Torrent Power Q1 FY27 Results (NSE: TORNTPOWER)
Signal: Growth reaccelerated
The read
Q1FY27 results show a mixed picture: revenue growth of 2.8% YoY was driven by T&D and renewables, but PAT fell 10.8% as finance costs surged 38% from debt raised for the Nabha acquisition (closed June 25). The generation segment's revenue and profit declined sharply, partly due to lower merchant power sales or plant outages. The Nabha acquisition added only 5 days of operations; full impact will be visible from Q2FY27. Gross margin improved 90bps, but EBITDA margin was flat. The debt equity ratio rose to 0.78 (standalone) from 0.38 a year ago, increasing financial risk. The company's long-term thesis hinges on integrating Nabha's stable PPA-based cash flows and scaling renewables.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹8,124.15 Cr | 2.8% | 26.8% |
| EBIT | ₹1,218.18 Cr | 1.7% | |
| Net profit | ₹661.85 Cr | -10.8% | |
| EPS | ₹12.68 | -12.7% | |
| EBIT margin | 18.9% |
P&L walk
Revenue grew 2.8% YoY, but PAT fell 10.8% as finance costs (+38% YoY) and depreciation (+2.6% YoY) outpaced operating profit. Gross margin improved 90bps to 28.4% on lower fuel cost and stock-in-trade, but EBITDA margin was flat at 18.9% due to higher other expenses. Other income declined 23% YoY. The effective tax rate rose to 28.5% from 24.7% in Q1FY26, further pressuring net profit.
Segments
Generation segment revenue fell 31% YoY to ₹1,712 Cr, dragging group performance; Transmission & Distribution grew 11% to ₹7,246 Cr and Renewables grew 18% to ₹435 Cr, more than offsetting the generation decline in revenue but not in profit due to higher finance costs. The Nabha Power acquisition (coal, 5 days) contributed ₹68.6 Cr revenue and ₹7.6 Cr profit, classified under Generation.
Key positives
- T&D segment revenue grew 10.9% YoY and result grew 10.2%, indicating steady regulated business.
- Renewables segment revenue grew 17.7% YoY, reflecting capacity additions and higher generation.
- Gross margin improved 90bps YoY to 28.4% on lower fuel and stock-in-trade costs.
- Nabha Power acquisition (2x700 MW coal, 25-year PPA) closed on June 25, adding a stable long-term revenue stream.
Key concerns
- PAT declined 10.8% YoY due to 38% surge in finance costs from debt-funded acquisition.
- Generation segment revenue fell 31% YoY, dragging consolidated growth.
- Debt equity ratio (standalone) rose to 0.78 from 0.38 a year ago, increasing leverage.
- EPS declined 12.7% YoY, tracking PAT decline.
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