ReNew Energy Global Signals Confident Pivot in Earnings

Renew Energy Global Plc ((RNW)) has held its Q3 earnings call. Read on for the main highlights of the call.

ReNew Energy Global’s latest earnings call struck a broadly upbeat tone, with management balancing robust growth metrics against clear-eyed discussion of risks. Solid top-line and EBITDA expansion, cheaper refinancing and strong manufacturing performance underpinned confidence, while leverage, transmission bottlenecks and wind underperformance remained watch points for investors.

Operating Capacity and Portfolio Expansion

ReNew’s operating capacity climbed from 10.7 GW to 11.8 GW over the past year, a roughly 19% jump that adds about 2 GW of new assets to the grid. The overall portfolio now stands at 19.2 GW, including around 1.5 GW of battery energy storage, underscoring the company’s scale and its pivot toward storage-backed renewables.

EBITDA and Revenue Growth Momentum

Adjusted EBITDA for the first nine months grew 31% to INR 74.8 billion, reflecting both the expanding asset base and operational efficiencies. Revenue surged 48% year-on-year over the same period, driven by higher operating megawatts and a growing contribution from the in-house manufacturing business.

Profitability Inflection in Profit After Tax

Profit after tax increased more than sixfold year-over-year for the nine-month period, signaling a meaningful step change in the company’s bottom line. While exact numbers were not disclosed, the sharp rise suggests operating leverage is kicking in as ReNew scales its portfolio and optimizes costs.

Cheaper Bond Financing Eases Interest Burden

ReNew tapped the international bond market with a $600 million issue priced at 6.5%, significantly below its earlier 7.95% level and attracting more than $2 billion in demand. The refinancing should trim roughly $9 million from annual interest expense and marks the first bond issuance via GIFT City, broadening the firm’s funding channels.

Capital Recycling Boosts Liquidity

The company continued to recycle capital by selling 300 MW of solar assets in the quarter, bringing total disposals to 600 MW year-to-date. These transactions, together with $100 million from BII for manufacturing, have raised $275 million, supporting liquidity and funding new growth without relying solely on fresh debt.

Manufacturing Outperformance and Scale-Up

Manufacturing contributed INR 10.8 billion to adjusted EBITDA in the first nine months, making it a material earnings driver. The segment produced about 3 GW of modules and 1.4 GW of cells year-to-date, selling over 2.6 GW of modules, including around 1.5 GW to external customers.

Upgraded Guidance and Execution Targets

Management lifted the lower end of full-year adjusted EBITDA guidance by about 3%, now aiming for INR 90–93 billion. Construction targets were also tightened and raised, with expected project build-out increased to 1.8–2.4 GW and cash flow to equity projected at INR 14–17 billion.

Solar and Storage Pivot De-Risks Portfolio

ReNew is reshaping its pipeline by cutting committed wind capacity from 2.5 GW to roughly 850 MW while boosting its solar plus battery storage mix to curb execution risk. The reconfiguration is expected to trim build-out CapEx by around INR 60 billion while reducing EBITDA by only INR 6.5–6.8 billion, enhancing overall EV/EBITDA economics.

Leverage Trending Lower but Still High

Headline leverage has fallen from 8.2x in December 2024 to about 7x currently, or 6.7x excluding joint venture contributions. For the operating portfolio alone, trailing 12‑month leverage stands near 5.6x, with management targeting a gradual decline in headline leverage toward roughly 5.5x over the coming years.

ESG Scores and Sustainability Credentials

ReNew highlighted its ESG credentials, noting an LSEG score of 90.41 out of 100, ranking second among 346 sector peers and improving 7% year-on-year. The company also reported top-tier CDP ratings, water-positive certification at two sites, an 18.2% reduction in Scope 1 and 2 emissions versus baseline and carbon-neutral verification for the fifth straight year.

C&I Segment Growth and Blue-Chip Clients

The commercial and industrial portfolio expanded about 30% year-on-year and is now among the largest in India. Around half of this C&I capacity is contracted with marquee global technology firms, including major cloud and digital players, providing long-term, high-quality offtake for ReNew’s projects.

Transmission Delays and Curtailment Headwinds

Industry-wide delays in transmission build-out and power curtailment continue to weigh on performance, with some assets facing meaningful interruptions. Projects operating under temporary GNA have seen partial curtailment in the 10–20% range on affected days, creating volatility in realized output and revenues.

Managing T-GNA Exposure and Compensation

At the start of last quarter roughly 1 GW of capacity was on temporary GNA, but about 600 MW has now shifted to permanent GNA, leaving 400–500 MW still exposed. Only 30–35% of combined curtailment-related losses have been compensated so far, underscoring that transmission risk remains only partially mitigated.

Wind Underperformance and Portfolio Repricing

Wind assets have delivered lower-than-expected P50 and plant load factors in recent years, causing return volatility and prompting a strategic rethink. In response, ReNew has sharply reduced its committed wind pipeline from 2.5 GW to about 850 MW, reallocating capital toward more predictable solar and storage projects.

Consolidated Leverage Still a Medium-Term Overhang

Despite recent progress, consolidated leverage around 7x remains elevated and is a key focus for management and investors. The company is planning a multi-year deleveraging program, aiming to bring headline leverage down toward roughly 5.5x between 2028 and 2030 through asset sales and disciplined capital allocation.

Short-Term Manufacturing Margin Volatility

The manufacturing segment experienced a temporary margin squeeze and inventory build-up during the monsoon period, reflecting seasonal and market dynamics. Management reported that margins have since recovered in the current quarter, suggesting the earlier weakness was transitory rather than structural.

EBITDA Visibility for New Assets Still Building

Many of ReNew’s recently commissioned projects have been operating for less than a full year, limiting the usefulness of trailing 12‑month EBITDA as a gauge of true earnings power. As these assets mature and stabilize, management expects reported EBITDA to better reflect the portfolio’s underlying run-rate potential.

Guidance and Deleveraging Roadmap

ReNew raised its FY 2026 outlook, targeting adjusted EBITDA of INR 90–93 billion with manufacturing expected to deliver INR 11–13 billion, supported by a 900 MW external order book. Management plans to construct 1.8–2.4 GW this year, generate INR 14–17 billion in cash flow to equity and push leverage below 5.5x through about 1.6 GW of asset sales, ongoing capital recycling and lower-cost bond funding.

ReNew’s earnings call painted the picture of a growth company maturing into a more disciplined, de-risked platform while still wrestling with sector-wide execution challenges. For investors, the mix of strong EBITDA growth, rising manufacturing scale and a clear deleveraging plan offers upside, provided the company can navigate transmission constraints and wind variability without eroding returns.