Torrent Power Q2 FY27 Earnings Call: Guides Rs. 10,000 Cr FY27 Renewable Capex, Nabha EBITDA Seen at Rs. 1,000 Cr (TORNTPOWER)

Torrent Power Ltd held its Q2 FY27 earnings call on November 04, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Steady Quarter with One-Offs Muddying the Print

• Q2 FY 2026-2027 PBT of Rs.1,131 crore, up 15% YoY from Rs.979 crore in Q2 FY 2025-2026; adjusted PBT of Rs.1,008 crore, up 6% YoY from Rs.948 crore. Effective tax rate rose to 26% from 24%, attributed to the switch to the new tax regime and certain subsidiaries becoming profitable.
• Rs.123 crore of non-recurring items in Q2 FY 2026-2027: Rs.115 crore indemnity income credit at Nabha Power from the seller toward the mega status claim (recoverable under the share purchase agreement), Rs.52 crore gain on unwinding LNG hedges after IOCL declared force majeure, and Rs.44 crore liquidated damages/write-off on the SECI 12 project termination.
• Generation EBITDA of Rs.7.1 billion in Q2 FY27 vs Rs.3.7 billion in Q1 FY27; adjusted for one-offs (Rs.115 crore Nabha, Rs.52 crore IOCL), Q2 generation EBITDA was ~Rs.540-543 crore vs ~Rs.460 crore in Q2 FY 2025-2026 — Rs.83 crore of YoY growth, ~Rs.55 crore from higher merchant profits.
• Distribution & transmission EBITDA of Rs.99 crore: distribution contribution up Rs.76 crore on higher ROE from asset capitalization and a higher ROE rate under the new tariff regulations; a newly commissioned transmission project added Rs.22 crore; franchise volumes up 3%.
• Renewables EBITDA of Rs.148 crore, driven by improved PLF across wind and solar and newly commissioned capacity; margin was lower primarily due to liquidated damages paid — adjusting for Rs.44 crore, management characterized the margin as healthy.
• Higher depreciation and finance cost reduced PBT by Rs.270 crore — depreciation up on renewable capitalizations; finance cost up on Nabha acquisition borrowings, consolidation of Nabha's ~Rs.3,000 crore debt, and capitalization during the quarter.
• CFO Vikas Poddar's closing assessment — Q2 FY 2026-2027 was a "steady quarter" with "very good revenue growth" and a "very stable margin" (qualitative only, no figures cited).

Nabha Integration Anchors Generation Growth; Merchant Spread Intact

• Nabha Power posted Rs.142 crore EBITDA in Q2 FY 2026-2027 on a lease accounting basis (~Rs.196-200 crore on a PPE/normal accounting basis, with Rs.54 crore of capital charge not captured under lease accounting); revenue was ~Rs.1,100 crore.
• Recurring Nabha EBITDA guidance of ~Rs.1,000 crore for full year FY 2026-2027, consistent with guidance given at the time of acquisition; Q2 EBITDA per unit was ~Rs.0.5-0.6/unit vs ~Rs.0.8/unit historically, due to timing differences management expects to iron out. Management steered to PAF over PLF (fixed cost is PAF-linked) and affirmed similar levels should continue.
• Merchant sales of ~530 MUs in Q2 FY 2026-2027 at ~Rs.24 per unit realization, with spread of ~Rs.4.7-5 per unit; merchant/deviation contribution was Rs.55 crore lower than Q1 FY 2026-2027.
• Elevated gas prices constrained merchant volumes despite robust industry-wide power demand in H1 FY 2026-2026; profitable merchant selling was confined to evening peak hours, as daytime solar influx drives merchant prices down. Management noted the company still made "decent profits" on merchant sales.
• Wind PLFs were considerably higher in Q2 FY 2026-2027 despite a weaker monsoon; management attributed this to good wind resource and noted wind PLF is typically not monsoon-linked, as turbines stop beyond certain velocities.
• Management expects FY 2026-2027 to be a low power demand scenario, making merchant sales difficult at prevailing high LNG prices, and does not expect major medium-term contracts in Q3-Q4 FY 2026-2027 (seasonally lower demand quarters); some contracts could come beyond that, contingent on LNG prices.

CY 2027 Cargoes Booked; Variable-Priced, Earmarked for Distribution

• 10 cargoes per annum booked starting CY 2027, split between Torrent Gas and Torrent Power, with 4-5 cargoes per annum expected to be received by Torrent Power in CY 2027, each containing 3.2 TBtu of gas.
• Cargoes are priced as a slope linked to Brent dated crude (variable); management declined to disclose slope numbers but stated Torrent Power's slopes are "very competitive" — long-term gas contracts are variable-priced, not fixed-price, so booked cargoes do not lock in gas below market cost.
• Cargoes are earmarked for the licensed distribution businesses and are expected to cover their PPA gas liability; use for DGEN will be considered only if the distribution businesses do not lift them.
• For FY 2027-2028 merchant sales, management intends to lock in additional cargoes depending on how the merchant market and LNG prices behave.
• Gas PLF not quantified for H2 FY 2026-2027 — management said PLF is a function of prevailing LNG prices and merchant power prices, and under the 62 cited PPAs, PLF does not move profitability.

