ReNew Energy Raises FY2027 EBITDA Guidance on Strong First-Half Results

ReNew Energy Glb reported its second-quarter financial results on Tuesday. Below is a transcript of the company's second-quarter earnings call.

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Summary

ReNew Energy Glb reported strong first-half FY2027 results, with significant growth in EBITDA and profit after tax, and the receivables base at an all-time low.

Despite the sale of 400 MW of assets, the company's operating portfolio expanded to 13.8 GW, up 23% year-over-year.

Adjusted EBITDA for Q2 FY2027 was INR 33.6 billion, up 28% year-over-year; profit after tax was INR 6.4 billion, up 37.3%.

The company raised its FY2027 adjusted EBITDA guidance to INR 105 billion to INR 109 billion, reflecting strong performance, particularly in its manufacturing business.

ReNew Energy Glb is advancing its privatization process with a consortium including CPP Investments and the CEO, with regulatory approvals expected in early 2027.

The company made significant progress in project execution, commissioning 1.3 GW in FY2027 to date, with a committed portfolio of 20.5 GW, including 1.7 GW of battery energy storage systems.

The company continues its capital recycling program, expecting approximately $300 million from asset sales.

ReNew Energy Glb improved its credit profile, with Moody's and CARE upgrading their rating outlooks, and a decline in the net debt-to-EBITDA ratio.

The manufacturing business remained profitable, with raised EBITDA guidance and continued progress on cell and wafer facility expansions.

ReNew Energy Glb demonstrated strong ESG performance and was named to TIME magazine's 2026 list of the world's most sustainable companies.

Full Transcript

Operator

Thank you for standing by, and welcome to ReNew Energy Glb's Q2 FY2027 Earnings Conference Call. All participants are in listen-only mode. The call will begin with a presentation, followed by a question-and-answer session. If you would like to ask a question, please press star followed by the number 1 on your telephone keypad. I will now hand the call over to Anunay Shahi. Please begin.

Anunay Shahi

Thank you. Good morning, everyone, and thank you for joining us. We have released a press release announcing our results for the second quarter of FY2027, which ended September 30, 2026. Copies of the press release and earnings presentation are available on the Investor Relations section of the ReNew Energy Glb website at www.renew.com. Joining me on the call today are our Founder, Chairman, and CEO, Sumant Sinha; our CFO, Kailash Vaswani; and our Co-Founder and Sustainability Chair, Vaishali Nigam Sinha.

Following our prepared remarks, we will open the call for questions. Please note that our safe harbor statement is contained in our press release, presentation materials, and materials on the company's website. These statements are important and integral to all of our remarks. There are risks and uncertainties that could cause our results to differ materially from those expressed or implied by these forward-looking statements, and we encourage you to review the press release and presentation on our website for a more complete description.

Our press release, presentation materials, and annual report also contain certain non-IFRS measures, which we have reconciled to the most directly comparable IFRS measures, and these reconciliations are also available on our website, in our press release, presentation materials, and annual report. With that said, I am now pleased to hand the call over to our Founder, Chairman, and CEO, Sumant Sinha. Sumant, please go ahead.

Sumant Sinha

Thank you, Anunay. Good morning, good afternoon, and good evening to everyone, and thank you for joining us for our Q2 and first-half FY2027 earnings call. The first half of this fiscal year has been one of the strongest periods in our history. We continue to deliver on our commitment to profitable growth, with strong growth in EBITDA and profit after tax, receivables at an all-time low, continued successful project execution, and an improving leverage profile, as we had anticipated at the start of the year.

Power demand has also recovered strongly, which continues to support the long-term growth of renewable energy in India. Regarding the highlights for the quarter, please see page six. Our operating portfolio is currently 13.8 GW, up 23% year-over-year after adjusting for the 400 MW of assets sold over the past 12 months. We have commissioned over 1.3 GW in FY2027 to date, including 628 MW in Q2, and approximately 2.7 GW over the past 12 months. Over the last few years, we have consistently delivered on project execution and expect this momentum to continue.

