ReNew Energy Global (RNW) AI Stock Analysis

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ReNew Energy Global

(NASDAQ:RNW)

65Neutral

ReNew Energy Global scores moderately due to strong operational efficiency and growth in portfolios, as highlighted in the earnings call. However, concerns about high leverage, cash flow challenges, and a high P/E ratio weigh down the overall score. The technical outlook is cautious, with mixed indicators suggesting potential volatility in the short term.

Positive Factors

Market Potential

The company still has ~6GW of bids won in pipeline for which PPAs are yet to be signed, showing potential for future revenue growth.

Profitability

Third-party module sales in the Dec quarter were at industry high EBITDA margin ~18%, indicating strong profitability in this segment.

Valuation

The stock is considered attractive as it trades at a 60% discount to recently listed peers.

Negative Factors

Debt Levels

Net debt has increased with a net debt/EBITDA ratio of 9.6x.

Financial Performance

EBITDA estimates for FY25/26 have been reduced due to weaker wind performance, indicating potential challenges in achieving previous financial expectations.

Revenue

Revenue is expected to be below consensus due to weaker wind performance.

ReNew Energy Global (RNW) vs. S&P 500 (SPY)

Market Cap

$2.39B

Dividend YieldN/A

Average Volume (3M)779.68K

Price to Earnings (P/E)95.4

Beta (1Y)0.51

Revenue Growth-1.77%

EPS Growth-41.65%

CountryUS

Employees3,988

SectorUtilities

Sector Strength94

IndustryRenewable Utilities

Share Statistics

EPS (TTM)0.07

Shares Outstanding244,266,830

10 Day Avg. Volume785,510

30 Day Avg. Volume779,680

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$8.21

Price Target Upside24.39% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

ReNew Energy Global Business Overview & Revenue Model

Company DescriptionReNew Energy Global Plc generates power through non-conventional and renewable energy sources in India. The company operates through Wind Power and Solar Power segments. It develops, builds, owns, and operates utility scale wind and solar energy projects, as well as distributed solar energy projects that generate energy for commercial and industrial customers. The company also provides engineering, procurement, and construction services; operation and maintenance services; consultancy services; and sells renewable energy certificates. As of March 31, 2022, its portfolio consisted of 10.69 GW of wind and solar energy projects, hydro, firm power projects, and distributed solar energy projects, of which 7.57 GW projects were commissioned and 3.12 GW were committed. ReNew Energy Global Plc was founded in 2011 and is based in London, the United Kingdom.

How the Company Makes MoneyReNew Energy Global makes money primarily through the generation and sale of electricity from its renewable energy projects. The company's key revenue streams include long-term power purchase agreements (PPAs) with government bodies and private entities, which provide a stable and predictable revenue base. ReNew Energy also earns income through renewable energy certificates and incentives provided by the government to promote green energy. Strategic partnerships with technology providers and financial institutions further support its growth and operational efficiency. Significant factors contributing to its earnings include its expanding portfolio of wind and solar projects and its ability to leverage economies of scale in the renewable energy sector.

ReNew Energy Global Financial Statement Overview

Summary

ReNew Energy Global shows robust revenue growth and operational efficiency with strong EBIT and EBITDA margins. However, the company faces challenges in profitability and cash flow due to high leverage and capital expenditures. The balance sheet indicates a highly leveraged structure, posing potential risks.

Income Statement

Positive

ReNew Energy Global has demonstrated a significant improvement in its financial performance over recent periods. The TTM (Trailing-Twelve-Months) revenue growth is notable, increasing from the previous year. The Gross Profit Margin stands impressively high, indicating effective cost management. However, the Net Profit Margin remains a concern, as profitability is relatively low due to substantial operating and financing costs. The EBIT and EBITDA margins show strong operational efficiency, reflecting the company's ability to generate earnings from operations.

Balance Sheet

Positive

The company maintains a high Debt-to-Equity Ratio, indicating a leveraged capital structure, which might pose risks if not managed properly. On the positive side, the Equity Ratio suggests a fair portion of assets financed by equity, reflecting moderate financial stability. Return on Equity is modest, highlighting challenges in generating returns for shareholders from equity investments.

Cash Flow

Neutral

ReNew Energy Global faces challenges with negative Free Cash Flow, indicating that capital expenditures exceed operating cash inflows, potentially impacting liquidity. The Operating Cash Flow to Net Income ratio is healthy, suggesting strong cash earnings relative to accounting profits. However, the Free Cash Flow to Net Income ratio is negative, indicating cash flow issues related to financing and investment activities.

Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
81.32B	78.22B	59.35B	48.19B	48.41B
	Gross Profit
77.47B	71.27B	59.02B	47.76B	47.88B
	EBIT
72.71B	47.14B	73.33B	31.57B	32.75B
	EBITDA
68.75B	57.45B	37.98B	42.63B	44.05B
	Net Income Common Stockholders
3.40B	-5.03B	-16.20B	-8.00B	-2.82B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
51.90B	80.57B	81.30B	47.24B	44.41B
	Total Assets
873.93B	748.11B	641.34B	492.05B	479.56B
	Total Debt
655.66B	516.43B	391.67B	351.65B	334.13B
	Net Debt
628.64B	478.25B	363.29B	330.97B	321.04B
	Total Liabilities
752.24B	628.37B	514.97B	427.31B	400.71B
	Stockholders Equity
105.22B	106.80B	118.44B	62.08B	74.53B
Cash Flow		Free Cash Flow
-84.91B	-20.79B	-47.44B	7.60B	-4.21B
	Operating Cash Flow
68.93B	62.57B	42.39B	32.08B	35.09B
	Investing Cash Flow
-162.53B	-71.98B	-124.75B	-17.41B	-53.72B
	Financing Cash Flow
82.42B	19.11B	90.04B	-7.08B	21.61B

