Torrent Power Limited delivered exceptional financial performance in Q3FY26, with net profit surging 93.20% year-on-year to ₹712.16 crore. The integrated power utility company's strong results reflect improved operational efficiency and favorable market conditions during the quarter ended December 31, 2025.

Financial Performance Highlights

The company's quarterly performance showed significant improvement across key financial metrics. Revenue from operations increased 7.38% to ₹5,096.71 crore compared to ₹4,746.26 crore in Q3FY25. Total income, including other income of ₹156.58 crore, reached ₹5,253.29 crore for the quarter.

Nine-Month Performance

For the nine months ended December 31, 2025, Torrent Power maintained strong momentum with net profit growing 21.69% to ₹2,143.21 crore from ₹1,761.21 crore in the corresponding period last year. Revenue from operations remained relatively stable at ₹17,370.01 crore compared to ₹17,220.21 crore in the previous year.

Cost Management and Operational Efficiency

The company demonstrated effective cost management during the quarter. Total expenses decreased to ₹4,393.04 crore from ₹4,323.47 crore in Q3FY25, representing a marginal increase of 1.61%. Key expense components included electrical energy purchased at ₹2,213.42 crore, fuel costs of ₹567.18 crore, and purchase of stock-in-trade at ₹574.05 crore.

Finance costs declined significantly to ₹191.30 crore from ₹231.63 crore in the previous year, reflecting improved financial management. Depreciation and amortization expense increased to ₹294.15 crore from ₹268.88 crore, indicating continued capital investments.

Board Decisions and Capital Initiatives

The Board of Directors approved several key decisions during their meeting held on February 10, 2026:

The interim dividend of ₹15 per equity share will be paid on 50,39,03,543 equity shares of ₹10 each. The company also approved raising funds through Non-Convertible Debentures up to ₹7,000 crore in one or more tranches via private placement.

Asset Performance and Impairment Assessment

The company's net carrying value of Property, Plant & Equipment and Right-of-Use assets includes ₹1,130.79 crore pertaining to the 1,200 MW DGEN Mega Power Project at Dahej, Gujarat. This amount is net of impairment loss of ₹2,300.00 crore provided in earlier years. The company conducted an impairment assessment as of December 31, 2025, and concluded no further impairment provision is necessary.

Earnings Per Share Performance

Earnings per share showed remarkable improvement, reaching ₹14.13 for Q3FY26 compared to ₹7.56 in Q3FY25. For the nine-month period, EPS increased to ₹42.53 from ₹36.47 in the corresponding period last year, demonstrating consistent value creation for shareholders.

Torrent Power Limited has received a credit rating reaffirmation from CRISIL Ratings, maintaining its strong financial standing in the power sector. The rating agency confirmed the company's long-term rating at 'CRISIL AA+/Stable' and short-term rating at 'CRISIL A1+' across various debt instruments and banking facilities.

Rating Reaffirmation Details

CRISIL Ratings reaffirmed the ratings on February 24, 2026, covering a comprehensive range of financial instruments:

Strategic Acquisition and Expansion

The rating agency highlighted Torrent Power's execution of a Securities Purchase Agreement on February 16, 2026, to acquire Nabha Power Ltd from L&T Power Development Ltd. This strategic acquisition involves:

This acquisition will expand Torrent Power's operational capacity from approximately 5 GW to 6.4 GW and mark its entry into the northern Indian power market.

Financial Performance Highlights

The company demonstrated strong financial performance with significant improvements in key metrics:

The improvement in earnings was primarily driven by robust power demand, resulting in high sales in merchant markets and the invocation of Section 11 of the Electricity Act for gas-based plants.

Capital Expenditure and Growth Plans

CRISIL noted the company's ambitious capital expenditure plans exceeding ₹60,000 crore during fiscal 2026-2032. The capex will be funded through a debt-to-equity ratio of 70:30 or 75:25, with majority of the expenditure staggered and aligned with project commissioning timelines.

Key Projects in Pipeline:

• Renewable projects of approximately 3.8 GWp under implementation (₹24,000-25,000 crore)
• Two new transmission projects (₹1,270 crore)
• Pumped storage projects of 3 GW (₹14,000 crore)
• Greenfield thermal project of 1.6 GW in Madhya Pradesh (₹22,000 crore)

Operational Excellence

The company maintains strong operational efficiency with transmission and distribution losses among the lowest in the country:

Torrent Power serves more than 4.2 million consumers across domestic, industrial, and commercial divisions, maintaining 100% collection efficiency in key distribution areas including Ahmedabad, Gandhinagar, Surat, and Dahej SEZ.

Rating Outlook and Risk Factors

CRISIL maintains a stable outlook, citing the company's diversified business risk profile and strong liquidity position. However, the rating agency noted potential challenges including exposure to project implementation risk and the absence of long-term power purchase agreements for the 1,200-MW Dahej gas power plant.

The net leverage is expected to increase over the medium term, potentially exceeding 3.50 times in 2028 and peaking above 4.00 times in fiscals 2029-2030, before moderating as new capacity becomes operational and generates cash flows.