ReNew Energy Global Q3 2026 Earnings Report

ReNew Energy Global EPS Results

• Actual EPS: $0.00
• Consensus EPS: -$0.12
• Beat/Miss: Beat by +$0.12
• One Year Ago EPS: N/A

ReNew Energy Global Revenue Results

• Actual Revenue: $349.01 million
• Expected Revenue: $262.33 million
• Beat/Miss: Beat by +$86.69 million
• YoY Revenue Growth: N/A

ReNew Energy Global Announcement Details

• Quarter: Q3 2026
• Date: 2/16/2026
• Time: Before Market Opens
• Conference Call Date: Monday, February 16, 2026
• Conference Call Time: 8:30AM ET

ReNew Energy Global (NASDAQ:RNW) (NASDAQ: RNW) is a renewable energy company focused on developing, owning, and operating clean power projects in India. Its portfolio includes utility-scale wind, solar, and hydroelectric generation assets, as well as renewable energy projects serving commercial and industrial customers.

The company is also expanding into energy storage, green hydrogen, and other clean-energy solutions intended to support India’s transition to a lower-carbon electricity system. ReNew provides renewable power through long-term arrangements with utilities and corporate customers.

Founded in 2011 as ReNew Power by Sumant Sinha, the company is headquartered in Gurugram, India. ReNew Energy Global became a publicly traded company on the Nasdaq in 2021 through a business combination with a special purpose acquisition company. Sumant Sinha serves as the company’s founder, chairman, and chief executive officer.

ReNew Energy Global Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: ReNew increased operating capacity to 11.8 GW and its total portfolio to 19.2 GW (including ~1.5 GW of BESS), and has reconfigured the pipeline to favor solar + BESS—cutting committed wind from ~2.5 GW to ~850 MW—to lower CapEx, execution risk and make cash flows more predictable.
• Positive Sentiment: Financials improved materially: nine‑month Adjusted EBITDA rose 31% to INR 74.8 billion with PAT up over sixfold, management raised a $600 million bond at 6.5% (first Gift City bond), completed $275 million of asset recycling (600 MW sold), and raised full‑year Adjusted EBITDA guidance to INR 90 billion–INR 93 billion with project build guidance of 1.8–2.4 GW.
• Positive Sentiment: Manufacturing is a growing cash generator—contributing INR 10.8 billion to Adjusted EBITDA YTD, producing ~3 GW of modules and 1.4 GW of cells YTD, with a 900 MW external order book and a 4 GW cell plant under construction (first cells due next fiscal).
• Positive Sentiment: Leverage is trending down (headline debt/EBITDA from 8.2x to 7x; operating‑portfolio trailing 12‑month ~5.6x) and the company targets reducing consolidated leverage to below ~5.5x by 2028–2030 via further asset sales, capital recycling and cost optimization.
• Negative Sentiment: Transmission delays and curtailment remain a meaningful industry risk—roughly 400–500 MW of ReNew capacity was on TGNA and faces variable curtailment (management cited typical intraperiod curtailment around ~10–20%), and policy/compensation changes are still being negotiated by authorities.

Presentation

[Operator]

Thank you for standing by, and welcome to ReNew's Third Quarter FY26 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 one on your telephone keypad. I would now like to hand the conference over for opening remarks. Please go ahead.

[Anunay Shahi, SVP of Corporate Finance and Head of Investor Relations at ReNew Energy Global]

Thank you. Good morning, everyone, and thank you for joining us today. We have put out a press release announcing results for our fiscal 2026 third quarter, ended December 31, 2025. A copy of the press release and the earnings presentation are available on the investor relations section of our website at www.renew.com. With me today are Sumant Sinha, our Founder, Chairman, and CEO; Kailash Vaswani, our CFO; and Vaishali Nigam Sinha, our Co-founder and Chairperson, Sustainability. After the prepared remarks, which we expect will take about 30 minutes, 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.

