Thank you for standing by and welcome to ReNew Energy Global Plc 4Q FY’24 Results and Long-Term Outlook. All participants are in listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to Mr. Nathan Judge. Please go ahead.

Yes, thank you and good morning everyone and thank you for joining us. Today we're going to have a little bit of a different format from our previous earnings call given the meaningful gains the company has made in securing long-term growth, as well as the dramatic improvement in the fundamentals of the Indian renewable energy market. We wanted to share with you our long-term outlook in addition to the normal earnings review and annual guidance for fiscal year 2025. We did put out a press release announcing results for the fiscal 2024 fourth quarter and full-year 2024 ended March 31, 2024 last night and a copy of this press release and earnings presentation are available on the investor relations section on Renew's website at www.renew.com. With me today are Sumant Sinha, Founder, Chairman, and CEO; Kailash Vaswani, our CFO, and Vaishali Nigam Sinha, Co-Founder and Chairperson of Sustainability. After the prepared remarks, which we expect will take about an hour, we will open up the call for questions. Please note our Safe Harbor statements are contained within our press release, presentation materials, and materials available on our website. These statements are important and integral to all our remarks. There are risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements. So we encourage you to review the press release we furnish in our Form 6-K and the presentation on our website for a more complete description. Also contained in our press release, presentation materials, and annual report are certain non-IFRS measures that we reconcile to the most possible IFRS measures. And these reconciliations are also available on our website in the press release presentation materials and our annual report. It is now my pleasure to hand it over to Sumant.

Thank you, Nathan. Good morning and good afternoon and good evening, everyone. I'm glad to have you all on our earnings call. Turning to the presentation, just to talk about the first couple of pages, we are unwavering in our purpose of creating a carbon-free world, one step at a time. Our focus is on growth that adds value to all our stakeholders and most importantly to our shareholders. As a renewable energy leader in India and the Global South, we aim to further enhance our position in the coming years. We don't pursue scale our market share for its own sake. Instead, we see growth opportunities where the return exceeds our cost of capital. Fiscal year 2024 started off at the bank when the Ministry of New and Renewable Energy, or MNRV, announced 50 gigawatts of annual auctions. This was almost triple what had been auctioned off the prior years. Although the target was to achieve 50 gigawatts, India surpassed this goal, auctioning over 62 gigawatts of RE capacity during the year. Since April 2023, we have won about 8 gigawatts of new capacity, which is around 60% more than our portfolio was as of March 31, 2023. We have signed PPAs for about 2.2 gigawatts of capacity so far in FY’25, increasing our contracted portfolio now to 15.6 gigawatts for the remaining 6 gigawatts or so that we have done and have a letter of award in hand, we expect to sign PPAs over the next six to nine months. Until then, we are going to refer to them as our pipeline. We are on pace to deliver on a pipeline of over 21 gigawatts by 2029, which is more than double the amount we finished fiscal year FY '2024 item. We are further propelled by a very…

Thanks, Sumant. On page 36, we'll discuss three themes, profitability, leverage, and funding growth. While we’ll showcase the returns from our operating projects, analyze the leverage of our operating portfolio, and outline our growth funding strategy. Firstly, turning to profitability and leverage. On slide 37, based on reported financials, some may view our leverage high and profits low. However, these ratios are distorted by growth, including debt for projects that are not yet completed and producing EBITDA, as well as the cost related to our platform that delivers tremendous value longer term. We will show on the slide that leverage on assets in our portfolio that have been operating for at least one year only have a net debt to last 12-months EBITDA ratio of about 5.3 times. The ROCE or the return on capital employed of the same group is around 11%. On a consolidated basis, the returns of these projects are partially offset by platform costs, new businesses, and our under-construction portfolio. Put differently, as we grow, there will be systematic improvement to leverage and profitability. By 2030, we expect that the consolidated net debt to last 12 months EBITDA will be around 5.5 times or lower, and overall return on capital employed will be double-digits. On page 38, we delve into leverage. The operational portfolio of assets that have been operating one year or more had a net debt to last 12 months EBITDA leverage ratio of around 5.5 times, while the same ratio on a consolidated basis stood at 8.2 times. We want to point out that this higher figure includes debt related to manufacturing, equity contributions by our JV partners in the form of compulsory convertible debt, and debt related to our under-construction portfolio. After these adjustments, our underlying core leverage ratio is about 5.5…

