Torrent Power received mixed reviews from brokerages after a Q1FY26 performance that beat some estimates while highlighting structural risks. Avendus and Morgan Stanley both maintained their respective stances but revised target prices downward, citing recent earnings dynamics.
Avendus on Torrent Power share: Maintains ‘Add’, TP cut to ₹1,500
Avendus has reiterated its ‘Add’ rating on Torrent Power, revising the target price to ₹1,500 from ₹1,550. The brokerage noted that Q1FY26 results were weaker than expected, prompting a downward revision in estimates. However, it remains optimistic about the company’s medium-term growth potential.
EBITDA is projected to grow at a CAGR of 19% between FY25 and FY27E. The valuation is based on 3.5x price-to-book value on FY27 estimates. Avendus also flagged several downside risks, including execution delays, aggressive bidding, muted power demand, oversupply issues, and premium valuations.
Morgan Stanley on Torrent Power share: Maintains equal-weight, TP ₹1,470
Morgan Stanley has maintained an ‘Equal-weight’ rating with a target price of ₹1,470. The brokerage highlighted a beat on adjusted PAT, driven by stronger profits in the renewable energy (RE) and transmission & distribution (T&D) segments. Lower depreciation and finance costs also contributed positively.
RE EBITDA came in at ₹3.5 billion, ahead of estimates, supported by improved plant load factors (PLF)—wind PLF rose 330 bps YoY and solar PLF 250 bps YoY. The distribution business delivered ₹8.6 billion in EBITDA, surpassing forecasts, owing to strong AT&C loss reductions across cities like Ahmedabad, Surat, Bhiwandi, and Agra.
Merchant power profits stood at ₹3.3 billion, while thermal EBITDA lagged at ₹1.7 billion due to lower incentives. The company has guided for a substantial capex of ₹70–80 billion in FY26, of which ₹8.5 billion has already been spent in Q1.
Despite operational strengths in renewables and T&D, Morgan Stanley cautioned that valuation and risk factors merit a balanced stance on the stock.
Disclaimer: The views expressed in this article are based on brokerage reports and do not represent the opinion of this publication. Investors are advised to consult their financial advisors before making any investment decisions.
