Renew Energy Global Plc Reports Strong Growth Amid Challenges

Renew Energy Global Plc ((RNW)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call for Renew Energy Global Plc painted a picture of robust growth and strategic achievements, despite some challenges in the external environment. The company reported significant increases in renewable capacity and financial performance, alongside notable successes in its manufacturing business. However, challenges in the bidding environment and external factors affecting solar PLFs were acknowledged. The company’s disciplined approach in bidding and its ESG achievements further bolster a positive outlook.

Significant Renewable Capacity Expansion

Renew Energy Global Plc has made impressive strides in expanding its renewable energy capacity, commissioning approximately 2.2 gigawatts since July of last year. This expansion represents a 23% growth in their portfolio, even after accounting for asset sales, underscoring the company’s commitment to scaling its renewable energy footprint.

Strong Financial Performance

The financial results were a highlight, with the company delivering an adjusted EBITDA of INR 27.2 billion, marking a 43% increase year-over-year. The profit after tax reached INR 5.1 billion, surpassing the profit for the entire fiscal 2025, indicating a strong financial trajectory.

Manufacturing Business Success

The manufacturing segment of Renew Energy Global Plc has also shown remarkable success, contributing INR 5.3 billion to the adjusted EBITDA for the quarter. The business is now fully stabilized, operating at a capacity of 6.4 gigawatts of modules and 2.5 gigawatts of cells.

ESG Achievements

The company has made significant progress in its ESG initiatives, reducing Scope 1 and Scope 2 emissions by 18.2% from the FY ’22 baseline, surpassing their target of 12.6%. Additionally, they achieved a 51% improvement in water savings, highlighting their commitment to sustainable practices.

Marquee Investment

Renew Energy Global Plc secured a marquee investment from British International Investments, amounting to over USD 100 million for approximately a 10% stake in their solar manufacturing business, signaling strong investor confidence.

Subdued Solar PLFs

The company faced subdued solar PLFs this quarter, attributed to lower irradiation caused by the early onset of monsoons, which impacted performance in this area.

Challenges in Bidding Environment

Renew Energy Global Plc acknowledged the challenges in the bidding environment, noting that competition has become irrational with lower return expectations, which has impacted their win ratio.

Non-participation in Green Ammonia Tender

The company chose not to participate in recent green ammonia tenders, citing inappropriate contract structuring and low tariffs as the primary reasons for their decision.

Forward-Looking Guidance

Looking ahead, Renew Energy Global Plc remains committed to achieving its fiscal year goals, with a robust performance reflected in an adjusted EBITDA of INR 27.2 billion. The company has signed PPAs for 3.7 gigawatts of installed capacity, aiming for returns at the higher end of their targeted IRR range. The manufacturing business’s adjusted EBITDA guidance has been revised upwards to INR 8 billion to INR 10 billion. Additionally, the company is on track to complete construction of 1.6 to 2.4 gigawatts of capacity in fiscal 2026 and expects to generate cash flow to equity of INR 14 billion to INR 17 billion.

In summary, the earnings call for Renew Energy Global Plc highlighted a strong quarter marked by significant growth in renewable capacity and financial performance. Despite challenges in the bidding environment and external factors affecting solar PLFs, the company’s disciplined approach and ESG achievements present a positive outlook for the future. Investors and stakeholders can look forward to continued growth and strategic advancements in the coming quarters.