Torrent Power's margin slips as costs and interest rise faster
Revenue grew 24.45% year on year, but expenses grew faster and operating margin fell 1.38 percentage points; lower sequential tax aided profit.
Filed 04 Nov 2026, 16:40 IST · after market close · Torrent Power Ltd (TORNTPOWER)
Key takeaways
- Consolidated operating margin fell 1.38 percentage points year on year to 17.74% as expenses grew faster than revenue.
- Net profit rose 26.61% sequentially, helped by a 2.57-percentage-point fall in the tax rate and higher other income.
- Interest expense rose 103.50% year on year, while other income contributed 22.04% of pre-tax profit.
Price around the results
Revenue growth did not translate into operating leverage
Consolidated revenue grew 24.45% year on year and 20.65% sequentially, but expenses increased faster at 26.58% and 22.43%, respectively. That pushed operating margin down 1.38 percentage points year on year and 1.19 percentage points from Q1FY27. The margin remains below Q2FY26's 19.12% after recovering from 17.94% in Q4FY26.
Higher interest and other income shaped reported profit
Interest expense more than doubled year on year, rising 103.50%, and increased 49.90% sequentially, putting pressure below operating profit. Other income rose 219.87% year on year and accounted for 22.04% of pre-tax profit, making it a material part of earnings quality. Sequential net profit growth of 26.61% was also helped by the tax rate falling 2.57 percentage points to 25.89%, although the year-on-year tax rate was 1.63 percentage points higher.
Margin trails the reported Utilities peer median
Torrent Power's 17.74% operating margin was 24.60 percentage points below the 42.34% median for the 17 Utilities peers that had reported the same quarter. The quarter therefore combined strong revenue growth with weaker cost conversion. The recent margin path has been uneven: it rose to 20.70% in Q3FY26 before falling to 17.94%, recovering to 18.93%, and then declining again.
No immediate market reaction after the post-close filing
The consolidated results were filed after market close, so there was no market reaction to report yet. In the stock's last eight result reactions, it fell seven times; the median absolute move was 3.64%, with the recorded moves ranging from -8.79% to +0.48%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹9,802 cr | ₹8,124 cr | +20.65% | +24.45% |
| Other income | ₹249 cr | ₹81 cr | +208.96% | +219.87% |
| Expenses | ₹8,063 cr | ₹6,586 cr | +22.43% | +26.58% |
| Operating profit | ₹1,738 cr | ₹1,538 cr | +13.03% | +15.44% |
| Operating margin (%) | 17.74% | 18.93% | — | — |
| Interest | ₹439 cr | ₹293 cr | +49.90% | +103.50% |
| Depreciation | ₹418 cr | ₹400 cr | +4.31% | +7.42% |
| Profit before tax | ₹1,131 cr | ₹925 cr | +22.22% | +15.49% |
| Tax | ₹293 cr | ₹263 cr | +11.18% | +23.25% |
| Net profit | ₹838 cr | ₹662 cr | +26.61% | +13.00% |
| EPS (₹) | ₹16.28 | ₹12.68 | +28.39% | +13.37% |
Operating margin of 17.74% compares with a Utilities sector median of 42.34% across 17 peers that have reported Q2FY27.
What to watch
- Whether operating margin can recover from 17.74% after the 1.19-percentage-point sequential decline.
- Whether expense growth falls below revenue growth after the 22.43% versus 20.65% sequential gap.
- Whether interest expense moderates after rising 49.90% sequentially.