[Anunay Shahi, SVP of Corporate Finance and Head of Investor Relations at ReNew Energy Global]

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 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. With that being said, it's now my pleasure to hand it over to Sumant.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

Yes. Hi, thank you, Anunay. Good morning, everybody, and good evening, depending on your time zones. I'm glad to have you all on our Earnings Call for the Third Quarter and The First Nine Months of Fiscal 2026. The year 2026 has kicked off with good news on the macro front. As you all would be knowing, a few days ago, India and the U.S. have agreed on a trade deal. Apart from reducing the general overhang and uncertainty, this is likely to also open up the U.S. market again for Indian exporters and benefit the economy overall. This has also benefited the rupee in recovering some value versus the dollar. Additionally, the financing environment remains benign, with interest rates on a downward curve.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

All this has enabled India's growth projections to stay above 7% in fiscal 2026, with roughly the same growth rate forecast by the government of India for fiscal 2027 as well. Coming to our sector, we have also seen some recovery in electricity demand as growth rebounded sharply in December 2026, with slightly better numbers in January 2026 as well. Power demand is expected to rebound to normal levels in fiscal 2027. In today's call, while I will cover the updates for the quarter, I will also briefly cover the strategic path forward for us as a company. Turning to our highlights. Since December of last year, our operating capacity has increased from 10.7 GW to 11.8 GW.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

Given that we have also sold 900 MW during this period, and adjusting for this, our portfolio actually increased by 19% or 2 GW over the last 12 months. We continue to focus on optimizing our portfolio for lower execution risk, CapEx, and more predictable cash flows. And hence, for our complex projects, we have decided to replace part of our wind projects with more battery energy storage systems, or BESS, and solar capacity. We have reduced, therefore, the wind capacity in our committed portfolio from 2.5 GW to approximately 850 MW, effectively taking up now to 19.2 GW, which is inclusive of approximately 1.5 GW of batteries.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

This pivot enables us to lower CapEx, reduce execution risk, as well as more accurately forecast our future cash flows, owing to less volatility in the weather patterns. Coming to our financial highlights. Our adjusted EBITDA increased by 31% to INR 74.8 billion for the nine months ending December 31, 2026, accompanied by an over sixfold increase in our profit after tax. We also successfully raised $600 million through a bond offering and successfully refinanced our previous bond, due in July 2026. The offering received demand in excess of $2 billion, and we were able to reduce the interest rate from the earlier 7.95% to 6.5%. Therefore, thereby saving approximately $9 million in annual interest expense. This was also the first bond issued through GIFT City.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

We also continued our capital recycling engine and sold another 300 MW of solar assets this quarter. Our manufacturing business contributed INR 10.8 billion to our adjusted EBITDA for the first nine months. As a result, we have increased the lower end of the guidance range for both our adjusted EBITDA and megawatts for the year. We now expect to deliver INR 90 billion-INR 93 billion of adjusted EBITDA, of which our manufacturing business should contribute between INR 11 billion-INR 13 billion. We have also narrowed the range for our project guidance and expect to construct between 1.8 GW and 2.4 GW in the fiscal year ending March 31, 2026. Lastly, and most importantly, ESG is at the core of everything we do. I am happy to report that we continue to outperform on our ESG commitments.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

We have received an A grade rating from LSEG and a score of 90.41 out of 100, effectively placing us in the top quartile globally. We have also received an A grade rating from CDP Climate Change and Water Assessments for effective water management at our plants. Not only this, but we have also been able to get water positive certification for two of our sites. Turning to pages eight and nine, I wanted to highlight that this year marks a significant milestone for us as we mark 15 years of our operations. We now have three mature businesses comprising a utility scale IPP business, a C&I business, as well as our manufacturing business. Turning to page 10, it is important to note the crucial strides ReNew has continued to take against the backdrop of a transaction.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

