Check Before You Invest : Torrent Power Ltd

Snapshot

Q.1 Which industry/sub-sector does Torrent Power Ltd belong to?

Torrent Power Ltd belongs to the Power sector, operating specifically within the Power Generation/Distribution segment.

Q.2 Is Torrent Power Ltd a good quality company?

Torrent Power Ltd is a good quality company, based on a consistently good 10-year financial track record.

Q.3 Is Torrent Power Ltd undervalued or overvalued?

Torrent Power Ltd appears Overvalued, as its key valuation ratios are above with their past averages.

Q.4 Is Torrent Power Ltd a good buy now?

Torrent Power Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Torrent Power Ltd?

Torrent Power Ltd revenue growth is 9.8% for FY-2025, which is below its 5-year CAGR of 10.27%, indicating slower growth.

Q.2 Return on capital employed (ROCE) of Torrent Power Ltd?

Torrent Power Ltd Return on capital employed is 17.44% for FY-2025, which is above its 5-year historical median of 15.69%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.3 Return on Asset of Torrent Power Ltd?

Torrent Power Ltd Return on Asset is 9.37%, which is above its 5-year historical median of 6.52%, indicating improved asset utilization efficiency.

Q.4 Return on Equity (ROE) of Torrent Power Ltd?

Torrent Power Ltd Return on equity is 19.33% for FY-2025, which is above its 5-year historical median of 15.6%, indicating the business is making better use of its shareholders capital.

Q.5 Cash conversion cycle of Torrent Power Ltd?

Torrent Power Ltd Cash conversion cycle is 13 days, in line with its 5-year historical median of 13 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover	0.72	0.72
ROE	19.33	15.6
ROCE	17.44	15.69
Cash Conversion Cycle	13 days	13 days

Q.6 Gross Profit margin of Torrent Power Ltd?

Torrent Power Ltd Gross profit margin which is the profit after deduction of direct costs, is 19% for FY-2025, which is below its 5-year median of 21.2%, indicating decreasing margins.

Q.7 Operating Profit Margin of Torrent Power Ltd?

Torrent Power Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 19.87% for FY-2025, which is below its 5-year median of 22.48% indicating decreasing margins.

Q.8 Net Profit Margin of Torrent Power Ltd?

Torrent Power Ltd Net Profit Margin is 13.01% for FY-2025, is above with its 5-year median of 11.17%, indicating increasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin	19	21.2
Operating Profit Margin	19.87	22.48
Net Profit Margin	13.01	11.17

Q.9 Debt to Equity ratio of Torrent Power Ltd?

Torrent Power Ltd Debt-to-Equity ratio is 0.36, which is lower with the industry average of 0.78, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Torrent Power Ltd?

Torrent Power Ltd Debt to cash flow from operations is 1.49, which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Torrent Power Ltd?

Promoters hold 51.09% of the Torrent Power Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Torrent Power Ltd vs industry peers?

Torrent Power Ltd revenue CAGR is 10.27%, compared to the industry median CAGR of 6.32%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth	9.8	6.3
Gross Profit Growth	16.8	4.6
Operating Profit Growth	15.4	2.1
Net Profit Growth	58.6	9.5

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover	0.72	0.26
ROE	19.33	10.18
ROCE	17.44	10.95
Cash Conversion Cycle (days)	12.92	69

Valuation & price assessment

Q.1 Stock return of Torrent Power Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 22.6% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	22.6%	33.3%	47.3%	16.9%

Q.3 Valuation ratios of Torrent Power Ltd vs historical?

The current P/E is higher that its historical median.

Q.4 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	26.84	24.27	27.19
Price to Book	4.49	3.05	1.80
Price to Sales	3.93	2.15	6.78
EV to EBITDA	18.05	9.86	13.53

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