Stock Of The Day: Torrent Power —Analysts View, Key Levels To Watch
Torrent Power's stock has risen 3.96% in a month and surged 127.89% in a year.
Torrent Power Ltd. has received a letter of award for setting up of a 300-megawatt grid-connected wind-solar hybrid project.
The letter of award for the project worth Rs 3,650 crore was given by Torrent Power Ltd. – Distribution Unit, according to an exchange filing.
Shares of the company were trading 6.05% higher at Rs 1,225.85 per share on the NSE, compared to a 0.21% fall in the benchmark Nifty 50 as of 10:13 a.m. on Monday.
Torrent Power's stock has risen 3.96% in a month and surged 127.89% in a year.
Key Levels To Watch
Resistance level: Rs 1,287.5 (Life high).
Support: Rs 1,064.5 (Three-week low).
New Order Win
For the hybrid project, the set tariff charged by the power utility provider for the project will be Rs 3.65 per kilowatt-hour of electricity generated. The project is to be commissioned within 24 months from the power purchase agreement and the contract period will be of 25 years from the commissioning of the project, according to an exchange filing.
The annual capacity utilisation factor, which refers to the ratio of the actual electrical energy produced by a power plant over a specific period to the maximum possible electrical energy it could produce, shall not be less than 50%, it said.
In order to meet the 50% CUF requirement, Torrent Power plans to install 480 MW of wind and solar capacity against the contracted capacity of 300 MW. The rated power capacity of wind and solar will be in the ratio of 2:1.
Earnings Visibility
Torrent Power has won many orders in the fourth quarter of the financial year so far that provide significant earnings visibility over the near to long term:
The company has secured an order from the Maharashtra State Electricity Distribution Co. for the supply of 306 MW of power from a Solar PV Project. The project is valued at Rs 1,540 crore, with a tariff set at Rs 3.10 kWh.
The company received an order for supplying 770 MW of power from gas-based power projects from March 16 to June 30. The minimum revenue expected by the company is Rs 440 crore.
The company received an order from Railway Energy Management Co. for the supply of 100 MW round the clock renewable power at a tariff of Rs 4.25 per Kwh. The project is to be commissioned in 24 months at a contract period of 25 years.
The company received a letter of intent from PFC Consulting Ltd. to establish an interstate transmission scheme for the power from RE Projects in Solapur, Maharashtra, of 1,500 MW. The contract period is of 35 years and the annual transmission charges are set at Rs 50 crore.
Street View
Out of the 11 analysts tracking the company, three have a 'buy' rating on the stock, two recommend 'hold' and six maintain 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 21.7%.
