Torrent Power Limited – Dark Horse Series – 2

Torrent Power Limited is one of the leading brands in the Indian power sector. With an all-around experience in generation, transmission, and distribution of power, and a proven track record of implementing large power projects, the Company is the most experienced private sector player in Gujarat. The Company is also engaged in manufacturing and supply of power cables.

Company Background:

Torrent Power is one of the most efficient utility companies in the country. It distributes power as a licensee in the cities of Ahmedabad, Surat, Gandhinagar and Dahej SEZ (Gujarat) and a franchise in Bhiwandi (Maharashtra) and Agra (Uttar Pradesh). It is a pioneer of distribution franchisee business in India. It was the first company in India which was awarded distribution franchisee for Bhiwandi. It has, later on, got the franchise for Agra as well.

It has a generation capacity of 3334 MW with the lowest industry losses of 6.3%.

Share holding Pattern:

As on December 2017, 53.57% shares are being held by promoters. Rest are with the public.

Financials:

torrent power

 

Company’s last 10 years compound sales growth is at 12% with ROE at 12% as well. The company is making a profit year after year. Company’s operating profit is at 21% for the year ended 2017. In the power sector, there are very few companies which are making profit year on year.

Let’s have a look at the cash flow of the company.

torrent power cash flow

Income from operating cash flow is positive and maintained year on year. This shows how the company is able to run its revenue cycle.

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The company is giving a healthy deviant payout of 23%

 torrent power

Future Growth:

Electricity demand is increasing 14% YOY basis. Company’s revenue is expected to grow in the future. The company has recently awarded distribution license for Dholera city. It will soon start its project there.

On 8th March 2018, the company won 124.4 MW project from Maharashtra State Electricity Distribution Company.

All these positives put the company in a better position to perform in the long term.

CMP: 251.15 (NSE)

Content credits: BSE, Money control, Stock Screener for Indian Stocks: Screener.in

Disclosure: I have personally invested in this stock in a huge quantity.

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