Thank you, Kailash. Turning to page 47, as we reflect on the remarkable milestones achieved during fiscal year ‘24, our journey has been marked by achieving our targets and being recognized by top rated ESG rating platforms affirming our leadership globally. We set new benchmarks in our ESG vision, performance, and transparency, which I will elaborate in the upcoming slides. ReNew has been recognized by top ESG rating platforms, including being named among the top rated ESG companies by Sustainalytics and the best in India's electric utilities and IPPs corporate in India by Refinitiv. Our dedication to sustainability is further demonstrated by the increase in our S&P global score, which has gone up to 55 in fiscal year ‘23 from 41 in fiscal year ‘22. We have maintained our B score in CDP climate change and A minus in CDP supply engagement ratings. Last year, ReNew received global recognition for its pioneering achievements in business excellence, digital innovation, and sustainability. Among the most notable accolades were the MIT Technology Review 2023's 15 Climate Tech Companies to Watch for was -- ReNew was included in this, and it was one of the only two renewable energy companies globally to be included in this prestigious list. In the sustainable markets initiative Terra Carta Seal, we were one of the 17 companies in a global list, which is recognized for its efforts towards conservation of water and its operation. The COP28 Presidency Energy Transition Changemaker was an award, which was given to us by the COP28 Presidency. We were the only clean energy company from India to be recognized under the category of renewables, integration, and clean power, and renewables as well. The World Economic Forum's Global Lighthouse Network, we won this for the second time and we found our place in a…

Thank you, Vaishali. Turning to our annual guidance on page 50, for FY ‘25 we expect an adjusted EBITDA of INR76 billion to INR82 billion and expect to complete 1.9 gigawatts to 2.4 gigawatts of projects this year. The addition of these projects will enable us to deliver CSE of INR12 billion to INR14 billion in FY ‘25. In addition, we expect that our current contracted pipeline will deliver INR110 billion to INR115 billion on a run rate consolidated basis and CSE of INR30 billion to INR32 billion. On a longer term basis, we expect that we should be able to deliver the full 21.4 gigabit portfolio plus pipeline by the year 2029 -- FY 2029, and reach the run rate guidance by FY ‘30. On a fully constructed run rate basis, after considering planned asset recycling, we should be able to deliver EBITDA of INR142 billion to INR150 billion and a CSE of INR35 billion to INR42 billion. Thank you so much for all your patience and giving us time to go through this presentation. We will be now happy to take any questions from you all. Thank you. Nathan, back to you.

Thank you. [Operator Instructions] Your first question comes from Justin Clare with Ross Capital Partners.

Yes, hi. Thanks for taking our questions here. So first off, you have 21.4 gigawatts that you've won at auction already. And so just thinking through the interconnection constraints here, how are you thinking about participating in new auctions in FY ‘25 and beyond given the size of the pipeline that you already have? Are you looking to participate? And then if so, are you looking at winning projects where the COD dates would be in FY ‘30 or potentially beyond? So how are you thinking about that part of the business?

