ReNew Power’s Earnings Call Highlights Growth and Optimism

Renew Energy Global Plc ((RNW)) has held its Q4 earnings call. Read on for the main highlights of the call.

ReNew Power’s recent earnings call conveyed a predominantly positive sentiment, highlighting substantial achievements in growth, financial performance, and sustainability. Despite encountering challenges such as weaker wind resources and potential project delays, the overall outlook remains optimistic, supported by robust construction milestones, an expanding portfolio, and favorable financial conditions.

Record Construction and Operating Capacity

ReNew Power has achieved a milestone by constructing over 2 gigawatts of renewable energy assets in fiscal year 2025, elevating its total operating capacity to a record 11.2 gigawatts. This marks a 17% increase year-over-year and a 21% increase when excluding asset sales, showcasing the company’s commitment to expanding its renewable energy footprint.

Significant Contracted Portfolio Growth

The company’s contracted portfolio has grown significantly, now standing at 18.5 gigawatts, an 18% increase from the previous year. ReNew Power has added 1.3 gigawatts of Power Purchase Agreements since Q3 fiscal 2025 and signed agreements for 5.3 gigawatts since April 2024, reflecting its strong market position and growth trajectory.

Strong Financial Performance

ReNew Power reported a 14% year-over-year growth in adjusted EBITDA, with margins in the Independent Power Producer (IPP) business improving to nearly 83%. The profit before tax surged by 23% to INR 10 billion, underscoring the company’s robust financial health and operational efficiency.

Expansion of Manufacturing Capabilities

The company’s solar manufacturing facilities, with 6.4 gigawatts of module manufacturing and 2.5 gigawatts of cell capacity, are fully stabilized and significantly contributing to the profit and loss statement. ReNew Power plans to expand its cell facility by an additional 4 gigawatts, further enhancing its manufacturing capabilities.

Positive Rate Environment for Financing

ReNew Power is benefiting from the Reserve Bank of India’s rate cuts, which are positively impacting new greenfield financing. The company successfully raised USD 2 billion in debt financing at competitive rates, positioning it well for future growth and expansion.

ESG and Sustainability Achievements

ReNew Power has achieved top Environmental, Social, and Governance (ESG) ratings and received several accolades, including the CII Climate Action Program award and inclusion in the S&P Global Sustainability Yearbook, highlighting its commitment to sustainability and responsible business practices.

Challenges with Wind Resource

Despite the positive financial performance, ReNew Power faced challenges due to weaker-than-anticipated wind resources, which slightly offset the financial benefits. This highlights the inherent risks associated with renewable energy production.

Potential Project Delays Due to Grid Network Build-Out

The company has provided guidance for fiscal 2026 with a wider range to account for potential delays in the grid network build-out, which could impact the connection of some projects. This cautious approach reflects the company’s proactive risk management strategy.

Forward-Looking Guidance

Looking ahead, ReNew Power has set ambitious targets for fiscal year 2026. The company expects adjusted EBITDA to range between INR 87 billion to INR 93 billion, plans to construct 1.6 to 2.4 gigawatts of new projects, and anticipates cash flow to equity holders of INR 14 billion to INR 17 billion. Additionally, ReNew Power is leveraging India’s favorable interest rate environment to optimize its financing strategies, ensuring continued growth and stability.

In summary, ReNew Power’s earnings call underscores a positive outlook, driven by significant achievements in construction, portfolio growth, and financial performance. While challenges such as weaker wind resources and potential project delays exist, the company’s strategic initiatives and favorable financial conditions position it well for future success.