Torrent Power shares surge 14% to hit one-year high; here's why

Shares of Torrent Power LTd zoomed 13.51 per cent to scale their one-year high of Rs 1,071.60 in Thursday's trade. At this price, the multibagger stock has rallied 148.69 per cent from its 52-week low of Rs 430.90, a level seen on January 30 last year.

Today's sharp uprward move in the share price came after the company entered into multiple pacts with the Gujarat government. Torrent Power said it has signed four non-binding Memorandum of Understandings (MoUs) with the Gujarat government under the 10th edition of Vibrant Gujarat Global Summit.

"Through the four MoUs, Torrent Power has proposed total investments of Rs 47,350 crore (around $5.70 billion). The proposed investments are planned to be made in the areas of renewable energy, green hydrogen and power distribution and are expected to contribute significantly towards the development of the State and creation of large-scale employment opportunities," it stated in a BSE filing.

The company said, "One of the four MoUs comprises of 3,450 MWs of Solar Power Projects & 1,045 MWs of Hybrid Power Projects to be set up in the districts of Banaskantha, Jamnagar, Patan and Surendranagar entailing a proposed investment of Rs 30,650 crore."

"The second MoU entails investment of Rs 4,500 crore in development of the infrastructure of a solar park for 7,000-MW Solar Power project to be set up in Banaskantha district. The third MoU is for setting up a Green Hydrogen/Green Ammonia production facility with a capacity of 100 KTPA to be set up in Banaskantha/Dahej with total proposed investment of Rs 7,200 crore," it added.

Torrent Power further mentioned that the fourth MoU pertains to investment of Rs 5,000 crore in its distribution business in the cities of Ahmedabad, Gandhinagar, Surat, Dahej SEZ and Mandal Becharaji SIR (MBSIR).

On technical setup, immediate support on the counter could be seen at Rs 1,000. On the higher side, the stock may climb up to Rs 1,200 level in the near term.

Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One, said, "Torrent Power has been in a secular uptrend, hovering well above all its significant EMAs (Exponential Moving Averages) on daily time frame. The stock looks poised to continue its northward journey in uncharted territory for an immediate potential upside of Rs 1,080-1,100. While on the downside, any short-term blip towards Rs 1,000-950 should augur well for the bulls."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, "Support will be at Rs 1,000 and resistance at Rs 1,050. A decisive close above Rs 1,050 level may trigger a further upside till Rs 1,100. Expected trading range will be between Rs 925 and Rs 1,125 for a month."

AR Ramachandran from Tips2trades said, "Torrent Power looks bullish but also overbought on daily charts and a close above resistance of Rs 1,070 could lead to target of Rs 1,187 in the near term. Support will be at Rs 998."

DRS Finvest founder Ravi Singh said, "The stock may see Rs 1,200 level in the near term. Keep stop loss placed at Rs 950."

As of September 2023, promoters held 53.57 per cent stake in the company.

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