ReNew Energy Global Plc (RNW) Q2 2027 Earnings Report, Transcript and Summary

Thank you for standing by, and welcome to Renu's 2Q FY 2027 Earnings Report. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Anunay Shahi. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining us. We have put out a press release announcing results for the second quarter of fiscal 27. For the period ended 09/30/2026. A copy of the press release and the earnings presentation are available in the Investor Relations section of Renu's website at www.renew.com. With me today are Sumant Sinha, our founder, Chairman, and CEO; Kailash Vaswani, CFO, and Vaishali Nigam Sinha, cofounder and chairperson sustainability. After the prepared remarks, we will open the call for questions. Please note, that 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 and the presentation for a more complete description. Also contained in our press release, presentation materials, and our annual report are certain non-IFRS measures. That we reconcile to the most comparable IFRS measures, and these reconciliations are also available on our website in the press release presentation materials, and our annual report. With that, it is now my pleasure to hand it over to our founder, chairman, and CEO, Sumant Sinha. Sumant, over to you.

Yeah. Thank you, Anunay. Good morning, good afternoon, and good evening, everybody. I am glad to have you all on our earnings call for the second quarter. And the first half of fiscal year 27. The first half of this fiscal has been 1 of the strongest in our history. We have continued to deliver on our promise of profitable growth with strong growth in EBITDA, and profit after tax, our lowest ever receivable days, continued success in project execution, and an improving leverage profile. As we had expected at the start of the year, power demand has also come back strongly and this continues to support the long term growth of renewable energy in India. Turning to the highlights for the quarter on page 6. Our operating portfolio now stands at 13.8 gigawatts. Which is a 23% increase year on year after adjusting for the 400 megawatts of assets that we sold during the last 12 months. We have commissioned over 1.3 gigawatts so far in fiscal 27, including 28 megawatts in the second quarter. And about 2.7 gigawatts over the trailing 12 months. Have consistently delivered on our project execution over the past few years, and expect the momentum to continue. Our committed portfolio is currently 20.5 gigawatts including 1.7 gigawatts of best, our total pipeline is approximately 27 gigawatts. Including LOAs, which have not yet been converted into PPAs. This is 2.7 times the size of our portfolio, at the time of listing about 5 years ago. Coming to our financial performance, we continue to deliver profitable growth consistently on a year-on-year basis In Q2 of fiscal 27, we delivered adjusted EBITDA of INR 33.6 billion including INR 4.1 billion from third party sales, from our manufacturing business. This is up 28% year-on-year. Our profit after tax was INR 6.4 billion up 37.3% year-on-year. For the first half of fiscal 27, adjusted EBITDA was approximately INR 64 billion up almost 20% year-on-year. And profit after taxes INR 12.4 billion up 26.2%. We also generated approximately INR 10.2 billion of cash flow to equity in the second quarter and more than INR 23 billion in the first half of fiscal 27. We have also benefited from stronger wind PLFs in Q2 fiscal 27. Compared to last year. However, on the solar side, we have continued to see some impact of grid related curtailment. Our IPT DSO is now at 63 days. Our lowest ever. Despite the seasonality we usually see in this high wind quarter. Our credit and leverage profile also continues to improve. Moody's has revised our outlook to B2 with a positive outlook. From B2 with a negative outlook. And Care has similarly revised our rating outlook from A to A+. Our manufacturing business continues to be profitable, and our 4 gigawatt cell expansion is now in advanced stages. With commercial operations expected to begin in the fourth quarter of this fiscal. Work is also underway on our 6.5 gigawatt ingot-wafer facility. Which we announced following the introduction of the 3 for wafers. And which we will fund through a mix of internal accruals and an external fundraise. Capital recycling also continues its momentum. In June, we closed the sale of a 100 megawatt solar asset in Tamil Nadu. In August, we signed definitive documents for the sale of over 1 gigawatt of assets is expected to generate around a $190 million of cash flow. And in October of this year, we signed definitive documents for the sale of our controlling shareholding in 3E, a European renewable energy asset performance management and analytics platform, which is expected to generate another $84 million. Together, these transactions are expected to bring in approximately $300 million and once again, demonstrate the quality of our assets and our ability to find buyers at attractive valuations. On the back of the strong performance, particularly from our manufacturing business, we are raising the lower end of our fiscal 27 adjusted EBITDA guidance from INR 103 billion to INR 105 billion. The updated guidance is now INR 105 to 109 billion. Let me now hand over to Kailash to take us through the next few pages. Kailash, over to you.

