The shares of leading power generation firm Torrent Power saw significant gains yesterday after the company announced a sizable new contract win.
According to reports, Torrent Power secured agreements from Maharashtra State Electricity Distribution Company Limited (MSEDCL) to supply a total installed capacity of 2,000 megawatts (MW) from upcoming energy storage projects.
The orders cover 1,500MW under a pre-existing letter of intent as well as an additional 500MW capacity. Under the energy storage facility agreements, Torrent Power will provide MSEDCL with 2,000MW of contracted capacity capable of scheduled discharge for up to 8 hours daily. MSEDCL will supply the input energy to charge the storage systems.
News of the major long-term supply deal from MSEDCL triggered a strong positive market response. Torrent Power shares opened nearly 6% higher on the BSE, reaching an intraday high of Rs. 1,983.70, before closing the day up over 9% from the previous value.
The spike reflects investor confidence in Torrent Power’s ability to execute large renewable projects and long-term revenue visibility from tied-up capacity. The stock has performed well over multiple periods, rising over 15% in the past month, around 21% in the past six months, and an impressive 106% on a year-to-date basis.
By securing significant contracted capacity and linking assets to MSEDCL’s requirements, Torrent Power has augmented its order book as well as medium-to-long term business prospects. The contract win bolsters the company’s position as a leading provider of electricity to India’s growing power sector.
