Torrent Power shares will react to Q4 profit fall on higher costs, drag in generation

Shares of Torrent Power

Ltd. will be in focus on Wednesday, May 13, after the company reported a mixed set of March quarter results, with profitability impacted by weakness in the generation business and higher finance-related costs.

Revenue for the quarter declined 0.8% to ₹6,406 crore from ₹6,456 crore in the year-ago period. EBITDA rose 1.7% to ₹1,149.3 crore compared to ₹1,130.5 crore last year, while margin improved to 17.9% from 17.5%.

However, net profit plunged 70% to ₹318.2 crore from ₹1,060 crore a year earlier.

The key drag came from the generation segment, which reported an EBIT loss of ₹38.9 crore against an EBIT profit of ₹233.8 crore in the corresponding quarter last year.

The company referred to improved operational performance in its licensed and franchised distribution businesses, while the renewable energy segment continued to remain strong.

On the downside, higher interest and depreciation expenses weighed on earnings as project implementation activity continued to increase.

Torrent Power also said that its gas-based generation business remained under pressure amid a dynamic power demand environment and volatility in gas markets.

The company expects its operational capacity to expand from 5.1 GWp to 10.6 GWp going forward.