Building on a Legacy of Excellence
Dear Stakeholders,
As we celebrate our visionary founder and my father Mr. U. N. Mehta's birth centenary
year, we reinforce our commitment to carry forward his vision. Building further on our
strong foundation, we are committed to becoming a world-class organisation renowned for
reliability and sustainability in the power sector. Dedicated to excellence, we strive to
enhance energy access and drive operational efficiency by embracing the latest
technologies while promoting environmental stewardship and empowering communities.
Evolving Indian Power Sector
The Indian power sector is witnessing rapid transformation driven by the accelerated
pace of economic activities. Along with economic growth and subsequent growth in energy
demand, there has been a significant shift in sources of power generation, owing to a
greater emphasis on climate change. Driven by increasing industrial activities and
household demand, the sector saw a significant 7.6% growth in FY24. The peak power demand
reached an all-time high of 243 GW, which is further expected to go up significantly due
to rising temperatures across the country along with the country's projected GDP growth of
over 7% in the upcoming year. The country's energy mix is rapidly changing but supply-side
constraints remain a key concern. While renewable energy
capacitieshaveexpandedsignificantly, they are still insufficient demand for power, the
expansion of thermal capacity has become imperative. The Government plans to add 93 GW of
coal capacity by FY32. On the other hand, renewable expansion continues to be a mainstay
for the Government as it aligns with global efforts to address climate change. The
Government of India has implemented favourable policies to promote renewable power
generation and is also focusing on newer clean energy solutions like green hydrogen, pump
hydro storage and battery storage. The number of capacities bid out are on the rising
trend, and with the stated target of achieving 500 GW by 2030, bids for capacity additions
are expected to accelerate. Considering constraints due to the intermittent nature of
traditional ‘vanilla' solar and wind projects, the Government is prioritising on
Hybrid/Round-the-Clock (RTC)/ Firm Dispatchable Renewable Energy (FDRE).
Equally important is the other end of the spectrum, i.e.,
Transmission and Distribution. Transmission capacity addition must keep pace with the
growth in power generation capacity. It is estimated that substantial investment of I4.75
trillion is required by 2027 to develop transmission infrastructure to meet the growth of
power. The distribution segment, connecting the last mile, is witnessing customer-centric
reforms such as 24x7 power availability. Modernisation of this segment will bring in
greater efficiencies that benefit both the consumers as well as investors.
"Torrent is committed to contributing towards nation building by aligning our
aspirations with national priorities in the sectors where we have a presence."
Operational and Financial Performance
Driven by robust power demand, Torrent Power had a transformative year, with
progressive developments across its existing operations and growth initiatives. Our
generation and distribution businesses experienced strong growth with all our thermal and
renewable generating assets witnessing higher Plant Load Factors (PLFs). While, the easing
of natural gas prices helped our gas-based power plants to contribute to the increasing
demand for power this year; renewable PLF also improved due to better wind speeds and
superior plant performance.
With a commitment to increasing the share of green energy in our portfolio, Torrent
Power made significant strides during the last year across areas of renewables, green
hydrogen and pump storage hydro. During the year, we participated in auctions for
renewable projects (including hybrid) and were to meet the growing demand. To meet the
growing able to secure contracts of approx. 956 MW with high CUF requirements. With the
addition of PPAs secured during the year, we have approx. 3 GWp of renewable capacities
under construction involving total capex outlay of ~I18,000 Crore. Our total renewable
capacity is expected to reach ~4.3 GW over the next 2 to 3 years; nearer to our
medium-term stated goal of 5 GW.
Aligning with Government of India initiatives, during the year we started work on a
pilot project to blend 2.5% Green Hydrogen (GH2) with natural gas in City Gas Distribution
(CGD) networks, which would be one of the largest blending projects in the country,
marking a pivotal milestone in our GH2 initiatives. Further, the Company is actively
pursuing development of Pumped Hydro Storage Projects in the states of Maharashtra and
Uttar Pradesh, with an expected outlay of more than I25,000 Crore. These projects
underscore our dedication to sustainable energy solutions and innovation in the power
sector.