Our committed portfolio is currently 20.5 GW, including 1.7 GW of battery energy storage systems, and our total project pipeline is approximately 27 GW, including letters of award not yet converted to PPAs. This is 2.7 times the size of our portfolio when we listed approximately five years ago. Turning to our financial performance, we continue to deliver consistent profitable growth on a year-over-year basis. In Q2 FY2027, we achieved adjusted EBITDA of INR 33.6 billion, which includes INR 4.1 billion from third-party sales by the manufacturing business. This was up 28% year-over-year. Our profit after tax was INR 6.4 billion, up 37.3% year-over-year. For the first half of FY2027, adjusted EBITDA was approximately INR 64 billion, up nearly 20% year-over-year, and profit after tax was INR 12.4 billion, up 26.2% year-over-year.

We also generated approximately INR 10.2 billion of equity cash flow in Q2 and over INR 23 billion in the first half of FY2027. Compared to last year, in Q2 FY2027 we also benefited from stronger wind generation hours. However, in solar, we continue to see some impact from grid-related curtailment. Our IPP receivables days are currently at 63 days, an all-time low, despite the seasonal impact we typically see in this high-wind quarter. Our credit and leverage profile is also improving. Moody's has revised our rating outlook from Ba2 negative to Ba2 positive, and CARE has similarly revised our outlook from A to A positive. Our manufacturing business continues to be profitable, and the 4 GW cell expansion project is now in its late stages, with commercial operations expected to begin in Q4 of this fiscal year.

Following the announcement of the ALMM for wafers, the 6.5 GW ingot-wafer facility is also under construction, and we will fund it through a combination of internal accruals and external financing. Capital recycling also continues to gain momentum. In June, we completed the sale of a 100 MW solar asset in Tamil Nadu. In August, we signed definitive documents for the sale of over 1 GW of assets, expected to generate approximately $190 million in cash flow. In October this year, we signed definitive documents for the sale of our controlling stake in 3E, a performance management and analytics platform for renewable energy assets in Europe, expected to generate an additional $84 million.

Together, these transactions are expected to generate approximately $300 million, again demonstrating the quality of our assets and our ability to find buyers at attractive valuations. Given the strong performance, particularly in the manufacturing business, we are raising the lower end of our FY2027 adjusted EBITDA guidance from INR 103 billion to INR 105 billion. The updated guidance is now INR 105 billion to INR 109 billion. Now let me hand the call over to Kailash to take you through the next few pages. Kailash, please go ahead.

Kailash Vaswani

Thank you, Sumant. Turning to page seven, an update on the privatization process. As you may recall, on August 11, 2026, ReNew Energy Glb signed a transaction agreement with a consortium comprising CPP Investments and Sumant. The acquisition will be implemented through a UK scheme of arrangement, subject to a vote by non-consortium shareholders. A special committee of independent directors has received an opinion from Rothschild & Co that, from a financial point of view, the cash offer is fair to holders of the cash-out shares.

The committee believes the cash offer and the transaction agreement are fair and reasonable and intends to unanimously recommend that shareholders vote in favor of the scheme. An affiliate of ADIA, holding approximately 51.1% of the voting rights in the shares subject to the scheme, has irrevocably committed to vote in favor of the scheme. Under the scheme, non-consortium shareholders will receive $7.02 per share in cash. Alternatively, subject to certain conditions set out in the scheme document, they may elect to retain their shares and continue as shareholders through a rollover arrangement. On October 28, 2026, ReNew Energy Glb signed a supplemental letter with the consortium. This letter amends the termination provisions for certain substitute awards under the new incentive plan. No other changes were made to the transaction agreement.

We continue to work towards obtaining the required regulatory approvals. The 13E-3 transaction statement, including the preliminary scheme document, has been filed with the SEC and was amended on October 28, 2026. Subject to all conditions being satisfied, we expect the scheme to become effective in Q1 2027. Turning to the industry backdrop, page 13, renewables continue to lead capacity additions in India. In the first half of FY2027, renewables accounted for over 85% of all new power capacity additions. Consistent with recent trends, approximately 25 GW of new renewable capacity was added in the first half, including 21 GW of solar, 3 GW of wind, and 0.7 GW of hydro. As of September 30, 2026, total renewable installed capacity, including large hydro, stood at 299 GW.

