Utility Scale

Distribution Business and Renewables Boost Torrent Power’s Q1 FY 2027 Revenue 3% to ₹8,124 Crore; Profit After Tax Declines 11% to ₹662 Crore on Higher Finance Costs

August 13, 2026 By Gaurav Nathani 5 min read
0:00 / 05:46

Torrent Power Limited reported a consolidated revenue of ₹8,124.15 crore for the first quarter of fiscal year 2026-2027, representing a 2.75% increase over the same period last year. While growth was supported by the distribution and renewable segments—including 4% volume growth in the franchisee business—consolidated Profit After Tax (PAT) declined 12.66% to ₹661.85 crore. The contraction in net profitability was driven by a significant rise in finance costs and a higher effective tax rate following the expiration of fiscal incentives.

Key Financial Metrics (Consolidated)

The following table details the financial performance for the quarter ended June 30, 2026:

MetricQ1 FY 2026-2027Q1 FY 2025-2026YoY % Change
Revenue from Operations₹8,124.15 Cr₹7,906.71 Cr+2.75%
Profit After Tax₹661.85 Cr₹757.85 Cr-12.66%
Earnings Per Share (EPS)₹12.68₹14.52-12.67%
  • EBITDA Margin: 18.93%, reflecting a 17 basis point increase year-over-year.
  • Net Profit Margin: 8.15%, a compression of 123 basis points compared to 9.38% in the prior-year period.
  • Profit Before Tax (PBT): Reported PBT stood at ₹925 crore. This compares to an adjusted PBT of ₹1,044 crore in Q1 FY 2025-2026, which excluded a non-recurring ₹59 crore foreign exchange loss.

Segment-Wise Operational Performance

Distribution and Transmission (T&D)

The segment recorded a 71% increase in profit contribution during the quarter. Performance was driven by the receipt of favorable regulatory orders approving carrying costs of ₹41 crore and higher returns on equity (ROE) following asset capitalization. Operational volumes in the distribution franchisee business grew 4% year-over-year. Additionally, newly commissioned transmission projects contributed an incremental ₹11 crore to the segment profit.

Renewable Energy Segment

Revenue for the renewables segment rose 17.70% to ₹434.74 crore, supported by the commissioning of 70 MW during the quarter. Absolute EBITDA for the segment increased by ₹66 crore when adjusted for a one-off ₹46 crore Late Payment Surcharge (LPS) claim booked in the corresponding quarter of the previous year.

Thermal Generation Segment

The segment reported a profit of ₹373.19 crore, a recovery from the ₹38.93 crore loss recorded in Q4 FY 2025-2026. However, adjusted contribution saw a ₹123 crore year-over-year decline. Factors included lower merchant power sales gains and a ₹51 crore increase in operations and maintenance (O&M) expenses. The company sold 445 MUs in the merchant market during the quarter, largely through the high-price Day-Ahead Market (DAM).

Analysis of Financial Variance & Cost Drivers

Management identified several factors pressuring consolidated net margins:

  1. Finance Costs: Interest and finance charges surged 38.12% to ₹292.99 crore, attributed to higher borrowing levels and increased capitalization of ongoing projects.
  2. Effective Tax Rate: The rate rose from 25% to 28% following the expiry of tax holidays under Section 80-IA for several units.
  3. Leverage: The consolidated debt-to-equity ratio increased to 0.97 from 0.44 a year ago.
  4. O&M Costs: Expenses rose by ₹51 crore due to gas plant upgrades intended to improve cyclical flexibility and response times in an environment of high renewable penetration.

Acquisition Update: Nabha Power

Torrent Power consummated the acquisition of Nabha Power on June 25, 2026. For the five-day period included in the Q1 results, the asset contributed ₹15 crore to profit. The acquisition added approximately ₹6,800 crore in gross debt to the consolidated books, comprising ₹3,000 crore on Nabha’s balance sheet and ₹3,800 crore at the parent level. Management has guided for a steady-state annual EBITDA contribution of approximately ₹1,000 crore from this asset.

Project Pipeline & Capital Expenditure (CAPEX) Guidance

The company’s renewable energy commissioning targets and long-term project timelines are summarized below:

Fiscal YearRenewable Commissioning Targets
FY 2026-20271.2 GW (Phasing: ~400 MW in H1; ~800 MW in H2)
FY 2027-20281.4 – 1.6 GW
FY 2028-2029Remaining balance of 4.6 GW pipeline
  • FY 2026-2027 RE CAPEX: Guidance of approximately ₹10,000 crore.
  • Anuppur Thermal Project (1.6 GW): Commissioning expected in 6–7 years. This project is intended to replace the AMGEN plant, which is permitted to operate only until December 2030.
  • Pumped Storage Hydro (3 GW, Maharashtra): Targeted commissioning in 3–4 years.
  • Solapur Transmission: Expected commissioning within FY 2026-2027.

Executive Commentary & Strategic Position

CFO Saurabh Mashruwala provided the following perspectives on market volatility and investment discipline:

  • On Energy Pricing: “If you look at a slightly short-term or a long-term horizon, we expect that gas prices should settle somewhere in the range of 5–8… per MMBtu.” He noted this would result in a variable cost of ₹4 to ₹4.5 per unit, making gas competitive against battery storage solutions estimated at ₹5 to ₹5.5 per unit.
  • On Investment Strategy: “Our benchmark will be the IRR, not to acquire the more and more capacity,” confirming a mid-teen IRR threshold for new project bids.
  • On Infrastructure Bottlenecks: Management cited transmission availability—specifically PGCIL grid connectivity and Right-of-Way (ROW) issues—as the primary obstacle to the 4.6 GW renewable pipeline.

Regulatory & Shareholder Developments

At the 22nd Annual General Meeting (AGM) held on August 3, 2026, the following resolutions were approved:

  • Borrowing Limit: A Special Resolution was passed enhancing the company’s borrowing limit to ₹35,000 crore.
  • Dividend: Confirmation of a total dividend of ₹20.00 per share for the fiscal year (₹15.00 interim and ₹5.00 final).
  • Directorate: Re-appointment of directors Varun Mehta and Jigish Mehta, and re-appointment of Independent Directors Radhika Haribhakti and Ketan Dalal.

Official Source Citations

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