ReNew Energy Global Q1 2026 Earnings Call Transcript

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Provided by Quartr
August 14, 2025

Key Takeaways

  • Positive Sentiment: Since July, Renu commissioned 2.25 GW of new renewable energy capacity, marking a 23% portfolio growth and secured PPAs for 3.7 GW more, reaffirming its FY26 construction guidance of 1.6–2.4 GW.
  • Positive Sentiment: Delivered an adjusted EBITDA of INR 27.2 billion in Q1 (up 43% YoY) and profit after tax of INR 5.1 billion, while improving leverage metrics and confirming FY26 financial guidance.
  • Positive Sentiment: The manufacturing arm, with 6.4 GW module and 2.5 GW cell capacity, produced 900 MW of modules and 400 MW of cells, raised its FY26 EBITDA guidance to INR 8–10 billion, and attracted a US$100 million investment for a ~10% stake.
  • Positive Sentiment: Renu surpassed its environmental targets by cutting Scope 1 & 2 emissions by 18.2% (vs. a 12.6% goal) and boosting water savings by 51%, while achieving five years of carbon neutrality for Scopes 1 & 2.
  • Neutral Sentiment: Despite a more aggressive bidding environment with lower-return auctions, Renu remains selective, potentially foregoing projects that don’t meet its return hurdle.
AI Generated. May Contain Errors.
Earnings Conference Call
ReNew Energy Global Q1 2026
00:00 / 00:00

There are 7 speakers on the call.

Operator

Good morning, everyone, and thank you for joining us. We put out a press release announcing results for the fiscal twenty twenty six first quarter ended 06/30/2025 last night, and a copy of the press release and the earnings presentation is available in the Investor Relations section on Renu's website at www.renu.com. With me today are Suman Singhar, our Founder, Chairman and CEO Kailash Vaaswani, our CFO and Vishali Nigham Sena, Co Founder and Chairperson Sustainability. After the prepared remarks, which we expect will take about thirty minutes, we will open the call for questions.

Operator

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 we furnish in our Form six ks 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 comparable IFRS measures and these reconciliations are also available on our website in the press release, presentation materials and our annual report.

Operator

It's now my pleasure to hand it over to our CEO, Sumant Sinha.

Speaker 1

Yes. Thank you, Anune. Good morning, good afternoon, good evening, everyone, and glad to have you all on our earnings call for the 2026. We continue to pursue excellence and our vision is to be a global leader in clean energy. We recently filed our 20 F and our second integrated report highlighting our unwavering commitment to transparency and sustainability.

Speaker 1

As we look at the year ahead, we are leaving no stone unturned to outperform over previous years. While there will always be factors that are beyond our control, our focus towards improving margins and capital discipline will continue to create shareholder value. Some of the investments we have made over the past few years, such as our manufacturing business, have started bearing fruit for us. Turning to highlights for the quarter, since July, we have commissioned around 2.25 gigawatts of renewable energy capacity, marking a 23% growth in our portfolio after adjusting for asset sales. We also continue to expand our committed portfolio and have signed PPAs for 3.7 gigawatts of installed renewable energy capacity for projects that should provide returns towards the higher end of our targeted IRR range, if not better.

Speaker 1

We reiterate our FY twenty twenty six megawatt guidance to remain on track to complete construction of 1.6 to 2.4 gigawatts of capacity in fiscal twenty twenty six. In fiscal twenty twenty six, we also expect several of the unsigned PPAs to be signed, providing us with an even clearer path beyond the current 18.2 gigawatts of committed portfolio, along with clarity on execution timelines. We will continue to be disciplined and highly selective in our approach towards bidding for future growth, and will look to secure projects with a lower risk and higher return profile. Turning to our financial highlights, we demonstrated superior performance this quarter, delivering an adjusted EBITDA of INR27.2 billion, which is a 43% growth year over year. In the 2026, we have a profit after tax of INR5.1 billion, higher than the profit for the full fiscal twenty twenty five.

