Torrent Power Ltd. — Q1 FY27 earnings call

Thank you.

Good evening to all of you and thank you for joining earning cause of torrent power of Q1 FY27. We'll first take you the performance of the quarter thereafter we welcome the question and answer.

Next, we'll explain the performance of the company at PPT level first, and then we'll take you through the tax expenses separately.

Reported PBT for the quarter stood at ₹925 crores as compared to ₹985 crores in the corresponding quarter of last year, a reduction of ₹60 crores.

PBT for the corresponding quarter of the last year includes a non-recurring loss of ₹59 crores on account of non-case adjustment due to foreign currency fluctuations.

Adjusted over is one of PPT for the quarter stood at 925 crores as compared to 1 1044 crores. The comparable quarter of last year, a reduction of 119 crores on adjusted basis.

Tax express is during the quarter has increased by 28% as compared to 25% for the corresponding quarter of the last year. The increase is mainly on account of completion of tax already paid earlier availed under section 80IA for some of the units.

Business factors contributing to the performance are as follows. First, contribution from the thermal generation business remains resilient despite elevated gas prices arising from ongoing geopolitical tension in Middle East and increase in OEM expenses.

Adjustable non-recurring items in the corresponding quarter of the previous year, the business performance was lower by 123 crores primarily on account of three factors. First, despite elevated gas price during the quarter, the company maintained healthy operating margins in its merchant power operations. However, the gains from the merchant sales and LNG trading were lower by 87 crores.

During the quarter, we have undertaken upgrade exercise to our gas based plant to improve the plant flexibility and availability resulting into the increase in O&M expenses by 51 crores. Benefit of these are being demonstrated during the quarter whereby we are we were able to realize better margins on merchant power sales.

While some of the upgrades are implemented, implemented, others are being progressively rolled out in our gas gas unit, which will help us improve our margin realization going forward.

This will also help us manage the evolving operating environment, which has significantly changed recently on back of increased renewable energy penetration, requiring our unit to operate more frequently in a cyclical mode, respond to varying demand patterns.

These measures are expected to support higher availability, improve operating operational reliabilities, and optimization of long-term O&M costs, as well as despite the increasing flexibility of operating regimes.

Company on 25th June '26 consummated acquisition of Nahapara plant which contributed ₹15 crores in the quarter.

Lower contribution of thermal generation was partly offset by increase in gain from distribution and neighborhood segments.

The second reason on the distribution and transmission segment in total is is contributed 71% additional profit driven by three factors. First, receipt of favorable orders from the regulator supporting carrying cost of 41 crore. This is a normal course of business due to regulatory asset we have we we we have and we are getting the favorable regulatory orders.

Second, improve contribution from the operations by 19 crores supported by two factors. First, increase in ROE and ROCE on account of capitalization of assets and high and higher rate of returns on equity as per the new tariff regulations and other incentives. The third is, second is improved contribution from the distribution franchise business on back of improved volumes and increased tariff. Volume across the financial distribution business improved by 4%.

The third reason is additionally new commissioning transmission project has contributed ₹11 crores in criminal profit.

Coming to the renewable operations, we have renewable operations contribute 19 crores positive contributions.

Due to generation from newly newly recommissioned capacity and improved PLF across the wind and solar, both partially offsetted by gain in similar quarter previous in the similar quarter of the previous year and account of LPS income on delayed payments.

The fourth reason is other factors lowering the profit to 90 crores. There are two main reasons. First, increase in the finance cost on the back of higher capitalization and related borrowings. And second, increase in miscellaneous expenses and depreciation which was on account of higher capitalization mainly in debt renewal segments.

This completes the explanation of the financial performance during the quarter. Coming to the

Update of the various projects and implementations.

Renewable energy project of 70 megawatt got commissioned during the quarter taking up the aggregate install capacity install generation capacity of the company to 6.6 gigawatt as on 30th June 2026 comprising of 2.7 gigawatt gas based project, 1.8 gigawatt coal based project and 2.1 gigawatt renewable capacity.

First on renewable energy projects, as on 30th June '26, renewable energy equals to 4.6 gigawatts under implementation, which we expect to commission progressively as under.

One about 1.2 gigawatt capacity is expected to commission in FY current year FY27. Between 1.4 to 1.6 gigawatt capacity is expected to commission in Nexus which is FY28 and balance capacity in FY29.

