortable, and the company has capacity to take on incremental projects funded by new leverage if good projects and returns are available. - Capex in FY27 is expected to be significantly higher than FY26, implying continued fundraising or internal accrual utilization. Overall, Torrent Power is open to raising new funds (debt or equity) as needed to support their expansion and acquisitions while maintaining comfortable leverage.

- Renewable projects of 4 GW and the transmission project of Solapur are currently under implementation. - The company's investment plan includes a significant capex with roughly INR28,000 crore for Renewables, INR23,000 crore for Coal, and INR14,000 crore for Pump Storage Projects (PSP). - Distribution capex is ongoing at about INR1,500-2,000 crore annually for the next 4-5 years. - Capex phasing is well balanced, with total capex over next 5 years estimated around INR80,000 crore. - Acquisition of the Nabha Power project is expected to be consolidated in Q1 FY27. - Other projects in the pipeline are progressing, with details available in the company’s latest investor presentation. - The company is actively looking to bid for new thermal capacity in a couple of states.