Speaker 1

We have also meaningfully improved our leverage metrics for operational projects and we reaffirm our FY 2026 guidance. Our manufacturing business comprising of an operational capacity of 6.4 gigawatts of modules and 2.5 gigawatts of cells is fully stabilized and produced 900 megawatts of modules and 400 megawatts of cells in this quarter. Manufacturing also made a meaningful contribution of Rs. 5,300,000,000.0 towards adjusted EBITDA for

Speaker 2

the

Speaker 1

quarter, and we are revising our FY 2026 adjusted EBITDA guidance from the Manufacturing business upwards to INR 8,000,000,000 to 10,000,000,000. We are also steadfast in our ESG commitments, and the second edition of our integrated report is a testament to the standards we hold ourselves to. To name a few, during the year, we successfully reduced our Scope one and Scope two emissions by 18.2% from the FY 'twenty two baseline, surpassing our target of 12.6% and saved 540,372 cubic meters of water, marking a 51 improvement. Turning to Page nine, execution is our topmost priority and a key differentiator for us. We have commissioned over 2.25 gigawatts of capacity over the last twelve months or so, and reiterate our guidance to complete the construction of 1.6 gigawatts to 2.4 gigawatts in fiscal twenty twenty six.

Speaker 1

Year to date, we have commissioned more than 700 megawatts, which is split into more than six fifty megawatts of solar capacity and about 50 megawatts of wind. In addition, we have commissioned over 500 megawatts of wind and about 300 megawatts of solar that have already been erected and will enable us to hit our construction targets for this year. We also continue to be optimistic about signing PPAs from our current pipeline in the current fiscal year. Turning to Page 10, our solar manufacturing facilities are fully ramped up and currently producing over 10 megawatts of modules and five megawatts of cells on a daily basis. In the first quarter of this year, we produced over 900 megawatts of modules, operating at a high utilization and efficiency levels.

Speaker 1

We have current third party orders to sell approximately 800 megawatts more this fiscal, with close to 1.9 gigawatts already delivered till date. Earlier this year, in May, we secured a marquee investment from British International Investments for over US100 million dollars for an approximate 10% stake in the solar manufacturing business, and we expect the transaction to close by the end of the 2026. Along with this, we are pleased to say that the construction on our new four gigawatt Topcon cell facility is well underway, with land acquisition completed and civil works already having been started. Our manufacturing business has started contributing meaningfully to the consolidated P and L by delivering an adjusted EBITDA of INR 5,300,000,000.0 this quarter at a margin of over 40%. The EBITDA contribution in this quarter was a bit higher than normal as most of the production went towards external sales, the proportion of which should decline somewhat in the next few quarters.

Speaker 1

In addition, the margin was slightly higher due to some cost advantages and some procurement ahead of time, which may normalize to some extent. Now let me hand it over to Kailash to talk more about the finance highlights.

Speaker 3

Thanks, Sumant. Turning to page 12, we continue to deliver consistent growth across all our performance indicators. Since the same time last year, we have constructed over 2.2 gigawatts of projects, a 23% increase in operating capacity after adjusting for the 600 megawatts sold during the trailing twelve months. Our cost optimization initiatives continue to help us with EBITDA margins in the IPP business improving from 80.7% to almost 82%. Our profit after tax stands at 13 times compared to q one f y twenty five, largely driven by increase in megawatts, higher PLF that we got quarter on year on year, meaningful contribution from the manufacturing business, as well as our cost optimization measures.

Speaker 3

Turning to page 13 and the EBITDA walk. While we saw subdued solar PLFs this quarter due to low irradiation from the early months onset of monsoons, however, higher wind PLFs made up for the loss from solar, resulting in a net positive impact of INR 1,400,000,000.0 on EBITDA year over year. The new projects that we commissioned over the last twelve months contributed INR 1,800,000,000.0 to our EBITDA, while the manufacturing business came in at INR 5,300,000,000.0. Over the past year, we have sold over 600 megawatts of solar assets as well as a transmission line due to which we have lost close to 300,000,000 of EBITDA this for this quarter. Leverage at the operating asset level continues to be well below the six x threshold that we have set.

Speaker 3

On a trailing twelve month basis, the leverage was around 5.7 times EBITDA, excluding our under construction portfolio and the convertible debt contribution from our JV partners. The cash flow from our manufacturing business have also contributed meaningfully towards reduction in our leverage levels. As we continue to grow our portfolio, the proportion of under construction projects as a percentage of overall portfolio should come down and will improve the ratios in addition to our efforts to be disciplined in our approach towards capital deployment. Just to update on the offer from the consortium, we announced Renu had received a final, revised nonbinding offer at US dollar 8 on July 3. Discussions between the consortium and the special committee are ongoing, and the special committee has indicated an update will be provided to the shareholders no later than thirtieth September twenty twenty five.