1-1.2 GW FY27 Commissioning on Track; 4.4 GW Under Implementation

• 240 MWp commissioned in Q2 FY 2026-2027 (Q2 seasonally lower due to rains; ~300 MW+ in H1 FY 2026-2027), taking aggregate installed capacity to 6.8 GW as of 30 September 2026: 2.7 GW gas, ~1.8 GW coal, ~2.3 GWp renewables.
• 4.4 GW of renewable projects under implementation as of 30 September 2026; management expects progressive commissioning of 1-1.2 GW in FY27, 1.4-1.6 GW in FY28, and the balance by FY29.
• Three new wind LOAs in Q2 FY 2026-2027 with 25-year terms: 100 MW from SJVN at Rs.3.89/unit, 150 MW under SECI 20 at Rs.3.85/unit, and 250 MW from MPPMCL at Rs.4.16/unit.
• Q2 FY 2026-2027 capex of Rs.1,850 crore (vs Rs.1,550 crore in Q1 FY27 and Rs.1,630 crore in Q2 FY 2025-2026); cumulative renewable capex of Rs.10,000 crore against total project capex of Rs.30,600 crore up to 30 September 2026; FY27 renewable capex expected at ~Rs.10,000 crore vs ~Rs.6,500 crore incurred in FY26.
• Anupur Thermal Power Project (1.6 GW) — BTG and BOP contracts executed during Q2 FY 2026-2027, cumulative capex Rs.800 crore; Solapur transmission project expected to be commissioned in FY 2026-2027, cumulative capex Rs.400 crore.
• Both the pumped storage project and the coal-based power plant achieved financial closure on an SPV basis via long-term loans with tenors of 20-25 years, per CFO Vikas Poddar.
• C&I renewables — with multiple PPAs in place, year-wise commissioning guidance is difficult, but projects will be commissioned progressively quarter-on-quarter over the next 2 years, and all currently tied-up C&I projects are expected to be commissioned by FY29 (FY 2028-2029).

SECI Termination, PSP Concerns and Receivables Build-Up

• SECI 12 300 MW wind project terminated at the PPA stage, citing evacuation challenges and an unattractive tariff (analyst-cited Rs.2.97); outflow of Rs.44 crore in Q2 FY 2026-2027 including ~Rs.40 crore of liquidated damages. The project itself continues — the company retains the opportunity to enter a fresh PPA or deploy capacity on the merchant market, and management does not view this as a significant negative.
• Maharashtra 3 GW PSP concerns — news reports flagged forest-cutting concerns; management said the project is at a very preliminary stage, its position has been explained via a press release, and it is engaged with stakeholders. Management termed the matter "still very dynamic" and said it is too premature to evaluate alternate sites.
• Receivables rose almost 80% as of Q2 FY 2026-2027, attributed predominantly to the Nabha acquisition plus seasonal build-up in licensed distribution during the high-demand Q1-Q2 season; Nabha-related receivables will remain on the balance sheet, while seasonal receivables should normalize over FY 2026-2027.
• EBITDA margin compression flagged by analyst Yash Kabra — CFO explained power purchase cost is a full pass-through in licensed/franchise distribution (and gas and coal generation), so higher power cost raises revenue proportionately and mathematically lowers margin; he advised against judging margins in isolation since 60% of the business comes from distribution. No numeric margin outlook was offered for FY 2026-2027 or beyond.
• On parallel distribution licensing — asked about a private sector player being granted a 25-year parallel distribution license for areas around Gurgaon (with pushback from the state), management said there is nothing on parallel licensing traction it can comment on as of now.
• 800 MW capacity planned in lieu of the retiring Ahmedabad coal-based plant (per analyst Mohit Kumar, ICICI Securities) — allocation has been received, but management said it is too premature to comment.

Volume Run-Rate and Renewables Returns

• Distribution volume run-rate of 4%-5% (period unspecified) — management declined formal forward-looking guidance but indicated this steady-state run-rate, describing it as comparable to GDP growth with an elasticity factor that typically improves electricity demand.
• Q2 FY 2026-2027 distribution revenue growth came despite largely flat units sold, driven by power purchase cost pass-through rather than volume; if power purchase cost declines, distribution revenues would decline correspondingly, but volumes would not be impacted.
• Profitability levers in licensed distribution — volume growth (which drives higher capex going forward) and savings in T&D and O&M expenses.
• Renewables returns catch-up — CFO stated the profitability share from solar, wind and hybrid is not high enough to materially lift consolidated ROC/ROE; new renewable projects typically start with slightly lower ROC/ROE and catch up one to two years after commissioning (period unspecified).
• Thermal pipeline — beyond the Madhya Pradesh project, management evaluates incoming bids as they come and would want to participate where commercial levels are attractive; on balance-sheet capacity, it said these are long-gestation contracts and it is comfortable with its leverage position.
• A newly operationalized merchant wind project is achieving very good realizations; management expects renewables EBITDA margins to increase going forward (period unspecified).