Thank you, Sumant. Turning to page 7. An update on the take-private process. As you will recall, on 08/11/2026, the new signed a transaction agreement with the consortium comprising of CPP investments in Sumant. The acquisition will be affected through a UK scheme of arrangement. Which is subject to a vote by the non-consortium shareholders. The special committee comprising of independent directors received Rothschild & Co.'s opinion that the cash offer is fair from a financial point of view to the holders of cash out shares. The committee considers the cash offer and the transaction agreement fair and reasonable and intends to unanimously recommend the shareholder vote in favor of the scheme. Green Rock, Platinum Cactus, a 2019 trust, an affiliate of ADIA, who approximately hold 51.1% of the voting power of the shares subject to the scheme have irrevocably undertaken to vote in favor of it. Under the scheme, non-consortium shareholders may receive $7.02 per share in cash. Alternatively, subject to certain conditions as will be laid out in the scheme document, they may elect to keep their shares and remain shareholders to a rollover arrangement. On 10/28/2026, the New and the consortium signed a side letter. It amends the legal provisions for certain replacement awards under the ReNew Incentive Plan. Otherwise, the transaction agreement is unchanged. We continue to work towards the required regulatory approvals. The schedule 13 e 3 transaction statement including the preliminary scheme document, has been filed with the SEC and it was amended on 10/28/2026. Subject to all conditions being satisfied, including regulatory approvals, we expect the scheme to become effective in the first quarter of calendar year 27.

Turning to industry backdrop on Slide. 13. Renewables continues to lead capacity addition in India. They made up more than 85% of all power capacity added in the first half of fiscal year. In line with recent trends. About 25 gigawatts of renewable energy capacity was added in the first half, including 21 gigawatts of solar. 3 gigawatt of wind, and 0.7 gigawatts of hydro. As of 09/30/2026, installed renewable energy capacity, including large hydro, stood at 299 gigawatts.

That includes 171 gigawatts of solar, and 59 gigawatts of wind capacity. On the demand side, as we have said at the start of the year, we expect power demand to rise in fiscal 27, helped by El Nino and a favorable base year.

Demand has been higher than last year and every month so far. Demand for the first half of fiscal 27 was up almost 10% year-on-year. Demand in October 2026 compared to October 2025 was up by 21%. Peak demand has already reached around 271 gigawatts in 5.03 thousand which is a new high. Supply is struggling to keep up, especially outside solar hours. On 09/09/2026, the peak demand deficit reached around 8 gigawatt, and the evening deficit averaged 2.5 gigawatts during September. Again, in October, peak demand is up 24% year-on-year. All of this has also been reflected in rising exchange prices. This shows how important round the clock and storage backed renewable energy capacity has become.

We believe our growing BESS and C&I business. Turning to Slide 14.

Our delivery remains derisked and on track for our annual guidance. Our operating portfolio stands at 13.8 gigawatts, including 100 megawatts or 52 megawatt-hours of BESS. Our portfolio is up 19% year-on-year, net of the 400 megawatts sold, and up 23% adjusting for asset sales. In fiscal 27 to date, we have commissioned 1.3 gigawatts, comprising 1.2 gigawatts of solar and 32 megawatt of wind capacity.

Looking ahead for solar, around 200 megawatt has been erected and is in advanced stages of commissioning. The majority of modules for the rest of the 03/27 execution are already at site, and the balance is secured through in-house. For BESS, 100% of pricing is locked in, at attractive rates, and we are on track for this year's execution.

For wind, around 300 megawatt has been elected and is in advanced stages of commissioning, and 100% of the wind turbines for the year are locked in within budgeted levels. Land is largely tied up or acquired for the next 12 months. Importantly, more than 75% of our 20.5 gigawatt committed capacity is with customers rated A+ or above. And this will continue to become higher with incremental growth largely coming from government-owned entities. Turning to Slide 15.

We continue to have 1 of the largest C and I portfolios in India, at 2.9 gigawatt across 5 states. Of which 2.6 gigawatt is commissioned including 38 megawatt that we commissioned so far this year. Our share of Big Tech and hyperscaler customers keeps increasing, with Amazon, Microsoft, and Google collectively accounting for about half of our contracted off take in our C and I business. Around 10.7 gigawatt of data center capacity expected in India by 2031, representing a $20 billion market opportunity and 75 terawatt hour of power demand, we believe we are well placed to participate in energy supply to data centers. Turning to our manufacturing business on Slide 16.