Speaker 3

Let me now hand it over to Vishali for comments on ESG.

Speaker 4

Thank you, Kailash. Now turning to Page 15. I'm delighted that we released our renewed second annual integrated report for fiscal year twenty twenty five. This affirms our commitment to transparency, accountability and leadership in ESG reporting. Building

Speaker 3

on

Speaker 4

the strong foundation of our inaugural edition, the FY 'twenty five report set new benchmarks in our ESG vision, performance and disclosures. The report has been crafted in alignment with IIRC, GRI, SATP, IFRS F2, UNGC among other global reporting frameworks. There are significant enhancements over the previous year's report, including the integration of the Business Responsibility and Sustainability Report, which is referred to as the BRSR framework to align with Indian regulatory requirements, strengthened interlinkages between financial and nonfinancial indicators and a deeper articulation of the interplay amongst the six capitals, namely financial, manufacturing, natural, social, relationship and intellectual capital. There is an innovative introduction of an AI chat box for seamless navigation and learning more about the integrated report, positioning the fiscal year 'twenty five report as a first of its kind smart report. The financial and the nonfinancial parameters for FY 'twenty four'twenty five have been externally assured by S.

Speaker 4

R. Bartleby and Company, LLP and E and Y, respectively. Renewal's FY 'twenty five ESG performance highlights. In FY 'twenty 04/2005, Renewal has made significant strides in its ESG efforts, showcasing a strong commitment to safety, sustainability and social responsibility. Environment, we successfully reduced our scope one into emissions by 18.2% from the FY 'twenty two baseline, surpassing our target of 12.6% and saved five and forty thousand three hundred and seventy two millimeter cube of water, marking a 51% improvement.

Speaker 4

Our operations saw 76% of electricity from green sources, exceeding our 25% target of 50%, and we achieved carbon neutrality for Scope one and two emissions for the fifth consecutive year. On the social front, through our socioeconomic programs, we have positively impacted over 1,700,000 lives with a CSR spend of INR $320,000,000 this year. Our workforce today reflects a 15% gender diversity rate with women now representing 12% of STEM roles approximately. We achieved a lost time injury frequency rate, LTIFR of 0.21, a 5% reduction from previous year, and for the second consecutive year as well. 100% of our critical suppliers were assessed against ESG criteria, which is a big step towards our supply chain commitment.

Speaker 4

Governance. Our Board composition reflects our commitment to diversity and independence with women marking up 40% and independent directors comprising 60% of the Board. On Page 16, we highlight the key value additions we have made with this year's annual integrated report. Our key value addition this year is our voluntary alignment with BRSR, as I mentioned, India's sustainability reporting framework underscoring our dedication to enhancing ESG transparency in line with national and global expectations. For the first time also, we have mapped material ESG issues to our which is the Enterprise Risk Management Framework, marking a significant step towards embedding sustainability into our enterprise wide risk strategy.

Speaker 4

We have also included a detailed progress showcased against our firm wide sustainability targets, reinforcing accountability and our commitment to delivery. Additionally, we have expanded our DECOB strategy to cover manufacturing operations and continued our alignment with the EU tech economy. Now turning to Page seventeen to review the progress made across our ESG targets. We remain committed to our overall sustainability targets. We completed DLCA, which is the life cycle assessment of a manufacturing solar module in Jaipur and published a verified EPD, which is the Environment Product Declaration under the International EPD System.

Speaker 4

Additionally, two of our sites are now certified as water positive for operational water at Perniti Ayog's water neutrality standard for Indian industry. Social responsibility is core to our mission. We already impacted over 1,700,000 lives, aiming for 2,500,000 by 02/1930. So we are on track. We have partnered with IIT and ISM Ghanbhag to upscale coal mine workers in green technologies.

Speaker 4

Our CDP A rating for supply engagement reflects our leadership in value chain sustainability. As we move forward, we remain dedicated to embedding resilience, responsibility and impact into everything we do. I will now turn it over to Kailash.

