Torrent Power scrip MAY give good returns in one year

The Russian invasion on Ukraine has roiled the global markets and triggered a panic button among market participants. As the world was coming out of the Omicron crisis and battling the high inflation and US Fed policy on impending rate hikes, this has rattled Indian equity investors. Russia’s attack on Ukraine on last Thursday was a full-fledged attack on Indian equities with the benchmark index, the BSE Sensex dropping by nearly 5% or 2700 points to close below 55000 levels. It is still unclear what situation would emerge in the next few days and weeks, but it is certainly not good for our economy and country. Defence Analysts expect the Russia-Ukraine war to not be a long drawn one as a sustained rise in oil and food prices could have an adverse impact on the Indian economy. Foreign investors have been pulling out of the Indian stock markets for the last few months on the back of profit booking but Indian retail investor has been quite bullish and adding their surplus funds in a systematic manner. Indian equities shrugged off war concerns on Friday last and the stock market rebounded in line with the global markets. Investors were seen cherry picking their favourite stocks at lower levels considering the oversold position prevailing in the market.
Technical and Fundamental equity analysts have been recommending and researching their own stocks which could do well in 2022. Torrent Power is one stock which is being recommended by many fund managers and analysts for solid returns over the next one year. Torrent Power ranks among the best run power utility and one of the largest companies in the power sector. The company is promoted by the Rs 21,500 crore diversified Torrent Group in the business of Pharma and Power. It is an integrated power utility with interest in power generation, transmission, distribution and manufacturing and supply of power cables. The company foresaw the prospects in the power sector by acquiring 2 of the country’s oldest utilities—The Surat Electricity Company Ltd and The Ahmedabad Electricity Company Ltd. Currently, these utilities are first rate power companies in terms of operational efficiencies and reliability of power supply. Torrent Power has a portfolio of coal based, gas based and renewable power plants with an aggregate capacity of 3879 MW. The company posted excellent Q3FY22 consolidated quarterly financial results with net sales at Rs 3767 crore up 27.59% from Rs 2952 crore as of December 2020.
Meanwhile the net profit climbed 14.85% to Rs 368 crore from Rs 320 crore as of December 2020 last year. Analysts and fund managers are quite bullish on the Torrent Power scrip currently quoting at Rs 465 and expect it to achieve a target price of Rs 625 in the next one year time frame.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.