This includes 171 GW of solar and 59 GW of wind capacity. On the demand side, as we said at the start of the year, we expected FY2027 power demand to be higher, driven by El Niño and a favorable base year. Demand has been higher than last year in every month so far. First-half FY2027 demand grew nearly 10% year-over-year. October 2026 demand grew 21% compared to October 2025. FY2027 peak demand has reached approximately 271 GW, a new high. Supply is struggling to keep up, especially during non-solar hours.

On September 9, 2026, the peak demand deficit reached approximately 8 GW, with an average evening deficit of 2.5 GW in September. Similarly, in October, peak demand grew 24% year-over-year. All of this is also reflected in rising exchange prices. This demonstrates how important round-the-clock and storage-enabled renewable capacity has become. We believe our growing battery energy storage systems and round-the-clock firm dispatchable renewable projects position us well to meet this demand. Turning to page 14 on project execution, our delivery remains low-risk and on track to meet our annual guidance. Our operating portfolio is 13.8 GW, including 100 MW of battery energy storage systems, a net increase of 19% after deducting the 400 MW sold, and growth of 23% after adjusting for asset sales. In FY2027 to date, we have commissioned 1.3 GW, including 1.2 GW of solar and 132 MW of wind capacity. Looking ahead on the solar side, approximately 200 MW is fully installed and in the late stages of commissioning.

Most of the components required for the remaining FY2027 execution have arrived on site, with the remainder secured through internal production. For battery energy storage systems, 100% of pricing is locked in at attractive levels, and we are on track for this year's execution. For wind, approximately 300 MW is fully installed and in the late stages of commissioning, with 100% of the wind turbines required for the year locked in within budget levels. Most of the land required for the next 12 months has been secured or acquired.

Importantly, over 75% of our 20.5 GW committed capacity has customers rated A- or above, and this proportion will continue to improve as incremental growth comes primarily from central or high-quality commercial and industrial off-takers. Turning to page 15 on the C&I business, we continue to hold one of the largest C&I portfolios in India across five states, at 2.9 GW, with 2.6 GW commissioned, including 338 MW commissioned year-to-date. The share of large tech and hyperscaler customers in our business continues to increase, with Amazon, Microsoft, and Google together accounting for approximately half of our contracted C&I offtake.

With India expected to have approximately 10.7 GW of data center capacity by FY2031, representing a $20 billion market opportunity and 75 TWh of power demand, we believe we are well-positioned to participate in supplying energy to data centers. Turning to page 16 on the manufacturing business, our manufacturing business continued its profitable momentum this quarter. In Q2 FY2027, external sales revenue from modules and cells was approximately INR 12 billion, with adjusted EBITDA from external sales of INR 4.1 billion, compared to INR 3.3 billion in Q2 FY2026, at a margin of approximately 33%. In the first half, adjusted EBITDA from external sales was INR 9.7 billion, compared to INR 8.6 billion in the same period last year.

In Q2 FY2027, we produced 528 MW of cells and 890 MW of modules, with cell efficiency reaching an industry-leading approximately 23.5% and utilization rates also at industry-leading levels. Our external order backlog is approximately 3.3 GW. Due to continued strong performance, we have raised the annual EBITDA guidance for the manufacturing business from the previous INR 10 billion to INR 12 billion to INR 12 billion to INR 14 billion. Please note that we expect approximately 40% to 60% of production to be consumed internally by our IPP business at arm's-length prices, which will not be reflected in the consolidated financial statements.

We also continue to expect some margin moderation in the second half. Regarding the TOPCon expansion of the 4 GW cell facility, civil and structural steel works are complete, the effluent treatment plant and cleanroom are near completion, all equipment has arrived on site, and the printing lines are installed. We expect to produce the first cells by January 2027. For the ingot-wafer facility, land and key approvals are in place. Civil work has begun, and basic engineering design is near completion. We expect commercial operations in the first half of 2028, with funding raised through internal accruals and external financing.

