Torrent Power Limited is a leading integrated power utility in India, engaged in generation, transmission, and distribution of electricity. With an installed capacity of 4.8 GW, it operates across multiple cities and states, delivering high operational efficiency. The company is also expanding into renewable energy and pumped storage, backed by a strong balance sheet and consistent financial performance.
In this article we are going to discuss the summary of the management commentary that was delivered on Q4FY25 performance.
Financial Performance (Q4 FY25)
Reported PBT was ₹619 crore vs. ₹617 crore YoY — flat growth.
Adjusted for the impact of the newly commissioned 420 MW solar project (under stabilization phase), adjusted PBT would have been ₹654 crore, a 6% growth YoY.
The solar project impacted profitability by ₹35 crore due to suboptimal contribution during stabilization.
Segment-Wise Contributions
Positive Drivers:
- Distribution business profit rose by ₹112 crore:
- Higher electricity volumes.
- Improved RoE.
- Capex capitalization.
- Incentives (O&M and solar).
- True-up order adjustments.
- Demand growth across all distribution areas was 4%.
Negative Offsets:
- Merchant power and LNG sales were lower by ₹88 crore due to:
- Elevated LNG prices ($12–$17).
- Soft merchant power demand due to high fuel prices.
- Gas Prices: Recently trended downward, improving outlook.
- Received LoAs from NVVN:
- 1,150 MW from DGEN and 150 MW from SUGEN.
- Operational period: March 16 to October 15 (same specs as last year).
Renewables:
- Solar profitability improved by ₹43 crore.
- Wind project PLF fell due to weather, resulting in a ₹30 crore hit.
- Net renewable gain: ₹13 crore.
Capacity & Project Updates
- Commissioned 84 MWp of 367 MWp for MSEDCL in Q4.
- As of March 31, 2025, total installed capacity: 4.8 GW:
- Gas: 2.7 GW
- Renewable: 1.7 GW
- Coal: 362 MW
Project Pipeline Includes:
- 3.1 GWp of renewables.
- 3 GW pumped hydro storage.
- Transmission projects in Khavda & Solapur.
Strategic & Operational Highlights
Capital & Fundraising:
- Successfully raised ₹3,500 crore via QIP, Torrent Group’s first equity raise in 30 years.
Distribution Excellence:
- Achieved 2.34% distribution losses — among India’s lowest and globally benchmarked.
- Agra (franchisee) AT&C loss reduced to 6.94% from 58.77% (since takeover in 2010).
Pumped Storage Project:
- Signed India’s first Energy Storage Facility Agreement with MSEDCL for 2 GW over 40 years.
- Regulatory approvals and land acquisition in progress.
- CAPEX to begin in FY26, with major spend in FY27–28.
Question and Answer Session Highlights
What was the CAPEX in FY25, and what is the planned CAPEX for FY26 across segments?
- FY25 CAPEX:
- License distribution: ₹1,300 crore
- Franchisee: ₹275 crore
- Transmission: ₹250 crore
- Renewable: ₹2,500 crore
- FY26 Planned CAPEX:
- License distribution: ₹1,750 crore
- Franchisee: ₹250 crore
- Transmission: ~₹1,000 crore
- Renewable: Detailed in investor PPT
Is the NVVN contract a take-or-pay agreement? What’s the minimum guaranteed volume?
Yes, it is largely a take-or-pay contract with a minimum guaranteed offtake similar to last year. The guaranteed volume is spread over six months (March to October), and if NVVN does not offtake the committed amount, fixed charges are still payable.
What’s the update on the 2 GW pumped storage project in Maharashtra?
Regulatory approvals and land acquisition are underway. The CAPEX will begin in FY26 with significant investment expected in FY27–28.
How much CAPEX has been incurred in renewables so far, and what’s the remaining investment?
As of March 2025, about ₹2,500 crore CAPEX has been incurred. A large portion of the ₹20,600 crore total project cost remains, with FY26 expected to be CAPEX heavy due to multiple project commissionings.
What is the offtake experience under the NVVN tender so far, considering soft demand in April–May?
There was intermittent offtake due to weather-driven demand variations. However, NVVN extended the contract period to October, so off-take is expected to increase. Prices have peaked during certain hours, indicating demand revival.
Are there limits on the number of circles a private player can bid for in UP privatization?
UP may be split into 5–6 circles. While the final structure is yet to be formalized, the aim is to distribute among multiple players for better management. It will follow a regulated cost-plus ROE model.
Has the 48-month commissioning timeline started for the pumped storage project?
Yes, the clock started from the date of PPA signing. While land acquisition is still ongoing, Torrent expects to complete approvals and start CAPEX soon.
What was the merchant power contribution in Q4 and full year FY25?
Merchant power contribution in Q4 dropped by ₹88 crore YoY. Full-year merchant EBITDA was approximately ₹740–750 crore.
Will Section-11 apply this year too or is Torrent only operating under NVVN tenders?
As of now, Torrent is operating under NVVN tenders only. Section-11 was applicable in the previous year but not in the current period.
How is the NVVN tender different from last year’s?
Structurally similar. It offers both fixed and variable components. Torrent earns a margin through lower gas procurement costs relative to pass-through prices. Profitability is expected to be similar to last year with slight downside.
Any medium-term PPAs being discussed for gas-based plants?
Currently, no medium or long-term PPAs due to gas price volatility and uncertain demand. NVVN remains the primary route for gas-based power sale.
What’s Torrent’s plan regarding increasing merchant capacity?
Torrent plans to add wind-based merchant capacity, increasing from 200 MW to 400 MW. If market conditions permit, this capacity could be tied up in the future.
When will pumped hydro CAPEX meaningfully begin, and what is the plan for FY26–27?
Initial CAPEX begins in FY26 (for land and equipment), with major expenditure expected in FY27 and FY28.
What’s the CAPEX outlook for transmission projects in FY26?
About ₹250 crore was spent in FY25. The remaining ₹900–1,000 crore will be spent in FY26 to complete two transmission projects.
Is Torrent evaluating expansion in thermal (coal) power too?
Yes, Torrent is evaluating both greenfield and brownfield coal opportunities but hasn’t committed to any specific project yet.