Buy Torrent Power, target price Rs 437: Motilal Oswal

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Buy Torrent Power, target price Rs 437:  Motilal Oswal


Motilal Oswal has buy call on with a target price of Rs 437. The current market price of Torrent Power Ltd. is Rs 380.95.

Torrent Power Ltd., incorporated in the year 2004, is a Mid Cap company (having a market cap of Rs 18275.45 Crore) operating in Power sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 2990.11 Crore, down -5.56 % from last quarter Total Income of Rs 3166.10 Crore and down -4.02 % from last year same quarter Total Income of Rs 3115.48 Crore. Company reported net profit after tax of Rs 321.73 Crore in latest quarter.


Investment Rationale
Over the past few months, TPW has been taking consistent steps towards leveraging its expertise (as well as Balance Sheet) within the Renewable and Distribution space. While thebrokerage keeps a keen eye on details and value accretion from these projects, the medium term story for existing businesses remains intact. Demand and collections at its Distribution franchise has recovered, and profitability is expected to bounce back in FY22. Its gas plants remain well placed, with gas tie ups and the recent offtake of Unosugen PPA. Continued capitalization within regulated Distribution would continue to aid earnings.

Promoter/FII Holdings
Promoters held 53.6 per cent stake in the company as of Dec 30, 2020, while FIIs held 9.1 per cent, DIIs 19.5 per cent and public and others 17.9 per cent.





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