Turning to page 18, our Q2 results reflect strong operational execution, continued profitable growth, and prudent capital allocation. As of September 30, 2026, our total portfolio was approximately 20.5 GW, including 1.7 GW of battery energy storage systems. Operating capacity was 13.8 GW, including 5.7 GW of wind, 7.9 GW of solar, 99 MW of hydro, and 100 MW of battery energy storage systems. We also have 6.6 GW of committed capacity, including 1 GW of wind, 4 GW of solar, and 1.6 GW of battery energy storage systems.

Since April 2025, we have commissioned approximately 2.7 GW of committed projects, primarily consisting of approximately 2.2 GW of solar, 439 MW of wind, and 25 MW of battery energy storage systems. In terms of consolidated results for Q2 FY2027, revenue grew 28% year-over-year, adjusted EBITDA grew 28%, and profit after tax grew 37%. In Q2 FY2027, total revenue was INR 49.6 billion, revenue was INR 46.5 billion, adjusted EBITDA was INR 33.6 billion, and profit after tax was INR 9.9 billion, compared to INR 5.6 billion in the same period last year. In the first half, revenue grew 21%, adjusted EBITDA grew 20%, and profit after tax grew 26%. Q2 FY2027 adjusted EBITDA margins: IPP business excluding CE was 82.9%, manufacturing was 33.3%, and on a consolidated basis was 69.3%.

We maintain prudent capital allocation, with net debt to last twelve months adjusted EBITDA for operating projects declining to approximately 5.3 times from 5.7 times at the end of the previous quarter. Of our net debt of INR 711.3 billion, INR 26.7 billion represents contributions from joint venture partners, and approximately INR 104.7 billion relates to projects under construction, which have partially drawn debt, involving approximately 1.5 GW of renewable projects.

Excluding these projects that do not contribute EBITDA, net debt for operating projects was INR 579.9 billion. We remain committed to reducing overall leverage, with a portion of capital recycling proceeds to be used for this purpose. The 1 GW of assets locked in under the definitive agreement is expected to generate $190 million in cash flow at closing, and we expect an additional $84 million from the sale of the controlling stake in 3E.

The improvement in our credit profile has also been externally recognized, with both Moody's and CARE upgrading our rating outlooks. On working capital, as shown on page 27, as of 2026, our IPP receivables days were 63 days, an improvement of 21 days year-over-year and 31 days over two years, an all-time low, aided by the INR 5.7 billion received from Andhra Pradesh in July 2026. Manufacturing DSO was 9 days. As central government counterparties expand within our portfolio, over 75% of our 20.5 GW portfolio will be with high-quality off-takers who pay within 30 days.

Our balance sheet remains robust. As of September 30, 2026, cash and cash equivalents, bank balances, and investments were INR 95.1 billion. I will now hand the call over to Vaishali for an update on ESG and sustainability.

Vaishali Nigam Sinha

Turning to page 21, as global sustainability moves from qualitative targets to rigorous operational execution, value chain reporting has become a fundamental expectation for transparency and accountability. Driven by these evolving expectations, we continue to strengthen our ESG approach by enhancing nature-based disclosures and deepening supply chain engagement. On the nature front, ReNew Energy Glb joined the Taskforce on Nature-related Financial Disclosures adopters community, becoming the second Indian power utility to do so.

We completed ESG assessments of 100% of our critical suppliers for the third consecutive year, with zero suppliers classified as high-risk. We also expanded engagement to tier-2 suppliers through a pilot program covering 15 value chain partners, further embedding ESG practices across our broader supply chain. ReNew further strengthened its global sustainability credentials by being named to TIME magazine's 2026 list of the world's most sustainable companies, the only Indian utility to receive this recognition.

Turning to page 22, we continue to make steady progress on our ESG goals. Starting with our environmental commitments, we remain focused on advancing our net-zero agenda. Renewables currently account for nearly 36% of our manufacturing business's electricity consumption. We also published a transition plan aligned with ReNew's SBTi-validated 2040 net-zero target. A just and inclusive energy transition must create opportunities not only for the planet but also for people and communities.