Yes, so I think Justin, as far as your question of interconnect is concerned, to bid for a new project you need obviously both the interconnect and also the reasonable visibility on how you're going to project the land or the ability to block the land. So this is that and then the PLF will built PLF of the radiation, you make an assessment of where can you bid from with a high degree of certainty that you will eventually be able to do the project there. Now the better -- and you can block interconnect through a couple of different mechanisms. You can acquire land ahead of time and that allows you to block interconnect, or you can give a bank guarantee and block interconnect. But if you do the second, then you have to get the land within a few months after that. Otherwise, you can lose your [Indiscernible] as well. So this is this what we are looking at doing is constantly looking forward and blocking interconnected areas where we know which are good size. And the better size you can get, the more competitive you are in auction. Simply because if you have got better locations than other people have, then obviously you are able to make higher returns at the same tariff, compared to other people. So therefore, the project development becomes very crucial in actually maximizing on the return of the projects that we are bidding for. And so at any given point in time we are extending out this whole project development by anything from 4 gigawatts to 6 gigawatts beyond what we already have in terms of pipeline of projects which is 21.4 gigawatts. So we have therefore many other sites and interconnect areas that we already are holding right now and to which we will now bid for new projects. Now to your question of are these projects going to be beyond 2030? That is something that we will assess as we go forward, because obviously we want to make sure that we stay within the [Technical Difficulty] that we have. And therefore we will bid for projects on a very, very select basis from this point on. And to the extent that we can make those promise back ended during this time period, we would like to do that, so that we are able to manage the capital requirement aspect. And we will conclude a bid, but on a very select basis for projects that we can get even higher IRRs. So that is the review the way we are thinking about at it right now.

Alright, okay, that's really helpful. And then maybe just one on your guidance here. You expect to complete 1.9 gigawatts to 2.4 gigawatts by the end of fiscal ‘25. I was wondering how much of that capacity is expected to be commissioned versus how much will be operational, but not yet commissioned. So it does look like there's a gap between when you operationalize a project and when it actually gets commissioned, how much is that gap? And then considering that, I was wondering how significant are merchant project sales in your fiscal ‘25 guidance?

Okay. So you know, the reason that there was a gap this last year between projects that have started generating revenue and projects that were technically deemed to be commissioned is because of two reasons: One, the grid operator introduced new guidelines and rules that required a much higher stringency of the connects that we had into the grid in terms of they wanted us to do various trial runs and grid matching and all of those kinds of things which actually on a one-time basis in a way delayed all commissions of projects, while they went through this new set of rules and regulations. Now that, that is well known and well understood, it is something that the whole system, not just us, but also the system operator, are now able to sort of buckle down and start minimizing the timeline between the revenue generating, as well as the commissioning, okay? So as we go forward, that gap will keep narrowing. Last year they said the gap was a little larger because of the fact that all these rules are new. This year we are already able to start working a little bit more efficiently on these issues and start factoring in. So I can't tell you exactly where we will be by the end of this year, but the gap will be a lot narrower, okay? But to be honest with you, it matters less to us because once the project starts generating revenue, that's really important from our standpoint. The second thing is that the moment the project is being technically commissioned, we then have to start selling it under the PPA to the end of this call. Whereas when it is still generating revenue, but not yet commissioned, that power we can start selling into the…

Okay, got it. Very helpful. Thank you.

Thank you, Justin.

Your next question comes from Puneet Gulati with HSBC.

Yes. Thank you so much. My first question is on the additional projects that you've run. How soon do you think you'll be able to find PPA? And if you can give some color of out of the 62 gigawatts that government auctioned out, how much has already been found PPA?

Yes, so after 8 gigawatts that we had won last year, as I had the thing I said in my remarks, about 1.5 gigawatts worth of 1.7 gigawatts or 1.8 gigawatts of PPAs have been signed. And therefore the balance 6 gigawatts or thereabouts is still left to be signed. Now there was some slowdown in PPA signing because the code of conduct was in effect as you know for the last couple of months and so some of the government agencies were going a little slow on signing PPAs waiting for the code of conduct to be finished. Now that it's got finished, I expect that some more PPAs will get signed. But I think this process will take a little bit of time. For me, it may take, as I said in six to nine months to get some of the -- to get mostly all of the PPAs signed. Simply because some of them are complex projects and therefore there needs to be a higher degree of engagement between the DISCOMs and the bidding agencies to explain to the DISCOMs and so on. And there has also been a complicated, you know, the discounts have to get approval from their regulatory agencies as well. So that whole process is a little bit longer, especially for the more complex stuff. So that's why my sense is that over the course of this fiscal year, the remainder of this fiscal year, most of the PPAs will get signed.