We have commissioned approximately 1.9 gigawatts, ramped up our manufacturing capacity, and also raised $100 million from BII, British International Investment, to finance the cell expansion of our manufacturing business. Our C&I business is among the market leaders in the segment, and our portfolio has expanded by approximately 30% over the past year through contracts with marquee customers. Leverage also continues to trend downwards meaningfully, and we are already at approximately 5.5x levels for our operating portfolio, which is debt to EBITDA. Moving to page 11, I wanted to spend some time highlighting our key strengths. While everyone knows the size and scale of our portfolio, both in utility scale and C&I, over the years, we have developed in-house O&M and EPC capabilities.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

We have also secured connectivity for our entire portfolio, including for our letter of awards, with 5 GW-6 GW of spare connectivity on hand. This is an important differentiator, as timely connectivity continues to be a key metric in the sector that we operate in. Moving to page 12. It is important to note that we have been consistently growing our EBITDA at approximately 17% per year since our listing. We have managed to do this without issuing any new equity and relying on capital recycling, which has been more attractive for us. On page 14, I would like to add some new elements that will be pivotal for both growth, predictability, and profitability. We have de-risked our project execution and improved predictability of future cash flows by increasing more BESS and solar in our portfolio and reducing the reliance on wind.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

This will enable faster execution and more predictable revenues, given that we already have a 25-year PPA backing these tariffs. Our capital needs will continue to be fueled by a mix of internal cash generation and capital recycling, enabling us to improve returns. Lastly, and most importantly, we will now have increased focus on balance sheet strength and discipline and will actively look to reduce leverage even further. While we are now delivering profitable results, a focus on leverage and cost optimization should further enhance our returns and cash flows. Turning to page 15. We have provided some run rate numbers based on the current configuration, gross and net of asset sales.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

We wanted to demonstrate that by selling about 1.6 GW over a period, we can effectively reach a portfolio of 19.2 GW without having to raise external capital, as well as reduce ex-headline leverage, including under construction projects, from the current 6.7x levels to under 5.5x. If we are able to do more asset recycling or farm downs, we plan to use that extra capital to get the leverage and corporate debt down even further. Moving to business updates on page 17. We continue to deliver on operating megawatts and now have an operating portfolio of 11.8 GW, an increase of 19%, adjusting for the 900 MW of assets during the last 12 months. Our overall portfolio is now 19.2 GW, inclusive of BESS.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

In the past nine months, we have commissioned over 600 MW of wind projects and over 900 MW of solar. Turning to page 18, our manufacturing business continues to perform above expectations and has delivered an adjusted EBITDA of INR 10.8 billion in the first nine months of the current fiscal year. The business has an external order book of 900 MW. Our under construction 4 GW cell facility is progressing well, and we should see it deliver its first cells later next fiscal year, actually. Our module facilities are producing over 12 MW per day and have produced 3 GW this year-to-date, but our cell facility is producing over 5.5 MW per day and has produced 1.4 GW this year-to-date.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

So far this year, we have sold 2.6+ GW of modules, of which approximately 1.5 GW have been sold externally, with the rest being used as part of our own operations. Turning to page 19. Our C&I segment has done exceedingly well and is one of the largest C&I portfolios in the country. We have developed a strong partnership with global tech giants like Amazon, Microsoft, and Google, as well as expanded our customer base across the country. Overall, 50% of our portfolio is with these tech giants. The business is also well-placed to tap into upcoming business opportunities, such as energy management services and supply of renewable energy to data centers. Now I will hand it over to Kailash to discuss the financial highlights. Kailash, over to you.

[Kailash Vaswani, CFO at ReNew Energy Global]

Thanks, Sumant. Turning to page 21, we continue to deliver consistent, profitable growth. Since the same time last year, we have constructed over 1.9 GW of projects, a 19% increase in operating capacity after adjusting for the 900 MW sold during the trailing 12 months. This year, so far, we have commissioned 1.6 GW of renewable capacity. Our revenue increased by 48% for the first nine months of this fiscal compared to last year, due to increase in megawatts and a meaningful contribution by the manufacturing business. Our adjusted EBITDA for the third quarter of this fiscal is also up, largely on account of gains from asset sales, scaling up of our manufacturing business, as well as an increase in the operating megawatts. Turning to page 22, our headline leverage continues to decline consistently.