At its core, our community initiatives have now positively impacted the lives of over 2 million people. Under the Surya project, 532 women have been trained as solar technicians, with 115 successfully employed. Women currently represent 18.07% of our total workforce, with board diversity at 22%. Our ESG performance also continues to be reflected in strong external ratings. We are currently awaiting our 2026 ESG rating results and will disclose progress on all ratings at upcoming meetings.

I will now hand the call over to Kailash for some guidance.

Kailash Vaswani

Thank you, Vaishali. On guidance, page 24, supported by strong first-half results, including the manufacturing business, we are raising the lower end of our FY2027 consolidated adjusted EBITDA guidance from INR 103 billion to INR 105 billion, bringing the range to INR 105 billion to INR 109 billion. This now includes INR 12 billion to INR 14 billion from the manufacturing business and INR 1 billion to INR 2 billion from asset sale gains.

We continue to expect to construct 1.6 to 2.4 GW in FY2027 and generate INR 18 billion to INR 22 billion in equity cash flow. For the total 20.5 GW committed renewable portfolio, including 1.7 GW of battery energy storage systems, we continue to expect steady-state adjusted EBITDA of INR 134 billion to INR 140 billion and equity cash flow of INR 32 billion to INR 36 billion, assuming normal weather conditions and excluding the contribution from the manufacturing business. Please note that this includes the 1 GW of projects for which we have signed definitive agreements to sell.

With that, we are happy to take questions.

Operator

Thank you. If you would like to ask a question, please press star and the number 1 on your telephone and wait for your name to be announced. If you would like to cancel your request, please press star and the number 2. If you are using a speakerphone, please pick up the handset before asking your question. As a reminder, if you would like to ask a question, please press star and the number 1 on your telephone and wait for your name to be announced.

Sumant Sinha

Operator, if there are no questions on the phone, we have received a question via the webcast link.

Operator

Certainly, sir.

Sumant Sinha

May I begin?

Operator

Yes, you may begin.

Sumant Sinha

Okay, the question is as follows, let me read it: Can you quantify how significant the curtailment impact has been this year? Also, can you comment on how the monsoon has been this year and how you think that will impact the company? If you could elaborate on the plan to finance upcoming debt maturities, perhaps I can answer the first part of the question, and Kailash will handle the rest. On curtailment, there has been some impact on our solar projects. This quarter, the impact was close to approximately $9 million to $10 million due to T-GNA on some of our recently commissioned solar projects, and approximately $18 million to $19 million for the entire first half. That said, the situation is improving during the year, and as some of you may have read, the Indian government is discussing some matters to see if some relief can be provided.

But that is the extent of the impact this year. Regarding the monsoon, while the monsoon was weaker, that said, our wind generation hours this year have been significantly better than last year.

Kailash Vaswani

Yes, regarding upcoming debt maturities, including some other debt not in bond form, the total maturity size is close to approximately $1.7 billion. Of this, we currently have full visibility on $1.25 billion, meaning we have secured commitments, and the remainder matures mid-next year, which we will refinance as we approach the date.

Sumant Sinha

I think there is also a question from Maheep Manloi of Mizuho. The question is: How do you view the Indian manufacturing sector next year? I guess this refers to the performance of the entire manufacturing sector. So, Maheep, as we have also highlighted in the presentation, we currently have operating module and cell capacity. While margins on the module side have declined significantly, we are still seeing reasonable and strong margins on the cell business this year, at least so far.

While we do expect margins to moderate in the future as more cell capacity comes online, at least so far, we are still seeing strong margins, which is also reflected in our manufacturing performance, namely EBITDA growth compared to last year. If there are no other questions, operator, we can conclude the call.

Operator

Certainly. There are no questions on the audio bridge at this time. This concludes today's call. Thank you for your participation. You may now disconnect.

Disclaimer: This transcript is for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. The statements of company participants and analysts reflect their views as of the date of this call and are subject to change without notice.