Torrent Power's profit falls 10.75% YoY despite wider operating margin
Lower other income and higher interest and tax costs offset a 0.17-point year-on-year improvement in operating margin.
Filed 03 Aug 2026, 17:11 IST · after market close · Torrent Power Ltd (TORNTPOWER)
Key takeaways
- Consolidated net profit fell 10.75% year on year to Rs 661.85 crore as interest expense rose 38.12% and the tax rate increased 3.72 percentage points.
- Operating margin widened 0.17 percentage points year on year because revenue grew 2.75% while expenses grew 2.54%.
- Net profit nearly doubled sequentially as the tax rate fell 10.98 percentage points, even though interest expense rose 16.33%.
Price around the results
Operating profit improved, but financing and tax costs cut earnings
Torrent Power's consolidated operating profit rose 3.70% year on year, with revenue growth narrowly ahead of expense growth. That operating improvement did not flow through to net profit: interest expense increased 38.12%, while the tax rate rose 3.72 percentage points. Other income contributed 8.72% of pre-tax profit, so it was not the main support for reported earnings.
Margin recovered from Q4, but remains below utility peers
Sequentially, revenue rose 26.82% and expenses rose 25.29%, allowing operating margin to recover by 0.99 percentage points. The margin has now moved up from 17.94% in Q4FY26, after falling from 20.70% in Q3FY26, while the year-on-year change remains a modest 0.17-point improvement. Torrent Power's 18.93% margin was 18.09 percentage points below the 37.02% median for 14 Utilities peers that had reported, placing it fourth from the bottom.
Nabha acquisition adds to a wider capacity pipeline
The company reported that it acquired 1,400 MW of Nabha Power effective June 25, 2026. Management said operational capacity is estimated to rise from about 6.6 GWp to 12.3 GWp, and that the renewable portfolio is targeted to reach about 6.25 GWp. The presentation also said the 450 MW contracted and 830 MWp installation-capacity TPL-D renewable project is planned for progressive commissioning from FY27 to FY29.
No immediate market reaction after the after-close filing
The results were filed after market close, so there is no current share-price reaction to assess. After the last eight results, the stock fell six times and rose twice, with a median absolute move of 3.67%, making a mostly negative post-results pattern more typical than a positive one. The company also said it is developing a 3,000 MW pumped-storage hydro project in Raigad at an estimated cost of about Rs 14,000 crore and has executed a 2,000 MW / 16,000 MWh storage agreement with MSEDCL for 40 years.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹8,124 cr | ₹6,406 cr | +26.82% | +2.75% |
| Other income | ₹81 cr | ₹71 cr | +13.80% | -22.94% |
| Expenses | ₹6,586 cr | ₹5,257 cr | +25.29% | +2.54% |
| Operating profit | ₹1,538 cr | ₹1,149 cr | +33.81% | +3.70% |
| Operating margin (%) | 18.93% | 17.94% | — | — |
| Interest | ₹293 cr | ₹252 cr | +16.33% | +38.12% |
| Depreciation | ₹400 cr | ₹421 cr | -4.89% | +2.60% |
| Profit before tax | ₹925 cr | ₹547 cr | +69.03% | -6.10% |
| Tax | ₹263 cr | ₹216 cr | +21.99% | +8.03% |
| Net profit | ₹662 cr | ₹331 cr | +99.66% | -10.75% |
| EPS (₹) | ₹12.68 | ₹6.31 | +100.95% | -12.67% |
Operating margin of 18.93% compares with a Utilities sector median of 37.02% across 14 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The company acquired 1,400 MW of Nabha Power effective June 25, 2026.
Guidance & outlook
- Operational capacity is estimated to grow from about 6.6 GWp to 12.3 GWp.
- The company targets increasing its renewable portfolio to about 6.25 GWp.
Expansion
- The TPL-D renewable project has 450 MW contracted capacity and 830 MWp installation capacity, with commissioning planned progressively from FY27 to FY29.
- A 3,000 MW pumped storage hydro project in Raigad, Maharashtra is under development at an estimated cost of about ₹14,000 crore.
- The 1,600 MW Anuppur ultra-supercritical coal project has an estimated cost of ₹23,000 crore.
New orders
- The company has executed an agreement with MSEDCL for 2,000 MW / 16,000 MWh of storage capacity for 40 years.
Competition
- Distribution losses in Surat and Ahmedabad/Gandhinagar were 3.35% and 2.77%, respectively, described as among the lowest in the country.
What to watch
- Whether operating margin stays above 18.93% after the Q1FY27 recovery.
- Whether interest expense moves from Rs 292.99 crore after its 38.12% year-on-year increase.
- How the 1,400 MW Nabha Power acquisition is reflected in operating performance.