Torrent Power profit drops 69.23% YoY as tax rate normalises
Sequential revenue fell 5.49% and operating margin lost 2.76 percentage points, while the stock's 8.79% fall was unusually large for its results history.
Filed 12 May 2026, 17:21 IST · after market close · Torrent Power Ltd (TORNTPOWER)
Key takeaways
- Consolidated net profit fell -69.23% YoY to Rs 331.49 cr as the tax rate swung 113.37 percentage points from last year's -73.93%.
- QoQ revenue fell -5.49% while expenses declined only -2.20%, cutting operating margin by 2.76 percentage points.
- The stock fell -8.79% in the first session after results, versus a median absolute post-results move of 3.29% across eight prior reactions.
Price around the results
Tax swing masks steadier operating performance
Consolidated revenue was nearly flat YoY, falling -0.78%, while expenses declined faster at -1.30%; this lifted operating profit by 1.67% and operating margin by 0.43 percentage points. Net profit nevertheless fell -69.23% because the tax rate moved to 39.44% from last year's -73.93%, when a tax credit inflated reported earnings. Interest rose 6.56% and depreciation 8.19% YoY, while other income accounted for 12.95% of pre-tax profit, making the earnings mix less purely operational.
Q4 margin reversal follows five-quarter rise
Sequential revenue fell -5.49%, but expenses declined only -2.20%, so operating profit dropped -18.09% and operating margin narrowed by 2.76 percentage points. The 39.44% tax rate was 20.78 percentage points above Q3FY26, adding to the 49.37% QoQ decline in net profit. This reversed the prior run of quarterly margin increases from 17.10% in Q3FY25 to 20.70% in Q3FY26.
Operating margin remains below utility peer median
Torrent Power's 17.94% operating margin was 17.25 percentage points below the 35.19% median for 17 Utilities peers that had reported the same quarter. It ranked third from the bottom on this measure, despite being 0.43 percentage points better than in Q4FY25.
Renewables and storage form the expansion pipeline
The presentation said a 259 MW, or 310.8 MWp, MSEDCL solar project was commissioned by March 31, 2026, while the Khavda transmission project was commissioned in February 2026. Management said operational capacity is estimated to rise from approximately 5.1 GWp to 10.6 GWp, and that the renewable portfolio is targeted at approximately 5.95 GWp. The company also said its renewable pipeline totals approximately 2.3 GW of contracted capacity and 4.3 GWp of installation capacity, while a 3,000 MW pumped-storage project in Raigad is under development.
Post-results fall was unusually large
The stock fell -8.79% in the first session after the results, with volume at 1.93 times its reference level, and remained down -9.86% after 15 sessions. That compares with five declines and three rises across the last eight results reactions, whose median absolute move was 3.29%, making this reaction materially larger than usual. A corporate-action overlap was flagged, so the full move cannot be attributed cleanly to the results alone.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹6,406 cr | ₹6,778 cr | -5.49% | -0.78% |
| Other income | ₹71 cr | ₹69 cr | +2.50% | -38.01% |
| Expenses | ₹5,257 cr | ₹5,375 cr | -2.20% | -1.30% |
| Operating profit | ₹1,149 cr | ₹1,403 cr | -18.09% | +1.67% |
| Operating margin (%) | 17.94% | 20.70% | — | — |
| Interest | ₹252 cr | ₹255 cr | -1.10% | +6.56% |
| Depreciation | ₹421 cr | ₹413 cr | +2.02% | +8.19% |
| Profit before tax | ₹547 cr | ₹805 cr | -32.00% | -11.62% |
| Tax | ₹216 cr | ₹150 cr | +43.69% | — |
| Net profit | ₹331 cr | ₹655 cr | -49.37% | -69.23% |
| EPS (₹) | ₹6.31 | ₹12.76 | -50.55% | -70.00% |
Operating margin of 17.94% compares with a Utilities sector median of 35.19% across 17 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -8.79% | -8.94% |
| Next session | -8.76% | — |
| 5 sessions | -5.32% | -6.52% |
| 15 sessions | -9.86% | — |
| 30 sessions | -11.51% | — |
Volume on the results session was 1.93× its 20-day average.
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 Khavda transmission project was successfully commissioned in February 2026.
- A 259 MW, or 310.8 MWp, MSEDCL solar project was commissioned as of March 31, 2026.
Guidance & outlook
- Operational capacity is estimated to grow from approximately 5.1 GWp to 10.6 GWp, backed by renewable capacity additions.
- The company targets increasing its renewable portfolio to approximately 5.95 GWp.
Expansion
- The company won a Solapur transmission project for evacuating 1,500 MW of renewable power, with expected implementation in H1 FY27.
- Renewable projects in the pipeline total approximately 2.3 GW contracted capacity and 4.3 GWp installation capacity, costing about ₹27,830 crore.
- The company is developing a 3,000 MW pumped storage hydro project in Raigad, Maharashtra, at an estimated cost of approximately ₹14,000 crore.
- The pumped storage project has 2,000 MW or 16,000 MWh tied up for 40 years, with SCOD in October 2028.
- The company plans total pumped storage capacity of 8.4 GW across Maharashtra and Uttar Pradesh, including 3 GW under construction.
New initiatives
- The company is evaluating brownfield opportunities to strengthen its transmission presence.
Problems & risks
- The SECI XII renewable project has applied for an SCOD extension.
What to watch
- Whether operating margin recovers from 17.94% after the 2.76-percentage-point QoQ decline.
- Whether the tax rate moves away from 39.44% after last year's -73.93% rate.
- Updates on the approximately 2.3 GW contracted renewable pipeline and the Solapur transmission project targeted for implementation in H1 FY27.