And on your cell and module manufacturing, you seem to have 6.2 gigawatt of module manufacturing, but your own plants indicate roughly 2 gigawatt of annual installation. So how should we think about the balance capacity? Would you be willing to sell it out in the market, export it, or within India? Any thoughts here?

Yes, so with 6-odd gigawatts of capacity we will essentially be producing about 4.7, 4.8 gigawatts of actual module, which will be -- and for our own 2 gigawatts we need given the oversizing about 2.7 gigawatts, 2.8 gigawatts. So the balance we do intend to sell into the market. Now there are two ways in which we are going to sell that. Number one is as pure module, maybe on a tooling basis or whatever. And the second is along with the cell that we are going to commission very soon. Now in the cell as you know there are two different markets that we can sell into. One is the DCR market domestically, which includes the rooftop scheme, the Suraj 1 scheme. And the second is of course the export market as well, where as you know in the U.S. particularly, they are now putting new import curves from -- on Chinese and Southeast Asian cells. So that is likely to become an attractive market for Indian cell. We can of course also sell the cells along with the modules in the domestic market. That is also of course a possibility. So I guess we would be selling about 1 gigawatts to 2 gigawatts a year of modules and all cells potentially separately or together depending on where you get the best utilization. And that number may decrease as we ramp up our own solar execution process.

Understood. And how is your experience doing in terms of operating costs for the module manufacturing so far?

So far it's been very good. Of course we have started module manufacturing for the first time and a lot of people have started up at the same time. And so there is a shortage of the right kinds of skilled workers. So therefore I think ramp up times have been a little bit longer, but I would say by and large, overall within our budget. And I think that everything is now getting to a good level of stabilization in terms of cost and production and quality as well.

Lastly, if you can talk about how much higher IRRs do you think we'll make on hybrid over solar once again, I should make that up?

On complex projects versus solar, you think?

Yes, complex versus solar.

So the thing is, first of all, complex projects have a higher confidence of wind, and wind is much harder to execute for most people. And therefore, we just have fewer bidders. And because you have fewer bidders, therefore the relative competitive intensity is a lot lower. And therefore, you end up usually stopping at tariffs, which are commensurate with the least efficient bidder, right? And therefore, us being in most cases the most efficient bidder, end up making those extra margins on the extra tariffs once the bidding stops.

So in terms of IRRs…

Vanilla solar tends to have more spread. Yes, yes.

Yes, so how much higher IRRs should one, because you used to take 16% to 20% on your Vanilla solar projects. What should be the…

Yes, so I think I'll give you ranges because obviously they tend to move a little bit depending on the bid and so on. But solar typically would be, I would say, 17% to 18% in terms of the equity IRR. Complex projects are probably about 19% to 20%.

Okay. So just 200 bps higher than that.

Yes, so -- yes, yes, yes. That's right.

Okay.

And there is, you know, also that they are harder to execute as well, and that is why you get that extra detail.

Okay, understood. That’s helpful. Thank you so much and all the best.

Thank you.

Your next question comes from Maheep Mandloi with Mizuho.

Hey, hello everyone. Thanks for taking the questions. Sumant and team thanks for the presentation. There's definitely a lot of information there. We'll probably take some time to unpack that. But maybe high level, I think there's some conservatism baked into the long-term guidance here? Just looking at, for example, the 9 times EBITDA assumption on asset recycling that seems lower than the previous sale last year and just where some of these peers or companies are trading in India? So overall, I'm just trying to understand like what buffer do you have on the top end or the bottom end on the guidance here, going forward?

Kailash, do you want to take that?

Yes, sure. Maheep, so obviously these are market-dependent transactions and that's why we are working with a range. We will obviously target the top end of what we are sort of guiding towards, but we just need to be a little bit conservative.

