Actions of Torrent Power Ltd they have risen 8.98 percent in two consecutive sessions. The stock settled 4 percent higher at Rs 531.40 on Wednesday. Geojit Financial Services has made an 'Accumulate' call on the counter with a target price of Rs 550 over a one-year period.
The brokerage, in its report, said: "Distribution businesses anticipate higher productivity as a result of declining T&D (Transmission and Distribution) losses and expansion ambitions to boost the top line. For FY25, We anticipate a 28 percent increase in renewable capacity, driven by capacity increases."
Geojit also mentioned that the midcap energy company's revenue growth would remain intact as it maintained healthy operating performance, helped by the addition of a newly licensed area, low AT&C losses (aggregate technical and commercial), greater demand and improvement of collections in the distribution areas.
"This boosted revenue at 9MFY23, reported at Rs 19,656 crore, it showed a growth of 87 per cent compared to 9MFY22 of Rs 10,514 crore. This is mainly due to a 63 per cent increase in unit sales in the areas of distribution. However, margins decreased to 18.70 percent from 24.70 percent during the period due to low fuel-based incentives and spoilage charges at the DGEN plant," it said.
By reducing losses through smart metering and maintaining strict supervision in distribution areas, Torrent Power has been able to manage its distribution segments effectively, he added.
"It has plans to expand its renewable assets with a total capacity of 715 MW, consisting of 300 MW of solar power and 415 MW of wind power. In addition, a possible acquisition of the Nagpur distribution areas and adjacent areas is being discussed." he added. fixed.
Given Torrent Power's strong balance sheet and strong performance from its licensed and franchised distribution segments, along with improvements in PLF (Plant Load Factor) for both generation segments, Geojit anticipated the company's earnings they would improve.
On the technical front, the stock traded above the 5, 20, 50, 100, and 200-day moving averages. The counter's 14-day RSI came in at 57.64. A level below 30 is defined as oversold, while a value above 70 is considered overbought. The company's stock has a price-to-value (P/E) ratio of 22.35.
The voucher has an average price target of Rs 542.50, Trendlyne data showed, suggesting 2.31 percent upside potential. The stock has a one-year beta of 0.83, indicating low volatility.
Torrent Power is the flagship company of the Torrent Group. It has 4,109.5 MW of total installed capacity, which comes from thermal and renewable energy generation facilities. For the transmission of electricity produced by gas-fired power plants, the company also owns and operates 482 km of transmission lines.
Meanwhile, Indian equity benchmarks are expected to remain closed today due to navami branch. The equity derivatives segment, equity segment, SLB (Security Lending and Borrowing) segment, currency derivatives segment and interest rate derivatives segment would also remain closed, according to the BSE website.
Trading on the national stock exchanges, BSE and NSE, would resume on Friday, March 31. However, the Multi Commodity Exchange (MCX) would open today for the afternoon session at 5 pm.
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