Renew Energy Global Plc ((RNW)) has held its Q2 earnings call. Read on for the main highlights of the call.
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ReNew Energy Global Plc’s recent earnings call painted a generally positive picture, highlighting significant portfolio expansion and financial growth, along with a strong commitment to environmental, social, and governance (ESG) principles. Despite these positive aspects, the company acknowledged challenges such as lower solar power load factors, curtailment issues, and uncertainties in power purchase agreement (PPA) signings. Overall, the positive developments overshadowed the challenges discussed.
Significant Portfolio Expansion
ReNew Energy Global Plc has made impressive strides in expanding its renewable energy portfolio. Since October of last year, the company has commissioned over 2.1 gigawatts of renewable energy capacity, marking a 22% growth in its portfolio after accounting for asset sales. This expansion underscores ReNew’s commitment to increasing its renewable energy footprint and its strategic focus on growth.
Strong Financial Performance
The company reported robust financial results, with an adjusted EBITDA of INR 53.5 billion, representing a 24% year-on-year growth for the first half of the fiscal year ending March 31, 2026. This strong financial performance highlights ReNew’s ability to generate substantial revenue and maintain financial health amidst its expansion efforts.
Manufacturing Business Growth
ReNew’s manufacturing segment has also seen significant growth, producing over 2 gigawatts of modules and over 900 megawatts of cells in the first half of FY ’26. This contributed INR 8.6 billion to the company’s adjusted EBITDA, showcasing the manufacturing business as a vital component of ReNew’s overall strategy.
Upgraded Financial Guidance
ReNew has revised its financial guidance for FY ’26, increasing its adjusted EBITDA expectations for the manufacturing segment to a range of INR 10 billion to INR 12 billion. This upward revision reflects the company’s confidence in its manufacturing capabilities and its potential for continued financial success.
ESG Commitment and Recognition
ReNew’s commitment to ESG principles has been recognized with a score of 83 in the S&P Global Corporate Sustainability Assessment, marking a 14% year-on-year improvement. This score is the highest ever achieved by an Indian Independent Power Producer (IPP), highlighting ReNew’s leadership in sustainability.
Reduced Leverage Metrics
The company has successfully reduced its headline leverage from 8.6 in September ’24 to 7 in September ’25, with operating asset leverage falling below the 6x threshold. This reduction in leverage metrics indicates ReNew’s focus on maintaining a healthy balance sheet and financial stability.
Lower Solar Power Load Factors
ReNew faced challenges with lower solar power load factors due to reduced irradiation from an extended monsoon, resulting in a net negative impact of INR 1.7 billion for the quarter compared to the previous year. This highlights the volatility and challenges associated with renewable energy production.
Curtailment Issues
The company experienced curtailment issues in some projects in Rajasthan, impacting revenue by approximately INR 100 crores in the first half. These curtailments pose challenges to ReNew’s operational efficiency and revenue generation.
Challenges with PPA Signings
ReNew is facing uncertainty in converting Letters of Award (LOAs) into PPAs, particularly for structured products, due to the need for more time and dialogue with distribution companies (DISCOMs). This uncertainty could impact future revenue streams and project timelines.
Reduced Manufacturing Margins
The manufacturing segment’s EBITDA margin decreased to 33% in fiscal Q2 from 40% in Q1, attributed to lower realizations and revised procurement pricing. This reduction in margins indicates the challenges faced by ReNew in maintaining profitability in its manufacturing operations.
Forward-Looking Guidance
ReNew Energy Global Plc provided forward-looking guidance that includes commissioning over 2.1 gigawatts of renewable energy capacity since October of the previous year, with a target to achieve returns at the higher end of their targeted internal rate of return (IRR) range. The company reaffirmed its adjusted EBITDA guidance for fiscal 2026 in the range of INR 87 billion to INR 93 billion. Additionally, ReNew has revised its manufacturing EBITDA guidance upwards to INR 10 billion to INR 12 billion for the fiscal year, reflecting confidence in its growth trajectory.
In conclusion, ReNew Energy Global Plc’s earnings call highlighted a positive outlook with substantial growth in its renewable energy portfolio and strong financial performance. Despite facing challenges such as lower solar power load factors and uncertainties in PPA signings, the company’s commitment to ESG principles and its strategic focus on expansion and financial health remain strong. Investors and stakeholders can look forward to ReNew’s continued growth and leadership in the renewable energy sector.