Torrent Power Outlines ₹10,000 Crore FY27 CapEx And ₹1,000 Crore Nabha EBITDA Guidance

Market snapshot: Torrent Power has released a robust capital expenditure and operational roadmap, signaling aggressive expansion in renewable energy and thermal consolidation. During its Q1 FY27 earnings call, the company guided to a capital expenditure of approximately ₹10,000 crore for renewable projects in FY27. Furthermore, its recently acquired 1,400 MW Nabha Power plant is projected to contribute around ₹1,000 crore in steady-state annual EBITDA.

Data Snapshot

• The planned capital expenditure for all renewable energy projects in FY27 is projected at approximately ₹10,000 crore.
• Nabha Power's steady-state annual EBITDA contribution is estimated to reach around ₹1,000 crore.
• The company has 4.6 GW of renewable energy projects under implementation with an estimated pipeline cost of ₹29,600 crore.
• The progressive renewable capacity commissioning target is set at 1.2 GW for FY27 and 1.4–1.6 GW for FY28.

What's Changed

• Torrent Power's renewable capital expenditure is set to scale up significantly to a planned ₹10,000 crore in FY27, compared to the total FY26 capital expenditure of ₹8,720 crore.
• The newly consolidated Nabha Power asset will begin contributing steady cash flows of ₹1,000 crore in annual EBITDA, adding a resilient utility margin compared to the previous volatile merchant thermal performance.
• Consolidated net profit declined 12.66% YoY to ₹638.85 crore in Q1 FY27 from ₹731.40 crore in Q1 FY26, heavily impacted by a 38.12% surge in quarterly finance costs (to ₹292.99 crore) from debt-funded investments.

Key Takeaways

• Aggressive Renewable Buildout: Torrent Power's planned ₹10,000 crore CapEx for FY27 underscores its commitment to scaling its clean energy portfolio, targeting 1.2 GW commissioning in FY27.
• Thermal Asset Integration: The completion of the ₹3,632.35 crore acquisition of Nabha Power Limited in June 2026 adds a high-performing 1,400 MW supercritical coal asset, providing highly predictable, availability-based EBITDA of around ₹1,000 crore annually.
• Medium-Term Execution Roadmap: With 4.6 GW of renewable projects under implementation, the clear commissioning timeline across FY27 to FY29 provides strong revenue visibility.
• Leverage and Finance Cost Headwinds: The massive investment pipeline has doubled the company's debt/equity ratio to 0.97, leading to a 38% surge in Q1 FY27 finance costs which pressured the bottom line.

SAHI Perspective

While Torrent Power's near-term profitability is being squeezed by elevated finance costs and LNG supply disruptions, the long-term strategic trajectory remains robust. The management's dual-engine strategy—scaling up high-margin renewables while acquiring steady, cash-accruative thermal assets like Nabha Power—positions it well for India's energy transition. The key to value unlocking lies in executing the 4.6 GW renewable pipeline on schedule despite grid connectivity challenges, and optimizing gas procurement to revive the gas-based generation segment.

Market Implications

The utility sector is witnessing a capital-intensive shift towards green power. Torrent Power's massive CapEx plans will likely compel peers to accelerate their clean energy investments. For the stock, while near-term earnings may experience volatility due to interest cost drag, the creation of highly predictable, long-term cash flows from Nabha Power and the commissioned RE assets will offer downside support.

Trading Signals

Market Bias: Neutral

Although the ambitious renewable guidance and Nabha Power's ₹1,000 crore EBITDA projection provide solid medium-term growth visibility, Q1 FY27 earnings showed a bottom-line contraction (PAT down 12.66% YoY) due to rising finance costs and elevated debt leverage (debt/equity at 0.97). This warrants a neutral stance until the CapEx begins converting into operational cash flows.

Overweight: Utilities

Underweight: Power Generation

Trigger Factors:

• Timeline of grid connectivity approvals for under-construction RE projects.
• Successful integration and quarterly performance of Nabha Power.
• Stabilisation of global LNG spot prices (currently near $20/MMBtu) to improve merchant margins.

Time Horizon: Medium-term (3–12 months)

Industry Context

India's power demand is projected to scale rapidly, with peak electricity demand estimated to hit 388 GW by FY32. This has triggered an unprecedented national push to replace 50% of installed capacity with non-fossil fuel sources by 2030. Private power majors are ramping up capital deployment to secure market share, resulting in a highly competitive bidding landscape for SECI, discom, and C&I hybrid projects.

Key Risks to Watch

• Transmission & Grid Delays: Execution of the 4.6 GW renewable pipeline remains highly dependent on timely grid connectivity and transmission infrastructure development.
• Fuel Supply Volatility: Geopolitical disruptions affecting LNG supply chain availability could continue to weigh on the company's gas-based thermal plants.
• Rising Debt Service Costs: Aggressive debt-funded CapEx has significantly increased leverage, and any delay in project commissioning could stress cash flows.

Recent Developments

On June 25, 2026, Torrent Power completed the acquisition of Nabha Power Limited from L&T Power Development Limited for a final consideration of ₹3,632.35 crore. The acquisition includes NPL's 1,400 MW supercritical coal-fired plant in Punjab, which operates under a stable, long-term 25-year Power Purchase Agreement with Punjab State Power Corporation Limited.

Closing Insight

Torrent Power is navigating a transition phase where heavy capital expenditure is temporarily masking operational strength. Investors who look past the near-term leverage headwind will find a highly diversified utility platform with a secure, regulated thermal base and a massive, front-loaded renewable pipeline.

High Performance Trading with SAHI.