CAPEX of 1550 crores was incurred during the quarter against 1200 crores of CAPEX in Q4 FY26 and 355 crores of CAPEX in Q1 of FY26. This is comparable quarter of the last year.

After total capex of 29,600 crores of in RE projects under implementation, cumulative capex of 8,800 crores has been incurred up to 30th June 26. In FY 27, total capex of approximately 10,000 crores expected to be incurred for all RE projects.

Moving on to the implementation under the Anukul thermal project of 1.6 gigawatt, the update is as under first. Activity are underway wherein following major milestones have been achieved. First, power cell power cell agreement executive with MC Power Management Company Limited. Second, letter of award issued to the BTG as well as balance of plan. Third, environment clearance received for the for the project. The fourth, the project is expected to be commissioned in next six to seven years. A total capex of

₹450 crores has been incurred as of April 30th, June 2026.

Coming on the firm storage hydro project of 3 gigawatt in Maharashtra, the update is,

The activities are underway wherein following major milestones have been achieved. First, energy storage facility agreement with MSC was executed. Later of award issued to the civil, hydro, mechanical and cyclist and second, electrical and mechanical cyclist. Environment and foreign clearance has been received for the project. The project is expected to commission in next three four three to four years and total expenditure of 1130 crores has been incurred to 30th June 2026.

It is a transmission project. Solapur is under implementation, expected to be commissioned this year. Cumulative capital of ₹330 crores has been incurred as on 30th June 2026.

Further details on the pipe and project have been summarized in our latest invessor presentation available on our website. That's all for the quarters. Now I request coordinator to open line for Q and A session. If you satisfy to stay safe and healthy. Thank you so much. Handing over to the operators.

So the Q1 we acquired on the 25th of June. So that is hardly five five days of income we have booked not for the entire quarter. So five days I would say was about

Total means very overall 15 plus profit we have booked in the in our in our as well not material amount we have booked because it's a five days operation we have consolidated in our books of accounts.

Because of the NABHA power project, about 3000 crores in the NABHA power book and about 3800 crores in the Torrent power book.

Okay.

Yes, exactly.

Cash flow business not on the reported because they are following the policy not in a cash flow business. I understand sir. They just see accounting with cash flow business here not on the reported business because reported business is adjusted a bit.

Yes, I just say beta, yes.

So differential you can see this number, but if you look at recollect that the last last year similar quarter we have a income about 47 crores of the LPS claim was available, which was not available in the current quarter. That is why you are seeing the differential number will be lower, otherwise on a standard basis number is higher as far as EBIDA is concerned.

R is ID S, R is ID R, I'm talking about.

What are you putting here?

Thermal basically coal we have incurred about 125 crores.

So, you Ahmedabad is a benchmark, I would say 10% is the growth which is comparable with the country's average, I would say. Surat being a industrial town, always growth will be not comparable with the overall demand growth, I would say.

Dahej is also an industrial area basically, so it's comparable to the Surat growth. ENS, GDS, there is some lower demand is an exceptional case, I would say. It's not a repetitive kind of a nature.

in terms of ATSC losses I would say in Agra particularly the last year similar quarter we have we got some good realization from our Agra Nigam Nigam Limited past realization we got which has which has reduced our ATSC loss substantially which is not the case in the current quarter. So that is what the difference I would say in ATSC losses.

Otherwise, the the material is not material different I would say as compared to the last. Agra is the main there is a substantial difference in Agra mainly because of the higher relaxation we have received in the comparable quarter of last year, which is not the case in the current quarter.

So differential lower profit is about 87 crores. That's what we have said. And we sold about 445 MUs in the merchant market in the current quarter.

Yes, yes, yes, yes.

potential for you. If you look at the demand pattern in the country where the peak demand and the summer demand will will always be there and now the peak demand period is also prolonging I would say. So during the evening time and the summer time we keep on getting this opportunity in the merchant market for our mutualized capacity and kind of capacity I would say. So being the when the gas price thing become normal we will keep on getting more opportunities are going forward I would say.

So as you know, as you are aware that the these all these project connectivity really means transmission line availability basically. Commission of the transmission line onward transmission line is bit of a issue and some of the some of them because of the ROW issues, which we are trying to work with the transmission utility to ensure see that the they should come their project on time so that our our project progress should also align with them, their timeline.