[Kailash Vaswani, CFO at ReNew Energy Global]

We have reduced from 8.2x in December 2024 to 7x debt EBITDA at present, and at 6.7x, once you exclude the contribution from our JV partners, which are equity. On a trailing 12-month basis, the leverage for our operating portfolio was approximately 5.6x. Do note that our trailing 12-month EBITDA is not reflective of the run rate EBITDA for these assets, as many of these assets have less than one year of operations. We continue to pursue all options that will decrease our leverage ratio at the consolidated levels, such as asset recycling, cost optimization, and a reduction in our corporate debt. Turning to page 23, which covers details of our financing and asset recycling.

[Kailash Vaswani, CFO at ReNew Energy Global]

Recently, we issued a $600 million bond at a coupon of 6.5%, which replaces the earlier bond, which was at 7.95%. This is the first bond from India's GIFT City, making it a marquee transaction. This issuance received strong investor interest of, you know, greater than $2 billion and has also enabled us to save $9 million in interest costs annually, in addition to withholding tax savings. Additionally, we also concluded sale of a solar 300 MW asset, taking our total asset sales for the year to 600 MW, through which we have raised a total of $275 million through capital recycling this year, including the $100 million that we raised from BII from our manufacturing business. Let me now hand it over to Vaishali for comments on ESG.

[Vaishali Nigam Sinha, Co-founder and Chief Person & Sustainability Officer at ReNew Energy Global]

Thanks, Kailash. Turning to slide 25, let's look at the advancements in ReNew sustainability initiatives and targets. The global landscape for ESG in 2026 demands mandatory action and demonstrable progress, and we are proud to be leading the way in the renewable energy sector and beyond. Starting with our recent ESG ratings. For the LSEG ESG rating.

[Operator]

It appears we've lost connection with our speaker. One moment while we reconnect.

[Vaishali Nigam Sinha, Co-founder and Chief Person & Sustainability Officer at ReNew Energy Global]

Hello?

[Kailash Vaswani, CFO at ReNew Energy Global]

Yes, I can hear you, Vaishali.

[Vaishali Nigam Sinha, Co-founder and Chief Person & Sustainability Officer at ReNew Energy Global]

Yeah. So for the LSEG ESG rating, we received a remarkable score of 90.1 out of 100, and A grade, placing us in the top quartile globally. We are ranked second among 346 companies in our sector, reflecting a strong 7% year-on-year gain and clear industry leadership. We also excelled in the CDP Climate Change and Water assessments. We received an A rating in the Climate Change Assessment, featuring us in the prestigious Global Corporate A List and retained an A- rating in water security. Overall, we are ranked in the top 4% globally by CDP. Water stewardship is a core pillar of ReNew's environmental strategy, embedded across our operations. We successfully initiated a water positivity pilot, certifying two sites as water positive.

[Vaishali Nigam Sinha, Co-founder and Chief Person & Sustainability Officer at ReNew Energy Global]

Our solar site in Ashok Nagar, Madhya Pradesh, was certified as water positive, making it India's first water positive solar plant. These achievements underscore our commitment to setting new benchmarks for sustainability in the sector. Now turning to Slide 26, let's review our advancements across the core pillars of our ESG initiatives and targets. Under the environment pillar, we have achieved our target of being carbon neutral by completing the verification for the fifth consecutive year for fiscal year 2024, 2025. We continue to remain aligned to our annual SPT targets, achieving an 18.2% reduction in Scope 1 and 2 emissions from the baseline in fiscal year 2025. As the country advances towards sustainable economic and inclusive development, our CSR initiatives have also evolved to strengthen the priorities of new India.

