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Torrent Power Ltd

| Q2 and FY26 Earnings Conference Call

NEUTRAL SENTIMENT

Report Source

⬤11th Nov 25

Summary : Torrent Power reported strong Q2 FY26 PBT growth, driven by thermal merchant sales and distribution, while advancing significant new capacity projects.

Management Perspective positive : Management highlighted robust performance, successful commissioning of new initiatives, and expressed intent to expedite commissioning of projects.

Concall Report Analysis & Insights

Business Overview

  1. Reported PBT for Q2 FY26 increased 42% YoY to INR 979 crores.
  2. Adjusted PBT for the quarter rose 52% YoY to INR 948 crores.
  3. Thermal generation contribution increased by INR 293 crores, mainly from merchant power sales.
  4. Distribution business improved T&D losses and saw 4-5% demand growth.
  5. Renewable generation contribution reduced by INR 20 crores due to lower wind PLF.

Future Growth Prospects

  1. Received LOA for 250 MW FDRE Renewable Generation from licensed distribution unit.
  2. Secured LOA for long-term power supply from a new 1.6 GW coal-based plant.
  3. Commissioned India's largest green hydrogen natural gas blending initiative.
  4. Aggregate installed generation capacity reached nearly 5 GW by September 2025.
  5. Pipeline projects include 3.6 GW renewable, 3 GW pump storage, and 1.6 GW coal capacity.

Management Insights

  1. Majority of merchant power under short-term agreement was supplied in Q2.
  2. Cost of equipment for new coal-based power plants has increased.
  3. Fixed cost for the new coal plant is INR 4.22 paisa, variable cost is pass-through.
  4. Future merchant sales depend on market situation and peak demand dynamics.
  5. Targeting 500-600 MW renewable capacity addition for the current year.

Signs of Skepticism

  1. Management did not disclose the specific awardee for the BTG contract for the coal plant.
  2. Limited specific targets provided for renewable capacity additions beyond the current year.

Risk Factors

  1. Lower wind PLF from existing plants due to extended monsoon and cyclone.
  2. Higher O&M expenses partially offset merchant gains.
  3. Non-cash adjustment on account of foreign exchange variation.

Good To Know

  1. Q2 FY26 PBT includes a non-recurring credit of INR 31 crores.
  2. H1 CAPEX included INR 2500 crores for renewables and INR 3700 crores consolidated.
  3. The 500 MW FDRE project comprises 350 MW solar, 150 MW wind, and 100 MW battery storage.
  4. The 1.6 GW coal plant's first unit commissioning is 66 months from PPA date.

Key Drivers

  1. New 1.6 GW coal plant LOA.
  2. Green hydrogen blending commissioned.
  3. Strong Q2 PBT growth.
  4. Significant renewable capacity pipeline.

Key Analyst Discussions

Market Trends & Consumer Behavior

  1. Analysts questioned the reasons for lower wind PLF in Gujarat.
  2. Inquiries were made about the landed cost of LNG for power production.
  3. Questions on market dynamics for future merchant power sales.

Financial Highlights

  1. Analysts inquired about the breakup of merchant and LNG sales.
  2. Questions were raised regarding the fixed and variable costs of the new coal plant.
  3. Analysts asked for details on H1 CAPEX, specifically for renewable energy.
  4. Clarification was sought on the total increase in thermal merchant contribution.

Product Composition

  1. Analysts asked for specifications of the 500 MW FDRE project, including solar, wind, and battery components.
  2. Questions were posed about the CAPEX and IRR expectations for the PSP project.
  3. Inquiries were made about renewable capacity addition targets for FY26 and FY27.

Strategic Considerations

  1. Analysts asked about the expected commissioning date for the MP Power thermal plant.
  2. Questions were raised regarding the progress of the planned INR 8000 crore RE CAPEX.