Torrent Power Limited — Credit Ratings, 07-02-2025: Credit Rating

Torrent Power Limited has reaffirmed its strong credit ratings, with long-term bank loan facilities and non-convertible debentures rated at “CRISIL AA+/Stable” and short-term bank loan facilities as “CRISIL A1+.” This stability is supported by robust financial performance, with EBITDA increasing to ₹3,066 crore compared to ₹2,406 crore in the same period last year. Contributing factors include healthy power demand leading to enhanced sales in merchant markets and reduced T&D losses across distribution areas.

Despite a year-over-year adjusted profit after tax decline to ₹1,895 crore from ₹2,162 crore, marking a PAT margin drop to 6.9%, the company’s financial position remains solid. The strategic focus on regulatory and renewable business segments continues to drive stable cash flows, enhancing profitability prospects in the medium term.

Operational costs increased due to expansion plans, but manageable at a net debt to EBITDA ratio of 2.2 times as of March 31, 2024. The company's ambitious capex of ₹22,000-25,000 crore in renewable projects poses risks but is expected to be funded through a healthy debt-equity mix. With net leverage set to peak in fiscal 2026, maintaining sound capital structure remains critical.

In summary, Torrent Power Limited presents a stable investment outlook, characterized by strong operational metrics and financial resilience amidst expansive growth plans. A hold position is advisable as the company navigates its project pipeline while capitalizing on market conditions.