Torrent Power Limited

Utilities — Utilities - Independent Power Producers · NSE

₹1,223.00−₹15.60 (−1.26%)

DalalBaazaar Score

46 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by short-term liabilities exceed short-term assets, negative free cash flow, falling profits.

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of Torrent Power Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Torrent Power Limited, together with its subsidiaries, engages in the generation, renewables, and transmission and distribution of electricity in India.

IndustryUtilities - Independent Power Producers

SectorUtilities

Employees8,173

Annual revenue₹28,610 Cr

How does it make money?

Turns over ₹28,610 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹20 left at the operating level before interest, tax and depreciation. Each of its 8,173 employees supports ₹3.50 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin20.0%

Net margin8.4%

Revenue / employee₹3.50 Cr

Who are its competitors?

The closest listed comparisons in its industry are NTPC LTD, POWER GRID CORP. LTD., TATA POWER CO LTD, ADANI POWER LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

NTPC LTDP/E 11.0x · ROE 13.7%

POWER GRID CORP. LTD.P/E 14.6x · ROE 15.8%

TATA POWER CO LTDP/E 29.3x · ROE 9.8%

ADANI POWER LTDP/E 26.5x · ROE 21.9%

What is its competitive advantage?Little sign of one

Returns on capital of 11.9% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE11.9%

ROE12.7%

Peer median ROE15.8%

What is the outlook?

9 analysts covering the stock expect revenue to grow about 10.1% and earnings to grow about 10.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+10.1%

Est. earnings growth+10.9%

Analysts9

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +13% while net margin moved +1% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+13%

Margin effect+1%

DalalBaazaar Score

46/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 4.0% — barely ahead of inflation
✗ Profit CAGR of only 4.5%
✗ Profit fell 12.7% in the latest year

Quality vs. Valuation

Company Quality

43/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

45/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

26.5x

3Y Median

25.6x

40 monthly readings · mean 29.2x · range 14.9x–49.2x

Sector Median

20.6x

median of 4 sector peers

🟡Currently trading close to its 3y median of 25.6x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 29% above the peer median of 20.6x.

vs. its own history

Fair

25.6x median over 40 months · +4%

vs. sector peers

Expensive

20.6x median of 4 peers · +29%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

26.5x

P/B

3.23x

EV/EBITDA

13.1x

PEG

5.89

Dividend Yield

1.64%

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Debt is rising
Total debt is up 33% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 19.2% to 12.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 16.7% to 11.9% — often a sign of competition or overexpansion.
Short-term liquidity is tight
Current ratio of 0.95 — near-term obligations exceed near-term assets.

Red Flags

3 items require attention · 3 watch

🟡Debt is increasingFinancial
Total debt is up 33% over 3 years.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹2,240 Cr in the latest year.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.95 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

A premium to the sector to defend
It trades 29% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 4.0% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 19.2% to 12.7%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 18%✓ 20.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹2,240 Cr
Profit that never becomes cash eventually stops being profit.
4Revenue growth stays above 4% a year✓ 4.0% CAGR
Latest reported year was 2.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5ROCE stays above 9%✓ 11.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

1 good · 8 neutral · 2 weak

Market Cap

₹61,627 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

26.5x

Fair

Fairly valued against the generic band

P/B Ratio

3.23x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹46.11

Profitable

Profitable on a per-share basis

ROE

12.7%

Moderate

Moderate capital efficiency

ROCE

11.9%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.71x

Moderate

Moderate leverage

Revenue Growth (YoY)

2.8%

Modest

Modest growth

Profit Growth (YoY)

-12.7%

Falling

Profits are shrinking

Dividend Yield

1.64%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹2,240 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹1,223

P/E (Forward)

20.4x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

14.0%

Average

Average margins

Net Margin

8.0%

Average

Average bottom-line conversion

Current Ratio

0.95

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.64

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

1232.5 / 1261.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

43.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹25,403 Cr	₹26,894 Cr	₹28,841 Cr	₹28,610 Cr	+4.0%
EBITDA	₹5,029 Cr	₹4,776 Cr	₹5,574 Cr	₹5,715 Cr	+4.4%
EBITDA Margin	19.8%	17.8%	19.3%	20.0%	—
PAT (Net Profit)	₹2,117 Cr	₹1,833 Cr	₹2,989 Cr	₹2,416 Cr	+4.5%
EPS	₹44.06	₹38.14	₹61.23	₹47.95	+2.9%
ROE	19.2%	15.2%	17.0%	12.7%	—
ROCE	16.7%	13.7%	14.7%	11.9%	—
Total Debt	₹10,541 Cr	₹11,632 Cr	₹8,840 Cr	₹13,971 Cr	+9.8%
Free Cash Flow	₹367 Cr	₹602 Cr	₹475 Cr	-₹2,240 Cr	—

🟢 Revenue has grown at 4.0% a year over 3 years.

🟢 EBITDA has grown at 4.4% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 20.0% over 3 years.

🟢 PAT (Net Profit) has grown at 4.5% a year over 3 years.

🟢 EPS has grown at 2.9% a year over 3 years.

🔴 ROE has fallen from 19.2% to 12.7% over 3 years (-6.6 pts).

🔴 ROCE has fallen from 16.7% to 11.9% over 3 years (-4.9 pts).

🔴 Total Debt has grown at 9.8% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹367 Cr to -₹2,240 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹45,193 Cr

Total Liabilities

₹25,485 Cr

Total Debt

₹13,971 Cr

Cash & Equivalents

₹767 Cr

Operating Cash Flow

₹5,464 Cr

Capex

-₹7,705 Cr

Shareholding (proxy)

Institutional Holding

26.6%

Insider Holding

62.3%

Corporate Actions

Next Earnings

13 Nov 2026

Dividend Rate

₹20

Ex-Dividend Date

19 Jun 2026

Analyst Consensus

Recommendations

7 Buy · 4 Hold · 1 Sell

Target Price (Mean)

₹1,475.42

+20.6% vs CMP

Target Range

₹1,270 – ₹1,780

Peer Comparison

Company	P/E	ROE
NTPC LTD	11.0x	13.7%
POWER GRID CORP. LTD.	14.6x	15.8%
TATA POWER CO LTD	29.3x	9.8%
ADANI POWER LTD	26.5x	21.9%

Recent News

1 mixed5 general

Torrent Power Ltd Share Price Target, Forecast for Long Term Equity.

HDFC Sky, 29 SeptAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Tata Power vs Torrent Power vs JSW Energy: Power Stocks on Fire! Who’s Winning the Heatwave Rally?

Goodreturns, 12 Oct

Torrent Power 52 Week Low Streak: Valuation and Context

Univest, 12 Oct

Torrent Power tanks 35% from April high; stock hits 31-month low

Business Standard, 09 Oct

Torrent Power (NSEI:TORNTPOWER) Stock Price

Simply Wall Street, 11 Oct

Torrent Power plans around $500 million bond sale, bankers say

The Economic Times, 15 Oct

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate9/20

🔴Financial HealthStretched8.7/20

🔴GrowthWeak7.4/20

🟡ProfitabilityModerate7.1/15

🟡ValuationFair8.1/15

🟡RiskModerate5.8/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation.

This thesis breaks if

✓EBITDA margin holds above 18%20.0%
✗Debt / EBITDA stays below 2x2.4x
✗Free cash flow remains positive-₹2,240 Cr
✓Revenue growth stays above 4% a year4.0% CAGR
✓ROCE stays above 9%11.9%