[Vaishali Nigam Sinha, Co-founder and Chief Person & Sustainability Officer at ReNew Energy Global]

Our initiatives have positively impacted over 1.7 million lives so far. A major highlight is our Project Surya, which is skilling 1,000 solar power workers as solar technicians, with 720 women trained and over 200 already placed in the sector, significantly boosting gender equality and skilled employment. Under governance, we are making strong progress towards our target to rank amongst the top five global energy and utilities company by 2030, across leading ESG rating agencies. This is reflected in an S&P Global CSA score of 84, an LSEG score of 90.4, and top-tier CDP ratings of A for climate change and A- for water. These results reflect our continued commitment to responsible and sustainable practices. I will now turn it over to Kailash. Over to you, Kailash.

[Kailash Vaswani, CFO at ReNew Energy Global]

Thank you, Vaishali. Turning to guidance for the fiscal year ending March 31, 2026, we have increased the lower end of our EBITDA guidance range by 3%, and now expect that our adjusted EBITDA will be between INR 90 billion-INR 93 billion. We now expect to construct 1.8 GW-2.4 GW, up from 1.6 GW at the lower end of projects during the year, and generate cash flow to equity of INR 14 billion-INR 17 billion. We are also increasing the guidance for the adjusted EBITDA contribution from our manufacturing business to INR 11 billion-INR 13 billion. With that, we'll be happy to take questions.

[Operator]

Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Maheep Mandloi with Mizuho. Please go ahead.

[Maheep Mandloi, Director at Mizuho Securities USA]

Hey, thanks for taking the question here. Just one question on the, the revised strategy. Sumant you talked about having more solar and BESS-only projects going forward. Could you just talk more in detail about that? What, what drove that decision, so all the pros and cons there? And, on the solar side, you've been manufacturing the modules themselves. Are there any plans to also do something like that on the BESS side as well? Thanks.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

Yeah. Thank you, Maheep. Yeah, look, so the reason we are basically decreasing the amount of wind in the portfolio is because when we bid out some of these projects, at that time price levels were for BESS significantly higher than where they are right now, and also for solar. So in general, with prices of BESS coming down substantially, the ability to firm up power through solar plus BESS has actually improved. And therefore, to get to the right solutions that are desired by the customers, we require essentially less wind from a overall new configuration standpoint. So that is one reason that the amount of wind is decreased.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

The second thing also is that, as you know, we've had experience in wind, where PLF has been unfortunately lower than expected over the last 7 years, over the last 5 years. And, you know, we don't know exactly when that trend will reverse. It may reverse next year, it may take a little longer, but fundamentally, the variability in wind is a lot higher than it is in the case of solar. And, execution also in general, because a lot of the execution in solar is in Rajasthan, where it's easier to get land, and a lot of the execution of wind is in sort of Deccan, central India, which a lot of it is agricultural land, it's usually harder to get.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

And so therefore, to do a similar amount of capacity is easier in solar than it is in wind. And so for both of those reasons, actually all three reasons, which is related to change of price in BESS, change of the issue of wind variability and the issue of easier execution in solar, we have therefore, you know, tried to reduce the amount of wind in our portfolio going forward. And so in the close to about 7 GW of new capacity of IPPs that we have, we have reconfigured those projects as we are allowed to, under the terms of the bid of the various bids, and we are now therefore trying to go for a higher amount of solar plus BESS.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

There is, of course, still close to 1 GW of wind, but is down substantially from 2.5 GW that we had earlier. Those are the reasons. As far as manufacturing BESS is concerned, it's not something that we've actively looked at, seriously at this point. The reasons are actually twofold. One is, or I would even say threefold. One is that, there is no restriction at this point on imports of batteries from China or cells from China. And you know that you can import at a much cheaper level than you can manufacture domestically. And so that was one reason.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

The second reason was that on the technology front, technology moves a lot faster in the case of batteries, and so it just requires a lot more expertise to be able to get into the understanding of the right cell technologies and so on. A lot of the cell manufacturing in the country, or in any country for that matter, is really driven by the EV industry. So that's a market that we obviously would not be targeting for our BESS production. Or a lot of it would have to go into that segment, which is, you know, something that we don't understand as well. So that's why we haven't looked at cell manufacturing so far, or battery cell manufacturing so far.

