Add Torrent Power, target price Rs 540: ICICI Securities

ICICI Securities has add call on Torrent Power with a target price of Rs 540. The current market price of Torrent Power Ltd. is Rs 514.3.

Torrent Power Ltd., incorporated in the year 2004, is a Mid Cap company (having a market cap of Rs 24739.75 Crore) operating in Power sector.

Torrent Power Ltd. key Products/Revenue Segments include Income From Power Supply, Traded Goods and Other Operating Revenue for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 6797.21 Crore, up 2.70 % from last quarter Total Income of Rs 6618.62 Crore and up 84.52 % from last year same quarter Total Income of Rs 3683.69 Crore. Company reported net profit after tax of Rs 484.19 Crore in latest quarter.

Investment Rationale
The brokerage increases SoTP-based target price to Rs540 (earlier: Rs502) and upgrade TPW from Hold to ADD, as we roll-over to FY25. While it believes growth over the next two years will likely be driven by distribution businesses due to further reduction in T&D losses, and addition of RE capacities, medium-term growth may be sluggish. The stock is currently trading at FY24E P/E of 15.1x and P/B of 2x.


Promoter/FII Holdings
Promoters held 53.57 per cent stake in the company as of 30-Jun-2022, while FIIs owned 6.79 per cent, DIIs 21.18 per cent.