Our manufacturing business continued its profitable run in this quarter as well. In Q2 of fiscal 27, revenue from external sales of modules and cells was around 12 billion rupees. And adjusted EBITDA from external sales was 4.1 billion rupees. Compared to INR 3.3 billion in Q2 of fiscal 2026. At a margin of about 33%. For the first half, adjusted EBITDA from external sales was INR9.7 billion compared to INR8.6 billion in Q2 fiscal 26. We produced with 28 megawatt of cells and 890 megawatts of modules during the quarter with best in class cell efficiency of around 23.5% and industry leading utilization rates. Our external order book stands at approximately 3.3 gigawatt. As a result of our continued strong performance we have updated the annual EBITDA guidance from our manufacturing business to INR 12 to 14 billion. From INR 10 to 12 billion rupees previously. Please note that we expect around 40 to 60% of production to be used captively by our IPP business at arm's-length pricing which does not get reflected in the consolidated financials. We also continue to expect some moderation of margins in the second half of the year.

On our TOPCon expansion of 4 gigawatt cell plant, civil works and PSV works are completed. The ATP and clean room are almost complete. All tools are on the site. Printing lines are installed, and we expect to produce the first cells by January 2027. On the ingot wafer plant, land and major approvals are in place. Civil work has started. And basic engineering is almost done. We expect commercial operations in the first half of calendar year 28, funded through internal accruals and an external fundraise.

Turning to page 18, Our Q2 results reflect strong operating execution, continued growth in earnings, and disciplined capital allocation. As of 09/30/2026, our total portfolio was approximately 20.5 gigawatt including 1.7 gigawatts of BESS. Operating capacity stood at 13.8 gigawatt, comprising 5.7 gigawatt of wind, 7.9 gigawatt solar, 99 megawatts of hydro and 100 megawatts or 52 megawatt-hours of BESS.

We also had 6.6 gigawatt of committed capacity, including 1 gigawatt of wind, 4 of solar, and 1.6 gigawatts of BESS.

Since April 25, we have commissioned about 2.7 gigawatt comprising mainly of around 2.2 gigawatt of solar, 39 megawatt of wind, and 25 megawatts of BESS. On consolidated performance for Q2 of fiscal 27, revenue was up 28% year-on-year. Adjusted EBITDA was up 28%. And PAT was up 37%. For Q2 fiscal 27, income was 49.6 billion rupees. Our revenue was 46.5 billion Adjusted EBITDA was INR 33.6 billion. $350 million. And PAT was INR 9.9 billion compared to INR 5.6 billion of PAT the same quarter last year. For the first half, revenue was up 21%, adjusted EBITDA was up 20%, and PAT was up 26%. Adjusted EBITDA margin for Q2 of fiscal year 27 were 82.9% for IPP, excluding CE, 33.3% of manufacturing, and 69.3 on a consolidated base. We remain disciplined in capital allocation, and our net debt to trailing 12 months of adjusted EBITDA for operating projects has come down from to almost 5.3 x from 5.7x at the end of last quarter. Of our net debt of 711 billion INR26.7 billion represents contributions from our JV partners and approximately $104.7 billion rupees relates to under construction project, with debt partially drawn down for about 1.5 gigawatt of renewable energy, including BESS. Excluding these projects which do not contribute to EBITDA, net debt for operational projects stands at $580 billion. We remain committed to reducing our overall leverage and a part of our capital recycling proceeds will be used towards this. The 1 gigawatt of assets locked in under definitive agreement are expected to result in $190 million of cash flow on closing and we expect another $84 million from the sale of our controlling shareholding in 3E. The improvement in our credit profile is also being recognized externally with positive outlook revisions from Moody's and CARE. On working capital, as shown on slide 27, our ITP DSO was 63 days as of September 2026, an improvement of 21 days year on year and 31 days over 2 years. And our lowest ever, helped by the INR 5.7 billion we received from Andhra Pradesh in July 2026. Manufacturing DSO was 9 days. As central government counterparties became a larger part of our portfolio, more than 75% of our 20 account portfolio will be with high quality offtakers that pay within 30 days. Our balance sheet remains robust. Cash and cash equivalents bank balances, and investments, including short and long term investments, stood at 95.1 billion rupees, as of September 30, 2026. I will now hand over the call to Vaishali for ESG and sustainability update.