ReNew Energy Global Technical Analysis

Technical Analysis Sentiment

Positive

Last Price6.60

Price Trends

50DMA

6.16

Positive

100DMA

6.44

Positive

200DMA

6.15

Positive

Market Momentum

MACD

0.11

Negative

RSI

60.64

Neutral

STOCH

89.22

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RNW, the sentiment is Positive. The current price of 6.6 is above the 20-day moving average (MA) of 6.11, above the 50-day MA of 6.16, and above the 200-day MA of 6.15, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 60.64 is Neutral, neither overbought nor oversold. The STOCH value of 89.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RNW.

ReNew Energy Global Risk Analysis

ReNew Energy Global disclosed 63 risk factors in its most recent earnings report. ReNew Energy Global reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

ReNew Energy Global Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EE	79 Outperform	$3.04B	21.14	6.62%	0.64%	-26.53%	13.67%
AMPS	73 Outperform	$800.50M	23.35	0.29%	―	26.49%	―
ORA	66 Neutral	$4.44B	35.97	5.22%	0.66%	6.06%	-2.21%
RNW	65 Neutral	$2.39B	95.38	2.00%	―	-1.77%	-41.65%
Sector *	63 Neutral	$8.54B	12.48	6.21%	4.38%	3.32%	-10.32%
FLNC	52 Neutral	$744.35M	236.42	-0.49%	―	11.00%	97.10%
SMR	42 Neutral	$4.82B	―	-38.37%	―	62.41%	-85.81%

* Utilities Sector Average

Performance Comparison

RNW

ReNew Energy Global

6.51

0.87

15.43%

ORA

Ormat Techno

73.56

10.14

15.99%

SMR

NuScale Power

16.89

11.09

191.21%

AMPS

Altus Power

4.99

1.32

35.97%

FLNC

Fluence Energy

4.12

-13.72

-76.91%

Excelerate Energy, Inc. Class A

26.86

10.12

60.45%

ReNew Energy Global Earnings Call Summary

Earnings Call Date:Feb 18, 2025

(Q3-2025)

% Change Since: -2.37%|

Next Earnings Date:Jun 04, 2025

Earnings Call Sentiment Positive

The earnings call presented a generally positive outlook with significant growth in ReNew's operational and committed portfolios, alongside successful cost optimization efforts and manufacturing expansion. However, challenges such as lower wind performance, adverse weather impacts on EBITDA, and delayed regulatory approvals present notable concerns.

Q3-2025 Updates

Positive Updates

Significant Increase in Operational Portfolio

ReNew reported a 26% year-over-year increase in operational megawatts, with the total operational portfolio reaching 10.8 gigawatts. This reflects strong execution capabilities in project commissioning.

Strong Growth in Committed Portfolio

The total committed portfolio grew by 27% year-on-year to 17.4 gigawatts, with an additional 1.1 gigawatts since the last earnings call.

Cost Optimization Success

Achieved a 500 basis points improvement in margins due to cost optimization initiatives, resulting in lower provisions and improved cash flows.

Recognition for ESG Efforts

ReNew was recognized as India's highest-rated pure-play renewable energy company by S&P, highlighting its commitment to sustainability and ESG practices.

Manufacturing Expansion

ReNew's manufacturing facility is producing around 10 megawatts per day of modules and has secured an order book of about 2 gigawatts, doubling in a quarter.

Negative Updates

Lower Wind Performance

Wind PLFs trended lower this year compared to last year, resulting in a reduction of the FY25 EBITDA guidance range due to weaker than expected wind performance.

Impact of Weather on EBITDA

Adverse weather led to a revenue reduction relative to guidance of INR1.6 billion for the quarter, impacting the FY25 adjusted EBITDA guidance.

Delayed Regulatory Approvals

600 megawatts of the targeted megawatt installations are subject to timely regulatory approvals and transmission infrastructure build-out.

Challenges with PPA Signings

There is a backlog of unsigned PPAs, which remains a challenge despite progress in signing significant portions in the past.

Company Guidance

During the ReNew 3Q 2025 earnings call, several key metrics and updates were highlighted. ReNew reported a year-to-date commissioning of approximately 1.3 gigawatts, with an additional 150 megawatt-hours of batteries, leading to a total operational portfolio of 10.8 gigawatts, marking a 26% increase year-on-year. The committed portfolio stands at 17.4 gigawatts, representing a 27% growth from the previous year. Despite facing challenges with wind power load factors (PLFs) trending lower, impacting the FY25 EBITDA guidance to INR 74-78 million, and cash flow to equity guidance to INR 11-13 billion, ReNew remains optimistic. The company has secured 3.9 gigawatts of renewable energy capacity and continues to expand its manufacturing capabilities, producing about 10 megawatts of modules per day and securing an external order book of 2 gigawatts. Furthermore, ReNew has been recognized as India's highest-rated pure-play renewable energy company by S&P, underscoring its commitment to ESG practices. The company also addressed operational efficiency improvements, with margins improving by 500 basis points, and a reduction in DSOs by 22 days, enhancing its financial stability.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.