Speaker 3

Thank you, Vishali. Turning to the guidance for fiscal year ended 03/31/2026. We reiterate our guidance provided earlier. We expect to be at the higher end of the adjusted EBITDA range of 87 to 93,000,000,000 if the weather stays on track for the rest of the year and the asset sales rectify in line with our expectations. We also continue to expect to construct 1.6 to 2.4 gigawatt of projects during the year and generate cash flow to equity of rupees 14 to 17,000,000,000 rupees.

Speaker 3

During the year so far, while we saw positive impact versus last year in q one, as far as weather is concerned, we have subsequently seen a slight underperformance both on wind and solar, taking away most of our weather upside during the first quarter. We have increased the range of EBITDA contribution from our manufacturing business to INR 8,000,000 to 10,000,000, given the performance in the first quarter. With that, we'll be happy to take any questions.

Speaker 5

Thank If you wish to ask a question, please press star then 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then 2. If you are on a speakerphone, please pick up the handset And our first question will come from Justin Clear with ROTH Capital Partners. Please go ahead.

Speaker 6

Hi. Thanks for the time here. I first wanted to just start out on the manufacturing business here. So you had indicated in your prepared remarks that production volume went primarily to external sales in fiscal Q1. And it sounds like we could see a decline in the volumes in the coming quarters.

Speaker 6

So just wondering actually if you could share how many megawatts were delivered in fiscal Q1 and then if you could share how many megawatts you plan to deliver in the remaining quarters in fiscal twenty twenty six. I know you have about 800 megawatt backlog, but also wondering if you anticipate booking additional volumes with expected delivery in fiscal twenty six.

Speaker 3

So Justin. Yeah. So hi, Justin. Thanks for your question. So just to answer it, you know, in q one f I twenty six, you know, we sold almost close to 700 megawatt of modules to third party, and, you know, the balance was basically used for our internal consumption.

Speaker 3

Largely, you know, the profit and the margins come from our cell business, which is predominantly third party focused. And in that, we sold almost one forty two megawatt of direct sales of cells to third party. And

Speaker 2

so there

Speaker 3

was some upside which was related to that.

Speaker 6

Got it. Okay. And could you talk about expectations through the back half of the year? Do you think you could sell or book more for this year for delivery? Or have you essentially reached your capacity for the year?

Speaker 6

How should we think about that?

Speaker 3

So, you know, the reason for us revising our guidance on the EBITDA contribution from manufacturing business is that, you know, we continue to see contribution of third party sales, through the remaining part of the year also. Just, you know, how much to the extent, that'll happen, is something that, you know, we will get to know as we, you know, progress through the course of the year. But, you know, right now, we have reasonably visible visibility with the guidance that we've given.

Speaker 6

Got it. Got it. Okay. And then just one more. Just wondering if you could update us on the attractiveness of the bidding environment that you see currently.

Speaker 6

How is that evolving? Are there any particular areas that you see as being particularly attractive right now? And then just how active do you plan to be in fiscal 'twenty six you know, through the balance of the year, you know, when you're looking at new projects here?

Speaker 3

Yeah. So I would say that the bidding environment is is continuing on a steady basis. You know, the government has this target to get up to 500 gigawatt by 2030. So, you know, they are looking to auction out, you know, 50 to 70 gigawatt every year. In line with, you know, whatever projects are being auctioned, we do participate in them.

Speaker 3

I would say that our our win ratio has been a little bit lower, compared to, you know, say, '24 and, you know, parts of '25 because, you know, the competition has become a little bit, I would say, irrational to some extent. And, you know, we are seeing people really, you know, going with much lower return expectations. You know, we have a very disciplined approach when it comes to bidding as we have demonstrated over the last many years. And so, you know, unless, you know, we make our required rate of return, which is our hurdle rate, you know, we are happy to not win any capacity. But I would say that, you know, we have also very good pipeline that we are sitting on.

Speaker 3

So, you know, there is no urgency for us to really add capacity at lower returns.

Speaker 1

Got it.

Speaker 6

Okay. Appreciate it. Thanks.

Speaker 3

Thank you.

Speaker 5

And the next question will come from Nikhil Najeeva with Bernstein. Please go ahead.

Speaker 2

Thanks for taking my question and good to see the numbers and the strategy play out of focusing on manufacturing and battery over pump storage. My first question is on renewable execution. Again, the numbers have been good, but just wanted some if you could share some color on the key issues which others and possibly the sector is facing, whether it's grid availability, right of way issues, and transformer shortages. So how is that landscape shaping up?