[Maheep Mandloi, Director at Mizuho Securities USA]

Got it. I appreciate that clarity. And then maybe just on the update on the take private or the course of action here, like, in one of the slides, you talked about the path forward here. Is that the strategy moving forward, or should we expect more in terms of the path forward or more talks on privatization here? Thanks.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

So, Maheep, that's not something that we can really comment on, obviously, as you know, because that's a very specific topic. And that, you know, it should there be something that requires to be commented on, you know, that the company will make an appropriate disclosure at that time.

[Maheep Mandloi, Director at Mizuho Securities USA]

Okay. I'll go back and thank you. Thanks.

[Operator]

The next question comes from Nikhil Nigania with Bernstein. Please go ahead.

[Nikhil Nigania, Director at Bernstein]

Hi, thank you for taking my question, and good to see the focus on reducing leverage and increasing solar plus base instead of wind. My first question was on the industry issues, which are broader, which is transmission project delays and curtailment, both which are outside our control but are impacting the industry. Are we seeing any directional improvement on those two aspects, or they continue to be a hurdle for us?

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

Yeah, Nikhil, thanks for the question. So you know that, obviously, these are issues that have got now a lot of visibility because it's impacting the industry as a whole. And therefore, there has been a lot of discussion within the ministries, that is MNRE and MOP, on how to deal with this issue. And, there's a lot more focus on how to get transmission execution improved. And there are various things that the government is doing, which, you know, I can tell you about separately, perhaps, or you can also find out what's happening. And the same thing on curtailment.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

So essentially, you know, in the case of curtailment, a joint committee has sort of been established between the secretaries of MNRE and MOP to look at how to deal with this issue and, you know, how to essentially look at this loss, which obviously accrues to us, but which should actually get borne by a broader set of stakeholders. So that is something that is under discussion right now. I don't know exactly which direction or where it will finally end up at, or even how long it might take to get to the right conclusion.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

But certainly there is a recognition that this is a loss, that is a systemic loss, and there is no reason for only the developers at the sharp end of the stick to be taking on this loss in our books. So that philosophy is accepted. What is the right way of dealing with this is something that the government is thinking through. And on transmission as well, they're working on a lot of different things to see how they can improve the transmission build-out.

[Nikhil Nigania, Director at Bernstein]

Got it. Just to follow up on that, on the curtailment bit, is it fair to assume where we have a GNA, and not a TGNA, there we are compensated, by the DISCOM in case of curtailment?

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

Yes, that is the case. So, for example, in our situation, you know, of the total loss we've incurred on account of this combined issue, approximately about 30% or 35%, we're getting compensated back because we had GNA, a permanent GNA. So when you have a permanent GNA, you basically get, you get paid based on your schedule, rather than on the power that you supply. And in the case where you have a TGNA, of course, you have to take the loss on your chin, which is now what the government is trying to figure out, how to socialize that loss a little bit more across all stakeholders. But in the case of GNA, we get compensated.

[Nikhil Nigania, Director at Bernstein]

Got it. Appreciate that. One last question on the manufacturing bit, I mean, good source of cash for us. On the cell manufacturing side, on the cell, are we seeing any compression in margins or that continues to hold strong?

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

You know, so far it's held up. There was a temporary lull when, you know, post during the monsoons, when inventories tend to build up a little bit and execution slows down. But margins have again picked up a little bit, in the, in this current quarter. And it looks like the demand is reasonably okay at this point.

[Nikhil Nigania, Director at Bernstein]

Got it. Thank you. Those are my questions. Thanks a lot for answering.

[Operator]

As a reminder, if you would like to ask a question, please press star then one to join the question queue. The next question comes from Puneet Gulati. Please go ahead.

[Puneet Gulati, Research Analyst at HSBC]

Yeah, thank you so much. My first question is on the change in configuration with more towards solar. Would it be fair to say that even unadjusted for risk, the IRRs are better than what you could get out of wind?

