RNWWW — ReNew Energy Global plc

Summary of ReNew's Q3 FY 2026 Earnings Call

1. Key Financial Results and Metrics

• Adjusted EBITDA: Increased by 31% to INR 74.8 billion for the first nine months of FY 2026.
• Profit After Tax: Over sixfold increase compared to the previous year.
• Revenue Growth: Revenue rose by 48% year-on-year, attributed to increased megawatt capacity and contributions from the manufacturing business.
• Leverage: Debt-to-EBITDA ratio improved to approximately 6.7x, down from 8.2x in December 2024, with a target to reduce it to 5.5x by 2028-2030.
• Bond Offering: Successfully raised $600 million at a reduced interest rate of 6.5%, down from 7.95%, saving approximately $9 million annually in interest expenses.

2. Strategic Updates and Business Highlights

• Operating Capacity: Increased from 10.7 GW to 11.8 GW, with a 19% growth in the overall portfolio (including battery energy storage systems).
• Portfolio Optimization: Shifted focus from wind to solar and battery energy storage systems (BESS) to reduce execution risk and improve cash flow predictability.
• Manufacturing Performance: The manufacturing segment contributed INR 10.8 billion to adjusted EBITDA, with a strong order book of 900 MW.
• ESG Commitment: Achieved an A grade from LSEG and top ratings from CDP for climate change and water management, emphasizing sustainability in operations.

3. Forward Guidance and Outlook

• Adjusted EBITDA Guidance: Increased to a range of INR 90 billion to INR 93 billion for FY 2026.
• Project Construction Guidance: Expected to construct between 1.8 GW and 2.4 GW for the fiscal year ending March 31, 2026.
• Manufacturing Contribution: Anticipated adjusted EBITDA contribution from the manufacturing business raised to INR 11 billion to INR 13 billion.

4. Challenges and Points of Concern

• Transmission Delays and Curtailment: Ongoing industry issues with transmission project delays and curtailment remain a concern, although the government is addressing these challenges.
• Wind Capacity Risks: The decision to reduce wind capacity is driven by historical performance variability and execution difficulties, which could impact future returns.
• Market Competition: Increased competition in solar and BESS sectors, particularly with fluctuating prices and aggressive bidding strategies.

5. Notable Q&A Insights

• Strategic Shift to Solar and BESS: Management explained the rationale behind reducing wind capacity, citing improved pricing for solar and BESS, and execution ease compared to wind projects.
• Manufacturing Plans: No immediate plans to manufacture BESS, primarily due to competitive pricing from imports and rapid technological advancements in battery technology.
• Curtailed Capacity Compensation: Clarified that projects under GNA receive compensation for curtailment, while those under T-GNA do not, with ongoing discussions on how to address systemic losses from curtailment.
• Long-term Leverage Goals: Emphasis on reducing leverage to enhance shareholder returns, with a target timeline set for 2028-2030 to achieve a debt-to-EBITDA ratio of 5.5x.

This summary encapsulates the key aspects of ReNew's Q3 FY 2026 earnings call, highlighting financial performance, strategic shifts, future guidance, and challenges faced by the company.