Torrent Power Shines in Q2 FY26 with 48% Net Profit Surge Driven by Merchant Power Sales

Torrent Power Limited, a prominent integrated power utility in India, has reported a robust financial performance for the second quarter and half year ended September 30, 2025. The company announced a significant 48% year-on-year increase in its Total Comprehensive Income (TCI) for Q2 FY26, reaching 730 Crore compared to 492 Crore in Q2 FY25. This impressive growth underscores the company's strategic operational efficiency and its ability to capitalize on market opportunities.

The strong operational performance was primarily fueled by an increase in contribution from merchant power sales, including LNG sales, originating from its gas-based power plants. Additionally, a reduction in finance costs played a crucial role in boosting profitability, partially offsetting the rise in depreciation costs associated with capital expenditure and the commissioning of additional renewable generation capacity. Revenue from operations for Q2 FY26 stood at 7,876 Crore, marking a 10% increase from 7,176 Crore in Q2 FY25. The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also saw a healthy rise of 19%, reaching 1,583 Crore in Q2 FY26 from 1,332 Crore in the corresponding quarter of the previous year.

Strategic Expansions and Green Initiatives

Torrent Power's strategic vision is clearly reflected in its recent project developments. The company secured a Letter of Award from MP Power Management Company Limited for the long-term supply of power from a new 1,600 MW coal-based power plant in Madhya Pradesh. This 22,000 Crore project, featuring Ultra-Supercritical technology for high efficiency and lower emissions, is a significant step in expanding its thermal generation capacity. Unit 1 is slated for commissioning in 66 months and Unit 2 in 72 months from the PPA execution date, expected within the next two months.

Further demonstrating its commitment to the energy transition, Torrent Power, in collaboration with Torrent Gas, inaugurated India's largest hydrogen-natural gas blending initiative in Gorakhpur, Uttar Pradesh. This Green Hydrogen Plant, with an annual production capacity of 72 TPA, positions the Torrent Group at the forefront of green molecule integration within the City Gas Distribution sector, a crucial step towards decarbonization.

Robust Renewable Pipeline and Distribution Excellence

The company is aggressively expanding its renewable energy footprint, targeting an increase in its portfolio to approximately 5.4 GW. Currently, about 3.8 GW of renewable capacity is under installation, with various projects scheduled for progressive commissioning through FY26, FY27, and FY28. This includes significant projects under MSEDCL, SECI, and TPL-D, among others. Furthermore, Torrent Power is actively developing Pumped Storage Hydro (PSP) projects, with a total planned capacity of 8.4 GW, including a 3 GW project under construction in Raigad, Maharashtra, with an estimated cost of 14,000 Crore and an annual revenue of 1,680 Crore, expected by October 2028. These PSP projects are vital for grid stability and integrating intermittent renewable energy.

In the transmission segment, Torrent Power Grid Limited (TPGL) has been awarded projects for evacuating power from 4.5 GW RE projects in Khavda, Gujarat, and 1,500 MW RE power in Solapur, with expected implementations in FY26. The company's distribution business continues to showcase operational excellence, with distribution losses in licensed areas like Ahmedabad and Surat remaining among the lowest in the country (3.33% and 2.81% respectively in FY25). Franchisee areas like Bhiwandi have seen remarkable reductions in AT&C losses from 58% at takeover to less than 10% in FY25, highlighting effective management and customer service focus.

Outlook and Financial Health

Despite some challenges, such as lower Plant Load Factor (PLF) from existing wind power plants due to weather conditions and higher O&M expenses, Torrent Power's overall financial health remains strong. The company maintains a robust balance sheet with a Net Debt to EBITDA of 1.41x and Net Debt to Equity of 0.4x for FY25, indicating a disciplined approach to capital management. The management's focus on selective participation in tariff-based competitive bidding for transmission projects and evaluating brownfield opportunities further underscores its strategic prudence.

Torrent Power's Q2 FY26 performance reflects a company that is not only delivering strong financial results but also strategically positioning itself for future growth in India's evolving energy landscape. With significant investments in both conventional and renewable energy, coupled with a focus on operational efficiency and green initiatives, Torrent Power aims to continue its trajectory as a leading integrated power utility.