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

I would say not at the time of bidding, but what has worked out historically in solar, because of CapEx reductions, has been that, people have ended up with higher IRRs in solar because CapEx has declined, sometimes more steeply than expected. We are seeing a bit of reversal in that right now, as you know, because people have bid very aggressive numbers in recent auctions, and the prices have actually gone up, you know, given what's happening in China and so on. So it's a little, time dependent, but in general, I would say that solar has tended to give higher returns than wind, on account of reduction in CapEx over a long-ish period of time.

[Puneet Gulati, Research Analyst at HSBC]

Right. So for your projects, if you were to execute it with wind versus solar, you will earn more out of it?

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

If you do it more with solar than with wind?

[Puneet Gulati, Research Analyst at HSBC]

Yeah.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

Obviously, look, what happens is that we look to optimize our returns on the configuration at all points in time, right? Now.

[Puneet Gulati, Research Analyst at HSBC]

Right.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

As I said, there are three reasons of shifting away from wind. One is just configuration optimization, because of the new capital costs that are now available in the market for BESS. So that is allowing us to get better returns than what we had assumed at the time we bid. Okay?

[Puneet Gulati, Research Analyst at HSBC]

Yeah.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

That is basically what's happening. But when you tend to execute wind, the risks are higher, not just on the capital cost side, but. And we've seen cost overruns happening in wind more frequently than we've seen happening in solar because of execution problems that I was mentioning. And secondly, also, once the asset is up and running, then also sometimes you see that wind performance does not show up as expected, and therefore your returns end up going down. So I would say that those are things that you can't necessarily or you don't really model for necessarily, but those end up happening in real life. Okay?

[Puneet Gulati, Research Analyst at HSBC]

Right.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

And now it doesn't happen in every case, but on balance, it can happen. And so therefore, in general, the view is that solar risk-adjusted returns are more steady than wind risk-adjusted returns are.

[Puneet Gulati, Research Analyst at HSBC]

Understood.

[Anunay Shahi, SVP of Corporate Finance and Head of Investor Relations at ReNew Energy Global]

Of your overall capacity,

[Puneet Gulati, Research Analyst at HSBC]

Yeah, sorry.

[Anunay Shahi, SVP of Corporate Finance and Head of Investor Relations at ReNew Energy Global]

No, I was just saying that if you see the presentation on page 15, and then we have the updated configuration on page 41. So basically what has happened is, with the fall in BESS prices and the new configuration, essentially our CapEx for the build-out is going down by around INR 60 billion.

[Puneet Gulati, Research Analyst at HSBC]

Okay.

[Anunay Shahi, SVP of Corporate Finance and Head of Investor Relations at ReNew Energy Global]

Whereas, on the other hand, the EBITDA is only declining by around, you know, 65-68, $6.5 billion-$6.8 billion. So effectively, our EBITDA for the under construction portfolio is improving a bit, apart from obviously having greater control of execution and more predictable cash flows. So even from a return perspective, because of the way BESS prices have trended and solar prices have trended, it's more, it's better for our returns.

[Puneet Gulati, Research Analyst at HSBC]

Understood. And, secondly, in your overall, production or capacity, how much would be under TGNA, and what sort of curtailment would you have faced in the current quarter?

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

In the current quarter? See, the TGNA, it’s not a fixed number. Just, if you just ask for the last quarter, you know, actually some of our projects actually moved from GNA, from TGNA to GNA. So I can't give an exact number, but it's probably in the few hundreds of megawatts now. I think it was maybe close to 1 GW earlier. Now it's perhaps down to 400 MW-500 MW, because 500 MW or thereabouts moved from TGNA to GNA. But, you know, as we build new projects, it depends on the substation that you're connecting into. If that substation has not been properly connected at the back end to various other transmission lines to the rest of the national grid, then any project that connects to the substation faces or gets TGNA. And then whenever those back-end transmission lines get built out, then that TGNA converts to GNA.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

So it could be that a project is on TGNA for a quarter or two quarters, you know, and it's some part of the new projects that you're building out. So there is. So that is the way it's sort of working. There could be 500 MG-700 MW that are at any given point in time on TGNA.