Got it and appreciate that. I mean, maybe in terms of just like the solar module supplier question on selling those internationally, is any of that 1.5 gigawatt to 2 gigawatt per year right now in the guidance? Is that an upside to the guidance here, for the sales to the international markets?

Sorry could you say that again?

Sorry I couldn’t [Technical Difficulty] the question. Kailash, if you did can you answer, yes?

No, I couldn't either. Can you say it again? Maheep?

Yes, no, sure. So I talked about 1.5 gigawatts to 2 gigawatts of solar module change to international market. What your internal consumption is? So I'm curious if that is in the guidance or if that could be upside to the EBITDA guidance?

So, Maheep, I can take that one. So, Maheep, that's not part of the guidance at this point in time.

Got it. And maybe just the last one and I'll catch up later on with you guys. But on the elections, any thoughts on how the new, I mean, obviously it's pretty fresh here, but any early thoughts on how that changes any dynamics on the demand growth or supply or anything else from your point of view?

No, Maheep, I don't think that we expect any change to happen. This government has already been very supportive, and a lot of that comes directly from the Prime Minister, as we all know. But the government overall has also very strong commercial reasons. One, of course, as we talked about, power demand is growing. Renewables is the cheapest, cleanest way to meet that power demand. So there is a very strong economic and commercial reason for the whole renewable energy effort to carry on. But even beyond that, I don't really expect anything to change, because some of the alliance partners are also very strongly supportive of the neighbors and have been in the past when they were earlier in State Governments. So I would expect that the same exact policy will continue and there will be a lot of continuity in policy making in the coming few years.

Thanks for the questions.

Your next question comes from Angie Storozynski with Seaport. Angie, your line is open. Angie Storozynski from Seaport, please go ahead.

Yes, I'm here. I'm So sorry about it. So my first question, I noticed that the complex projects are now built and they came online and I know that they are not commissioned yet and not dispatching under the PPAs, but I'm just wondering if for the last couple of months that they're operational, are you seeing that the dispatch or the output from these assets is in line with your expectations? Again, I understand that they're now merchant, but again, is there any, you know, sort of confirmation of your theoretical models of how these assets might be working under the PPAs?

Yes, so Angie, you know, what is commissioned right now is just the plain Vanilla wind project. So it's very hard to extrapolate from there about how the whole thing would work once it comes together. It's just like a wind project just like any other. And right now whatever producing we’re selling into the exchange. So it's very hard to even forecast from there. I think it's only once the solar project comes on stream and the batteries come on stream that we will actually be able to then combine the whole thing and start getting a better sense. But for the last one year we have been doing that in our digital trading. So we have been able to replicate the performance of the plant as if it were running over the course of the last year. And therefore we've been able to fine tune the design and so on this aside. So I would say that even once the whole plant comes on, there would not be very significant, if at all, any deviation from what we’ve anticipated, because of this digital suitability that we've been developing.

And my other question is for your existing wind assets, are you seeing any issues with performance, especially of those older assets? Any changes, for example, in the PLFs, not because of weather patterns, but because of aging of these assets. And I mean, obviously, we're seeing a lot of repowering of wind assets here in the U.S., and I'm just wondering if the same could be true for your assets, and more importantly, if there is any deterioration or aging of these assets reflected in basically lower output?

No, Angie, so far we have not seen any meaningful data from the earlier, from the design terms. Keep in mind our assets are -- wind assets are only about 12, 13-years old right now. So the oldest assets that we have. So, it's not, we have not seen any wide dispersion yet. But you know, even if we were to replace them with newer turbines, it could not really be cost effective to do that. And the PPA terms very often require us to continue with the same wind turbines that are installed. So I don't think that repowering here is going to be a possibility, at least until the time the PPA is outstanding. Maybe subsequent to that we could use the same interconnect that we have, the same land that we have, and so on, to then put up new wind turbines and connect those to the grid. And then depending on whether the merchant market makes sense or some other PPA market makes sense, we can then look at that. But we are still at least a decade away from that.

