"No Loss in November Stock"-- Torrent Power

Torrent Power is one of the leading company in the Indian power sector, promoted by the Rs. 18,500 crore+ Torrent Group. It is an integrated power utility and is one of the largest private sector players in India having interests in power generation, transmission, distribution and manufacturing and supply of power cables. The company has under-construction wind power plants aggregating to 338 MW. The gas based plants of the Company possess greater environmental value. Its current operations are in the states of Gujarat and Maharashtra and Uttar Pradesh. 

  • The India’s oldest utilities – The Surat Electricity Company Ltd and The Ahmedabad Electricity Company Torrent turned them into first rate power utilities in terms of operational efficiencies and reliability of power supply. 
  • The Company distributes power to over 3 million customers annually in its distribution areas of Ahmedabad, Gandhinagar, Surat and Dahej SEZ (Gujarat), in Bhiwandi (Maharashtra) and in Agra (Uttar Pradesh). 
  • The Cables Unit manufactures Power Control Cables and is one of the market leaders in HT Power Cable segment with a capability of up to 132 kV XLPE Cables. 
  • The company is developing their brown field project, the 382.5 MW gas based combined cycle power plant adjacent to the existing sugen plant, for which the EPC Contract has been awarded to Siemens. 

Fundamental Analysis 

Torrent Power Ltd is one of the leading brands in the Indian power sector. The company is engaged in generation, transmission and distribution of power. The company has a generation capacity of 1647.5 MW and distributes power to more than 3 million customers annually in Ahmedabad, Gandhinagar, Surat, Bhiwandi and Agra. The company has market capitalization of 12993.47 crore.The company is implementing a 1200 megawatt gas based power project at Dahej in South Gujarat. The project, called the DGEN Power Project, is being implemented in a phased manner starting with a 400 megawatt first phase. The company is also in the process of expanding the capacity of its SUGEN plant near Surat. 

  • Company has been maintaining a healthy dividend payout of 18.95% 
  • Company’s sales has increased in last quarter from 2440.80 to 3047.23 crore. 
  • Operation profit has been increased from 686.30 to 783.55 crore in last quarter. 
  • Net profit of the company increased from 134.52 to 197.90 crore. 
  • Company’s compounded profit growth in 3 years is 67.57%. 

Technical Analysis 

Torrent Power shows multiple technical signals to buy for the next month. It recovered from the support of strong trend line drawn from the lows of August 2014, June 2015, November 2016 and June 2017. It gained nearly 100 points or nearly 60 percent from 175 to 278 since the last week of June 2017. In the last week it has given strong break out of resistance level on weekly chart 
  • The stock has formed long-term double bottom pattern on weekly chart, the target of the pattern is 320 
  • It also breaks last 10 weeks volume highs and that confirms the break out 
  • ADX also signals start of an uptrend with crossover 
  • 273 was the earlier monthly resistance but the stock breached that and made a high of 277.95 
  • The stock closed near 270 and strong buying is expected above 273 
  • The Lot size for torrent power in derivatives is 6000 and stock may turn a jackpot for derivative traders so it is highly recommend for futures contract 

Buy Torrent Power November futures above 276 target 295-310 Stop loss below 255 holding period till Expiry of the contract 
Supports and Resistance (Monthly) 

  • Resistance 1- 295 Supports 1- 257 
  • Resistance 2- 313 Supports 2- 244 
  • Resistance 3- 330 Supports 3- 229

Torrent Power Weekly CHART