[Puneet Gulati, Research Analyst at HSBC]

Okay. And on this TGNA capacity for last quarter, how much would we have faced curtailment?

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

Anunay, do you have those numbers?

[Anunay Shahi, SVP of Corporate Finance and Head of Investor Relations at ReNew Energy Global]

Yeah, yeah, yeah. So, Puneet, you know, when we started the last quarter, there was roughly, as Suman said, close to 1 GW of capacity on TGNA, out of which about 600 odd MW moved to permanent GNA. So currently, we're, we are maybe at somewhere 400 MW or a bit little below that, which is, which is on TGNA.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

By the way, when something's on TGNA, it doesn't mean that it's getting fully curtailed. It just means that there is some degree of curtailment. Which could be 10%, 20%, something, something in that range.

[Puneet Gulati, Research Analyst at HSBC]

Yes.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

And that also depends on.

[Puneet Gulati, Research Analyst at HSBC]

Get a sense of.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

Yeah. Yeah, yeah, and that also depends, you know, on the day, or, and, and the demand and all of those things.

[Puneet Gulati, Research Analyst at HSBC]

Got it. Got it. And lastly, you know, you talked about your, you know, target leverage ratio at 5.5x for fully constructed portfolios. You're already at 5.6x for your operational portfolio. How much more do you want to bring your leverage down to? Is there really a need to bring down leverage? Once your portfolio is constructed, you should automatically be there, or there is a general need to bring down a large leverage?

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

Kailash, would you care?

[Kailash Vaswani, CFO at ReNew Energy Global]

Yeah, I can.

[Sumant Sinha, Founder, Chairman, and CEO at ReNew Energy Global]

One thing I'll clarify. You know, one, just one thing I'll clarify, Puneet, sorry, with Kailash, before you answer, is, Puneet, what when we say 5.5x, is the headline leverage, so whereas right now it's closer to 6.5x, 6.6.x The intention would be to bring it down to that levels over time. But yeah, Kailash, please.

[Kailash Vaswani, CFO at ReNew Energy Global]

Yeah, I think, Puneet, you know, see, that's one clarification. And the other thing is that, you know, overall, you know, feedback that we have received, and, you know, we also believe strongly in that, is that, you know, we need to have more, accruals, you know, coming to shareholders, than to debt providers. And in that context, obviously, you know, bringing down leverage is the easiest way to do that. Because, you know, I think cost reduction, you know, we have managed to achieve as much, as we can, but I think it's just the headline debt number, which, takes out, the free cash flows to the firm. That's so the reason why we would like to bring it down.

[Puneet Gulati, Research Analyst at HSBC]

Understood. 6.7x going down to 5.5x is what one should think about. Any target date in mind or year in mind?

[Kailash Vaswani, CFO at ReNew Energy Global]

No. So I would say that, you know, basis, you know, whatever number crunching that we've done, I think by between 2028-2030 time, then we'll be able to achieve this.

[Puneet Gulati, Research Analyst at HSBC]

Okay. Great. That's all from my side. Thank you so much, and all the best.

[Kailash Vaswani, CFO at ReNew Energy Global]

Thanks.

[Operator]

That does conclude our Q&A session and our conference for today. Thank you for participating, and you may now disconnect.

Participants

Executives

• Anunay Shahi, SVP of Corporate Finance and Head of Investor Relations
• Sumant Sinha, Founder, Chairman, and CEO
• Kailash Vaswani, CFO
• Vaishali Nigam Sinha, Co-founder and Chief Person & Sustainability Officer

Analysts

• Maheep Mandloi, Director at Mizuho Securities USA
• Nikhil Nigania, Director at Bernstein
• Puneet Gulati, Research Analyst at HSBC