Speaker 1

So So Yeah. Let me let me take that. Yeah. Sorry. The last one.

Speaker 3

Go ahead. Ahead. Go ahead, sir.

Speaker 1

Okay. Well, look, I think that capacity addition is by and large going at at reasonable pace, I would say. There are occasional shortages, not shortages as much as delays in some of the transmission infrastructure that sometimes lags generation capacity is getting put up. But it's a few months here and there. It's it's not something more substantial than that.

Speaker 1

And as for transformer shortages, you know, it's usually if you if you are relatively good about ordering in advance, which we tend to do, then, you know, that's something that you can work around. So I think it's it's not something that is holding back execution. I think what tends to hold back execution is the usual issues around land acquisition and so on more than anything else.

Speaker 2

Understood. And and I remember your earlier statement, I think a couple of calls back, specifically on when you said you'll be surprised to see India do more than five gigawatts over the year, given the challenges that come along, land or evacuation. Would you still hold the same views, or do you see that front improving as well?

Speaker 1

You know, even if we do more than five, it may be a little bit more. I don't see that number being exceeded this year, by by the way. Maybe in future years, if there are more people doing wind projects, maybe the number goes up by a little bit. But I don't don't see it getting to 10 gigawatts or or or a number of that of that nature. So maybe five will go to six or something.

Speaker 1

But last year, for example, we saw only about four gigawatts getting done. Maybe this year, it'd be five. Maybe in future years, it would be around the same is my sense.

Speaker 2

Got it, Sumant. My second question then is on the solar manufacturing business, which seems to be doing very well. I was surprised to see a point eight gigawatt top con so facility. I thought the entire 2.4 was monopurk. So if you could give some color on that and if there are plans to convert the entire facility to TopCon going forward.

Speaker 1

No. So, Nikhil, that 2.4 is actually monopurk. I I think if we gave the impression that it was 800 megawatts of top con, that is that is not the case. The whole current facility is top con is monopERC. But the new facility that we are setting up, the entire new four gigawatts, that is a top con facility.

Speaker 1

Now as far as modules are concerned, by the way, mod in modules in modules, by the way, they have a four gigawatt that entire Jaipur plant is converted to Topcon modules.

Speaker 2

Got it. Understood. Yeah. I think I read it wrong. Appreciate that.

Speaker 2

And any plans on ingot paper as some of your peers are doing? Or

Speaker 1

You know, I think we are, going to follow government lead in that matter. As you know, the government policy has been really the one that has been driving implementation of manufacturing capacities. And at this point, we'll have to wait and see whether they come up with the equivalent of ALM for wafers or not, or they start giving us that that that indication. So at this point, you know, those conversations haven't yet got to a point where we can be comfortable to to set up anything on the wafer side. But should that come into place, then, yes, for sure, we'll think about wafers as well.

Speaker 2

Got it. Understand that. And one last question I had was on the recent ammonia tenders which happened. If you could share some color, did Renu participate, or was a bit just too aggressive, for it to make sense for Renu?

Speaker 1

Yeah. No. You know, we did not participate for the reason that we felt that those contracts were not appropriately structured. First of all, they are only ten year PPAs or green ammonia purchase contracts. So we felt that was just too short.

Speaker 1

So what happens to your entire plant after ten years was not something that was clear. And the second thing is there are some structural other issues with those contracts, like there is no change in law pass through, for example, and so on. So therefore, we decided not to participate in that tender, actually. Because, again, as Kailash said earlier, we're not sitting in a situation where we need to participate in any new bids desperately. We can be very selective about the quality of the bids that we win and the returns that we win them at.

Speaker 1

So our view was that the green memorial tender was just not structured appropriately. That's why we did not participate. And secondly, if you see some of the tariffs that people have had, those also seem actually quite low, especially given all of this involved and the informatives of the contracting involved in that case.

Speaker 2

Great. I think I appreciate the color. Thank you so much. Those were my questions.

Speaker 5

Again, if you have a question, please press star, then 1. There are no further questions at this time. I would like to conclude the question and answer session as well as our conference call for today. Thank you for your participation, and you may now disconnect.

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