Why Torrent Power Surges 8% To Hit All-Time High: Explained

Large cap company Torrent Power opened at Rs 634.35 apiece on Wednesday on the BSE and went on to hit all-time high of Rs 666.00 during the morning deals. This upward trend has been observed since the company and the Maharashtra government inked an MoU to build hydro projects totaling Rs 27,000 crore.

A Memorandum of Understanding (MoU) between Torrent Power Limited and the State of Maharashtra has been inked in order to develop three pumped storage hydroelectric projects with a combined capacity of 5,700 MW. During the building phase, the projects will require an investment of roughly Rs. 27,000 Crores and employ about 13,500 people. These projects will be carried out by Torrent during a five-year period.

Three locations, Karjat (3,000 MW) in Raigarh District, Maval (1,200 MW), and Junnar (1,500 MW) in Pune District, have been chosen by Torrent as the places where the projects would be implemented. All of the locations are off-stream, and the projects are designed to offer daily energy storage of at least six hours.

Currently, Torrent Power has a total installed generation capacity of about 4.1 GW, the majority of which comes from clean energy sources including gas (2.7 GW) and renewables (1.07 GW). Additionally, it is developing a renewable energy capacity of 0.7 GW. Renewable energy continues to be Torrent's primary priority in power generation.

The integrated power utility of the diversified Torrent Group, with group sales of Rs. 37,500 Cr (approximately USD 4.50 billion) and a group market cap of Rs. 87,000 Crore (approximately USD 10.50 billion), is Torrent Power. With presence throughout the whole power value chain of generation, transmission, and distribution, it is one of the largest corporations in the nation's power sector.

Torrent Power announced a consolidated net profit of Rs 483.93 crore in March 2023 quarter, up from a net loss of Rs 487.37 crore in the March 2022 quarter. From Rs 3,840.59 crore in the same quarter last year, its total income increased to Rs 6,133.70 crore in the quarter. From Rs 458.70 crore the previous fiscal year to Rs 2,164.67 crore in the fiscal 2023, the consolidated net profit increased. From Rs 14,492.65 crore in FY22 to Rs 26,075.97 crore this year, the company's total income grew.

For the fiscal year 2023, the board has recommended a final dividend of Rs 4 per equity share. A total payout of Rs 26 per equity share (including Rs 13 per equity share as a special dividend) for FY23 is calculated based on this final dividend plus an interim dividend of Rs 22 per equity share.

Commenting on the technical outlook of the stock, A R Ramachandran, Co-founder & Trainer-Tips2trades said "Torrent Power is bullish but also overbought on the Daily charts with next resistance at 673. Investors should book profits at current levels and wait for a dip near support of 556 to buy for better returns."

TORNT POWER had delivered almost 33% YOY returns and 13% return in 1 month and it is still bullish but a pullback possible. If we consider the price movement on spot chart it has broken its almost 2 years sideways cannel range and if we correlate it with previous range and upside movement it is a breakout of Flap pole Pattern which is very bullish in nature. So, from current price there is probability that pr ice could show more 150-250 points targets in near future. Yes, as we said a pullback is expected with almost 15-25% in total from current price.

So, if one should be ready for that too. 720/750/800/840/865/900 are the major points where trailing and partial profits booking should take place. Channel support is major for the price hence stop loss levels should be below this only, ideally 485 and CMP is 655. All major indicators like RSI & MACD are indicating an overbought zone but it is in momentum so, if you can manage the risk or can averaging in future if required (pullback) that it's fine to be part of this bullish momentum more upside move possible says V.L.A. Ambala (SEBI Registered Research Analyst), Stock Market Today (SMT).