TORNTPOWER - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 20 Dec 25, 11:16 pm
Back to Fundamental ListFundamental Rating: 4.1
| Stock Code | TORNTPOWER | Market Cap | 64,253 Cr. | Current Price | 1,275 ₹ | High / Low | 1,640 ₹ |
| Stock P/E | 22.2 | Book Value | 370 ₹ | Dividend Yield | 1.52 % | ROCE | 16.9 % |
| ROE | 18.7 % | Face Value | 10.0 ₹ | DMA 50 | 1,292 ₹ | DMA 200 | 1,350 ₹ |
| Chg in FII Hold | -0.97 % | Chg in DII Hold | 0.75 % | PAT Qtr | 746 Cr. | PAT Prev Qtr | 685 Cr. |
| RSI | 38.9 | MACD | -7.92 | Volume | 4,50,275 | Avg Vol 1Wk | 3,61,177 |
| Low price | 1,188 ₹ | High price | 1,640 ₹ | PEG Ratio | 0.42 | Debt to equity | 0.38 |
| 52w Index | 19.3 % | Qtr Profit Var | 60.8 % | EPS | 57.3 ₹ | Industry PE | 21.9 |
📊 Financials: Torrent Power (TORNTPOWER) demonstrates strong fundamentals with ROCE at 16.9% and ROE at 18.7%, reflecting efficient capital utilization. Debt-to-equity is moderate at 0.38, indicating a balanced capital structure. Quarterly PAT improved (₹746 Cr vs ₹685 Cr), showing earnings growth of 60.8%. EPS stands at ₹57.3, supporting profitability strength.
💰 Valuation: Current P/E of 22.2 is in line with the industry average of 21.9, suggesting fair valuation. Book value is ₹370, giving a P/B ratio of ~3.45, which is moderate. PEG ratio of 0.42 indicates growth is reasonably priced. Dividend yield at 1.52% provides decent income support compared to peers.
🏢 Business Model & Advantage: Torrent Power operates in power generation, transmission, and distribution, with strengths in renewable energy integration and efficient operations. Competitive advantage lies in diversified energy portfolio, strong presence in Gujarat and Maharashtra, and consistent profitability. Moderate leverage and improving earnings add resilience.
📈 Entry Zone: Current RSI at 38.9 suggests near oversold conditions. An attractive entry zone lies between ₹1,200–₹1,250, closer to support levels and below DMA 50 & DMA 200, offering margin of safety.
🕰️ Long-Term Holding: Suitable for long-term investors due to strong fundamentals, diversified energy exposure, and consistent profitability. Fair valuations make staggered accumulation advisable during dips.
Positive
- ✅ Strong ROCE (16.9%) and ROE (18.7%)
- ✅ Moderate debt-to-equity (0.38)
- ✅ Robust quarterly PAT growth (+60.8%)
- ✅ Diversified energy portfolio with renewable integration
Limitation
- ⚠️ P/B ratio (~3.45) moderately high
- ⚠️ RSI near oversold zone, showing weak momentum
- ⚠️ Stock trades below DMA 50 & DMA 200
- ⚠️ Dividend yield modest at 1.52%
Company Negative News
- 📉 Reduction in FII holdings (-0.97%)
- 📉 Weak technical momentum (MACD -7.92)
- 📉 52-week performance subdued (Index 19.3%)
Company Positive News
- 📈 Increase in DII holdings (+0.75%)
- 📈 Strong quarterly PAT growth (+60.8%)
Industry
- 🌐 Power sector supported by demand growth and renewable energy transition
- 🌐 Industry PE at 21.9, showing Torrent Power trades at fair valuation
Conclusion
🔎 Torrent Power is a fundamentally strong company with balanced leverage, robust return metrics, and diversified energy exposure. Valuations are fair, making accumulation near ₹1,200–₹1,250 attractive for margin of safety. Long-term holding is favorable given sector growth and renewable energy integration, provided investors manage entry timing carefully.
Would you like me to extend this with a peer benchmarking overlay against NTPC, Adani Power, and Tata Power, or a sector rotation basket scan to identify undervalued power sector peers for compounding?
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