Torrent Power share price target: Why Jefferies sees 37% upside on this stock 

Jefferies in a fresh note said Torrent Power’s management plans to add 3 GW of pumped storage projects (PSPs) by FY29. The brokerage said Torrent Power has a strong track record in improving operational efficiency in its power distribution business, while its healthy balance sheet and regulated return on equity (ROE) from the distribution business lower the company’s overall risk profile. Jefferies sees 37 per cent potential upside on Torretn Power.

"We forecast 13 per cent FY26-30E Ebitda CAGR, driven by renewable capacity addition and steady growth in T&D," Jefferies said.Jefferies said its target price on Torrent Power at Rs 1,780 values the company at 15 times estimated September 2028 EV/Ebitda, a premium to its 14 times target multiple for JSW Energy.

Jefferies said it has not factored in plans to add 3 GW of PSPs in its estimates for FY29E-30, which leaves scope for upside. It said transmission infra unavailability is leading to delays in commissioning timelines though its estimates had already factored delays.

"On the thermal side, Torrent Power has acquired 1.4 GW Nabha Power which we have factored in our estimates from 2HFY27E onwards. It should account for 17 p cent of capacity, 42 per cent of units generated and 11 per cent of Ebitda in FY28E. The company is also developing a 1.6 GW thermal plant in Madhya Pradesh (MP) for which majority of land is in place and equipment has been ordered," Jefferies said.

The foreign brokerage added that the plant is tied-up with MP discom for 25-years at a healthy tariff of Rs 5.8 per unit and the management targets to commission the plant in 6-7 years.

"Evacuation challenges to remain in near term. We expect 13 per cent Ebitda CAGR over FY26-30 led by 36 per cent CAGR in RE Ebitda. Buy," Jefferies said.

Jefferies said Torrent Power has a healthier balance sheet versus JSW Energy and its regulated ROE distribution business relatively reduces the overall risk profile of the company.