And then the last one, when you show us projections of EBITDA and net debt or leverage, those are reflective of asset sell-downs. And so basically it's your share of EBITDA and your share of net debt after accounting for minority interest. Is that right?

Kailash?

So as of now, we are reporting the gross numbers for both the debt and the EBITDA.

But when you show projections like 15 gigs to 16 gigs of assets, and you show me the range of that EBITDA, would that reflect already assets, divestitures to finance this incremental EBITDA stream?

So only the assets which are sold 100% those get taken out fully from both that EBITDA and profits. The rest of the assets are consolidated on a gross basis, and then there's a minority interest takeout at the bottom.

At the net income level. Okay, thank you. Thanks.

Yes.

Your next question comes from Nikhil Nigania with Bernstein.

Yes. Thank you for taking the question. I just had one question, there are two big events happening on the transmission front. One happened last year with implementation of GNA and second coming next year with possibly free transmission going away, interstate transmission going away for renewables? I wanted to understand what implication is it having on your strategy and be, even in the industry, do you see a change in behavior due to these two events?

Yes, so Nikhil, so far we haven't seen a significant change in behavior, but especially the second event is likely to have an impact. Because if in fact, let's say if I win a project today that is going to be commissioned three, four years from now after the full transmission charge has been empty-leveed, and therefore as a buyer of that power I have to pay, let's say, a INR50 for the transmission charge. Then I have to add that to the pure generation charge or the bidding tariff. Now, in a number of cases, that number may end up being more than if I were to produce that power in my own state. And therefore, there will be different views that different states will emerge with. One set of states will say, you know what, it does makes me no sense for me to buy from some other state. I'll do it within my own state, right? And a second set of states, even despite the transmission charge, will still not be competitive. Or the land cost may be too high, or there may be some other costs that I may set that don't compensate them. So for them, the cost will just go up of purchasing renewable energy and there's nothing that can be done about that. But as a result of this, in some of the states which have reasonably good renewable energy resource, but which is not the best, there they may be the development of an STU-based market or an intrastate connectivity-based approach. Now some of those states like Gujarat for example, may have a relatively good enough off-taker credit quality that they will be able to do intrastate bids. But there may be others that may not have a good enough credit quality. And therefore, they may have to get the bidding agency to do state specific bids where the bids are set up for the STU within those state governments. And we've seen things like that in the past when Rajasthan for example had done a second big [Technical Difficulty] in Rajasthan for the local market. So we could have that kind of thing. So what will happen is that there will be a shift in some of the non- [Indiscernible] RE rich states where they start doing own procurement from within their own state. And therefore, we are now looking at how we need to shift our own connectivity strategy to make sure that we block reasonable amount of good sites in state government, even though on an absolute basis they may be more expensive than putting a project let’s say in Rajasthan, no indicator solar. But with the transmission charges it may not be viable. So those are the kinds of things that we are now working on to figure out exactly how this whole dynamic is going to change the spread of renewable energy projects across the country. And basically working to fix our development strategy along with that.

That makes sense. That's very helpful. Just one related question. Once the charges are implemented, I think now the concept of oversizing the asset would supply RTC power or dispatchable power. Would that imply that the transmission charges would be as per the oversized capacity or as per the contracted capacity for the buyer?

They would be as per their contracted capacity, because that's really what you are going to be using. And so the issue is going to be actually that co-located projects may actually make more sense rather than distributed projects. So right now as you know we are putting up wind separately and solar separately, right? Because transmission charges are free. But once you start getting charged for the transmission, then it may make sense to use the transmission line more efficiently to bring down the transmission charges. And that may be the more effective, the more cheaper way of doing it than to be putting it up in the better areas. And so that's the second way in which we are now relooking about project development strategies, which is how do we get places which have both, have good both wind and solar, so that we can think about co-locating and therefore begin on the transmission charge.

Makes sense. Very helpful. Thank you so much for answering my questions.

[Operator Instructions] There are no further questions at this time. That does conclude our conference for today. Thanks you for participating, you may now disconnect.