✨ At a Glance

Torrent Power has quietly become a multi-bagger in the last 5 years, despite being in the unsexy power utility space. From generation to distribution, they do it all. The cash flows are hot, the dividends are steady, and the management runs it like a private FMCG — not a PSU. But is the current surge justified?

📊 Part 1: What Does Torrent Power Actually Do?

• Business Segments:
  • Transmission & Distribution (T&D) — 89% of revenue
  • Generation (Renewable + Thermal)
  • Trading, EPC, Smart Metering (Emerging segments)
• Presence: Gujarat, Maharashtra, UP, Karnataka
• Capacity: ~4 GW across thermal, wind & solar
• Recent Deal: 300 MW wind project win in June 2025 (SECI)

Torrent has carved out a reputation of being more efficient than the average PSU discom — while retaining the margins of a private player.

Think of it as the clean-shaven, suit-wearing cousin of BSES Rajdhani, who actually pays his bills.

📈 Part 2: 5-Year Financial Recap (FY20–FY25)

• Revenue doubled in 5 years
• Net profit 2.6x, from ₹1,179 Cr to ₹3,059 Cr
• OPM dipped post COVID but stabilizing around 18%
• ROCE trending up — indicating capex is finally delivering

The FY22 profit dip? One-time impairment, not an existential crisis. Chill.

💥 Part 3: FY25 & Q4FY25 Results

FY25 (Full Year)

• Revenue: ₹29,165 Cr
• Net Profit: ₹3,059 Cr (up 61% YoY)
• EPS: ₹59.31
• OPM: 18%

Q4FY25 (Mar 2025)

• Sales: ₹6,456 Cr
• Net Profit: ₹1,077 Cr
• EPS: ₹21.03
• OPM: 18%

Growth across segments. The wind project portfolio and smart metering business are adding new dimensions.

🧾 Part 4: Balance Sheet & Cash Flows

• Debt reduced from ₹11,632 Cr (FY24) to ₹8,840 Cr (FY25)
• Operating Cash Flow FY25: ₹4,805 Cr
• Capex (FY25): ₹3,642 Cr
• Free Cash Flow = Positive

They’re managing to invest aggressively and reduce debt simultaneously. That’s rare.

Also: inventory days = nil (because they don’t stock electricity in cartons, unlike FMCG companies).

🔋 Part 5: Shareholding Snapshot

• FIIs have doubled their stake in 2 years
• Promoters still hold 51% — stable, no dilution drama
• Public got bored (or booked profits)

Fun fact: the government’s stake jumped from 1.5% to 8.3% — probably due to institutions reallocating infra/renewable exposure.

🎯 Part 6: Valuation Check (June 2025)

• CMP: ₹1,407
• EPS (TTM): ₹59.31
• P/E: ~23.7x
• Sector Median P/E: 17x

So yes — it looks pricey. But is it too pricey?

Fair Value Estimate

• Base EPS FY26E: ₹65
• P/E Range: 20x (conservative) to 25x (growth)

🎯 Fair Value Range = ₹1,300 to ₹1,625

Verdict? It’s slightly above median valuations but not in bubble territory. The growth justifies it… for now.

⚠️ Part 7: Risks to Watch

• Tariff caps could limit profitability — you can’t raise rates like Netflix
• Competition is heating up — Tata Power & Adani want a bigger piece
• Capex execution risk — wind projects take 24–30 months to become accretive
• Regulatory overhang — one DISCOM scandal, and entire sentiment tanks

Also, FY22’s negative “Other Income” (-₹1,089 Cr) still haunts accounting purists. Justified or not, the write-down was ugly.

🧠 Final Edu Verdict

Torrent Power is what you get when a utility company decides to actually give a damn about growth and governance.

• ✔️ Clean execution
• ✔️ Debt-lighting itself
• ✔️ Big on cash flows
• ✔️ Not a PSU

TL;DR: It’s the “Asian Paints” of the power world.

You won’t double your money in 3 months. But 15–20% CAGR for the next 5 years? Very possible.

As long as they don’t try launching a Torrent EV or crypto token, we’re safe.

✍️ Written by Prashant | 📅 June 18, 2025
Tags: Torrent Power, Power Stocks, Utilities, Wind Energy, FY25 Results, EduInvesting