Moving to slide 21. As global sustainability transitions from qualitative goals to rigorous operational execution, value chain reporting has become a baseline expectation for transparency and accountability. Driven by these evolving expectations, we continue to strengthen our ESG approach to enhance nature based disclosures and deeper supply chain engagement. On nature, ReNew joined the task force on nature related financial disclosures TNFD adopter community, as the second India-based electric utility to do so. We completed ESG assessments for 100% of our critical suppliers for the 3rd consecutive year with zero suppliers classified as high risk. We also extended our engagement to tier-2 suppliers through pilot covering 15 value chain partners further embedding ESG practices across our broader supply chain. ReNew further strengthened its global sustainability credentials by being named among TIME Most Sustainable Companies in 2026. The only India based utility company to receive this recognition. Turning to slide 22, we continue to make steady progress against our ESG targets. Starting with our environment commitments, we remain focused on advancing our net zero agenda Renewable energy now accounts for nearly 36% of our businesses electricity consumption. We have also published a transition plan aligned with ReNew's SBTi-validated net-zero 2020 ambition. A just and inclusive energy transition must create opportunities not only for the planet, but also for the people and communities at its heart. Our community initiatives have now positively impacted more than 2 million lives. Under project Surya, 532 women have been trained as solar technicians 115 successfully placed. Women currently represent 18.07% of our workforce. While board diversity stands at 22%. Our ESG performance also continues to be reflected in strong external ratings. We are currently awaiting results from ESG ratings for 2026. And will disclose progress across all ratings in our upcoming meeting. I will now turn it over to Kailash to take us through some guidance.

Thank you, Vishali. Turning to guidance on page 24. Backed by the strong performance in the first half, including from our manufacturing businesses, We are raising the lower end of our fiscal 27 consolidated adjusted EBITDA guidance INR 103 billion to INR 105 billion taking the range to INR 105 to 109 billion. This now includes INR 12 billion to INR 14 billion from manufacturing up from INR 10 billion to INR 12 billion earlier. and INR 1 billion to INR 2 billion from asset sale gains. We continue to expect to construct between 1.6 to 2.4 gigawatt during fiscal year 27 and to generate cash flow to equity of 18 to 22 billion rupees. The total committed RE portfolio of 20.5 gigawatts, including 1.7 gigawatts of BESS, continue to expect run rate adjusted EBITDA of INR 134 to INR 140 billion and cash flow to equity of INR 32 to 36 billion. Assuming normal weather patterns and excluding contribution from our manufacturing business. Please note that this includes the 1 gigawatt of projects for which we have signed definitive agreements to sell. With that, we will be happy to take questions.

TThank you. Please wait for your name to be announced. If you wish to cancel your request, please press 2. If you are on a speaker phone, please pick up your handset to ask a question.

Once again, if you wish to ask a question, Operator, I think if we do not have any questions on the phone, we have 1 question through the webcast link.

Certainly, sir. Should I go ahead?

Yes.

You can go ahead.

Yeah. So the question is. And I will read it out. Is can you quantify what the impact of curtailment has been this year? And can you also comment on how the monsoon has been this year and how do you see this impacting the company? And if you could expand on how you plan to fund the upcoming debt maturities.

Maybe I can take the first part of the question, and Kailash will handle the rest. So on curtailment, so there has been some impact of curtailment on our solar projects. So this quarter, the impact was close to around $9 to $10 million. On account of PG and A. For some of our recently commissioned solar projects and for the full half year it is around $18 to $19 million. Having said that, it is improving over the course of the year. And as you some of you may have read, there are also few things underway with the government of India, and they can provide some relief for it. But that is the quantum of impact this year. With respect to monsoon, while the monsoon has been weaker, having said that, the wind PLFs this year have been significantly better than they were last year.

Yeah. On the maturities which are coming up of almost around including some other debt, which is not in the form of bonds. Total maturities are almost $1.7 billion. Of that, currently, we have a full line of sight of $1.25 billion so that we already got commitments in place, and the balance is something which is due in the middle of next year, which we will refinance closer to the date.

I think there is 1 more question from Maheep Mandloi of Mizuho. The question is, how do you think about India manufacturing next year?

I guess the reference is to how the manufacturing sector as a whole is doing. So Maheep, you know, as we have also highlighted in our presentation, we currently have an operating module--

We have operating module and cell capacity. So while the margins on the module side of things have reduced, significantly, but we are seeing reasonable margins and strong margins on the cell business this year as well, at least so far.

While we do expect some moderation going forward as more cell capacity comes online. But so far, at least, we are seeing strong margins, and that is what is been reflected in our manufacturing results as well, which is where the EBITDA has grown compared to last year.

If there are no further questions, operator, we can close the call.

Certainly. We do not have any questions on the audio bridge at this time. That does conclude our conference for today. Thank you all for participating. You may now disconnect.