Torrent Power Ltd reported total revenue of ₹6,476.95 crores in Q4 FY26, representing a 5.4% quarter-over-quarter decline from ₹6,847.02 crores in Q3 FY26 and 1.4% year-over-year decrease compared to ₹6,570.69 crores in Q4 FY25. The company's profit after tax (PAT) stood at ₹331.49 crores, marking a 49.4% quarter-over-quarter decline from ₹654.74 crores and a 69.2% year-over-year decrease from ₹1,077.22 crores in the previous year. Earnings per share (EPS) recorded ₹6.31, down 50.5% QoQ and 70.0% YoY from ₹21.03. The company's profit before tax (PBT) was ₹547.36 crores, declining 32.0% QoQ from ₹804.97 crores and 11.6% YoY from ₹619.35 crores. Tax expense increased to ₹215.87 crores, up 43.7% QoQ from ₹150.23 crores, contributing significantly to the profit decline.
Indian stock markets opened in positive territory on Thursday, May 14, following a flat previous session. According to reports from ET Now, the BSE Sensex was trading 310 points higher at 74,906.25, while the NSE Nifty was up 147 points at 23,559.60. However, Torrent Power shares crashed sharply following the weak Q4 results announcement, reflecting investor concerns over the significant profit decline and operational challenges. This negative market reaction provided a stark contrast to the overall positive opening sentiment across other sectors.
Torrent Power demonstrated effective cost management during Q4 FY26, with total expenses of ₹5,929.59 crores, down 1.9% QoQ from ₹6,042.05 crores in Q3 FY26 and 0.4% YoY from ₹5,951.34 crores in Q4 FY25. This reduction in expenses indicates the company's focus on operational efficiency, though it was not sufficient to offset the larger decline in revenue, leading to lower profitability metrics. The company's commitment to operational efficiency and technological innovation continues to be reflected in these cost control measures, which are critical factors in their financial performance.
Elara Capital has maintained a sell rating on Torrent Power with a target price of ₹1,385 following the company's Q4 results. As reported by ET Now, the company's Q4 revenue declined 1 per cent year-on-year while EBITDA rose 2 per cent. The PAT was impacted by high deferred tax credit base, and the company plans to double operational capacity to 10 GW with FY26 capex at ₹294 billion and ₹800 billion planned over the next five years. Gas-based plants continue to operate at subdued PLFS, and brokerage raises FY27 and FY28 earnings estimates modestly, though valuation is seen as limiting further upside. The recent quarterly results showing a 69.2% YoY PAT decline and 69.2% YoY EPS decline further support the bearish outlook.
The sharp decline in Torrent Power shares following the Q4 results announcement reflects investor concerns over the company's operational challenges and profitability decline. Despite the company's efforts to maintain cost control and expand capacity, the significant year-over-year decline in both revenue and profitability has raised questions about the sustainability of its business model. The company's plans for capacity expansion and substantial capital expenditure over the next five years will be closely watched by investors and analysts for signs of improved operational efficiency and return on investment. Recent market developments show mixed sentiment toward the stock, with some analysts recommending it for long-term investment while others maintain cautious outlooks.