So, we expect about though first quarter our commissioning was 70 megawatt, but by two two we expect about 400 megawatt will get commission and the balance will happen in the H2 I would say. That is what that is what we are progressing.

Yes, exactly.

Okay.

Hello

So MGN power project is about 362 megawatt capacity and it is it we have a permission to run up to December 2030. And what has happened is since after December 30 it's not going to be in operation. So we we have requests and it's a basically plant available for the Ahmedabad distribution. So we request the state government for the coal allocation. Double the coal allocation of capacity of 362 megawatt. So that coal state government has

approve the coal allocation, but they have to they have requested the central government for the coal allocation. Once the central government approves the coal allocation for this plant, he planned to set up a about close to about 8 megawatt unit to replace the engine power plant. That is what the plan is.

So work in progress kind of thing right now, but the core allocation is being done by the state government. We require the central government for the allocation. Once the allocation is available, then we form up our plan and implement one unit of IT net make out for the to declare the Amgen power project.

So we are participating almost all the projects but as we as you know our philosophy restrict our meeting at some point of time so that we can at least achieve in IRR. So that is what the philosophy we continue to adopt going forward also. We our benchmark will be the IRR not the to acquire the more and more capacity. So that is what philosophy we are following and we continue to follow that philosophy going forward.

Yeah.

So it is mainly because of transition availability because of the we plan our execution based on the onwards transition line. So it coincides the transition line and transition line is basically large like PGCRIS and other places are developing. So we plan our execution in a way so that we can there will not be any.

CAPEX which will be ahead of the CAPEX spanning, not ahead of the transition line availabilities.

Nabha about your first question about Nabha PLF quarterly about about 85% PLF. So that is what generally the PLF level of Nabha regarding the reduction in salary cost is maybe a one of items maybe because of the capitalization we have capitalized more salary cost there is no other specific reason that the issue is continuing to go coming down.

So, three cargos which was contracted for the summer meeting, summer demand was already acquired and getting used also. So, as for the balance period, we we bank on the

Basically spot cargo, so we are ranking the spot cargo. So as and when the opportunity is available, we import the cargo on a spot basis. But the next round was yes, we have a contract of 10 cargos available. So which will be at a lease with the brand trade not at the spot price because spot price is higher at at about $20 kind of a thing. So it is not affordable. So we we plan our purchase in a way that it is affordable to the consumer and we can able to get

better margin basically. It's affordable in the merchant market also so that we can have a reasonable margin available in the merchant market also. So this year only it's a merchant market we are looking at plus whatever summer demand was there we have we have we have completed we have honored our summer demand by these importing free cargos.

About total CAPEX is about 2000 2300 crores all put together. Renewable is 1550 crores and thermal CAPEX is 125 crores and transmission is about 120 crores and light distribution is about 500 crores.

Voice is not audible, your voice is not audible.

Yeah, you can, you can go ahead.

Ah yes, exactly. So echo is coming.

Yes

I think UP will come post election only. So they have tried to they have attempt to do it before election but I think considering the the agitations and all those things I think it is going to come post election UP election. the the as you know there is a state subject thing is there but we expect something if come something will come possibly in the state of Maharashtra. otherwise there is no concrete things I would say

In the franchises right now.

So, if you look at $20, your very real cost will be about ₹13 kind of a thing. So though it's very difficult I would say, but since we have our old cargos available, we are able to buy at a competitive rate in bits and pockets I would say, which will which will help us in selling the targeting the merchant market, peak demand period kind of a thing. Basically sub demand and peak demand kind of market. We are able to sell at a much higher rate.

then earn our contribution in the on those market right. So $20 is quite challenging I would say at this rate.

Okay.

Yes

And certain slots also, the slot on a continuous 2-3 hours visit. It's a very challenging $20 to sell at a sell power at a $20 MIBTU is quite challenging I would say.

cargos was mainly for our distribution business. So, for making the summer demand. So, but though any opportunity is available, we keep on buying in a small lot, not in a big cargo, full cargo kind of a quantity.

Thank you everybody for joining Torrent Power Hour calls. Stay safe and healthy. Thank you so much.

Thank you.