In the transmission sector, our Company is building two new transmission assets one
linked to Khavda renewable energy park in Gujarat and another at Solapur in Maharashtra,
involving investment of approximately I1,300 Crore.
In the distribution sector, we catered to a peak demand of 5,311 MW and distributed 30
billion units during the past year, registering a sales growth of 4%. We were able to
achieve 5% distribution losses, which are comparable to global standards. Our distribution
utilities are among the best run utilities, which is also reflected in the rankings of
private and public sector utilities by the Ministry of Power. I am pleased to share that
our Surat and Ahmedabad distribution units both scored >99 marks out of 100 and secured
the 2nd and 3rd positions, respectively, in the ranking.
In terms of financial performance, the PAT for FY24, adjusted for a one-time higher net
LNG trading gain of I 672 Crore in FY23, registered a growth of 27% as compared to the PAT
for FY23. This growth was driven by positive performance on all our key parameters, such
as better PLFs, reduction in AT&C losses and improved performance compared to
normative parameters.
Considering the performance of the Company, dividend of
40% has been recommended for FY24. With this, the total shareholder return for FY24
works out to 169%, considering the appreciation in stock price.
Paving Way for Accelerated Growth
As we move ahead, our primary objective is to enhance our green energy portfolio. We
envision a significant expansion our renewable generation capacity, aiming to scale up to
5 GW within the medium term through organic as well as inorganic routes. We also intend to
make inroads into the green hydrogen and pump storage businesses. We have made initial
progress by being awarded 18 KTPA capacity under GoI's PLI Scheme for Green Hydrogen and
have identified project sites with the potential for ~8 GW of pump storage hydro capacity.
At our distribution business, our primary focus is enhancing the customer experience
through improved reliability and reducing distribution losses. Leveraging our demonstrated
expertise in distribution operations, we are committed to generating tangible value
through investments in enhancing the quality of our network. We are also keen to pursue
any new distribution privatisation and franchisee opportunities to increase the footprint
of our distribution business. We also plan to continue to participate in competitive
bidding processes for both inter-state and intra-state transmission projects.
Environmental, social and governance considerations remain an integral part of our
business strategy, underpinning our commitment to responsible corporate practices and
enhancing our non-financial performance.
Creating an Enabling Environment for Our People
I must take the opportunity to thank our employees for their determination to turn the
organisation's aspirations into reality. We remain committed to our mission to foster a
workplace culture that promotes continuous learning and career advancement while
championing diversity and equality, free from any biases.
A central pillar of our focus has been maintaining a relentless commitment to health
and safety. Our objective is to conduct operations with zero occupational health and
safety incidents. We adhere to global best practices and implement behaviour-based systems
to reinforce our safety culture and uphold stringent processes and procedures.
Giving Back to Society
We remain committed to inclusive development initiatives for communities in and around
our operations. Our social initiatives are carried out in the identified Focus Areas of
Community Health Care; Education & Knowledge
Enhancement and Art & Culture and Ecology.
To honour our Founder's legacy in his birth centenary year, the Mehta family has
pledged to donate a sum of I5,000 Crore over the next five years to the UNM Foundation.
This contribution will be over and above the statutory CSR contributions of the Torrent
Group companies.
The UNM Foundation will focus its efforts in Healthcare,
Education, Ecology, Art, Culture and Social well-being and other activities that may
serve the basic premise of benefitting the underprivileged.
The details of the Company's CSR initiatives are explained in detail in this Report.
I am grateful for the continued support and strategic guidance from our esteemed Board
members in steering our organisation towards sustained success. To our valued customers,
thank you for your ongoing trust and partnership; we are committed to delivering
excellence. For our shareholders and investors, the potential for further growth is
evident. As India advances on its growth trajectory, we are poised to play a pivotal role
in powering this vision.
Best wishes,
Samir Mehta
Chairman