ReNew Energy Glb Q2 2027 Earnings Call Transcript
ReNew Energy Glb (NASDAQ:RNW) reported second-quarter financial results on Tuesday. The transcript from the company’s second-quarter earnings call has been provided below.
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Summary
ReNew Energy Glb reported a strong first half of fiscal year 2027, with significant growth in EBITDA and profit after tax and the lowest ever receivable base.
The company’s operating portfolio expanded to 13.8 gigawatts, a 23% increase year-on-year, despite the sale of 400 megawatts of assets.
Adjusted EBITDA for Q2 fiscal 2027 was INR 33.6 billion, up 28% year-on-year, and profit after tax was INR 6.4 billion, up 37.3%.
The company raised its fiscal 2027 adjusted EBITDA guidance to INR 105 to 109 billion, reflecting strong performance, particularly from its manufacturing business.
ReNew Energy Glb is progressing with its take-private process in collaboration with a consortium including CPP Investments and the CEO, with regulatory approvals expected by early 2027.
The company made significant progress in project execution, with 1.3 gigawatts commissioned in fiscal 2027 and a committed portfolio of 20.5 gigawatts, including 1.7 gigawatts of BESS.
The company continues capital recycling initiatives, with expected asset sales generating approximately US$300 million.
ReNew Energy Glb improved its credit profile, with outlook upgrades from Moody’s and CARE and a decrease in its net debt to EBITDA ratio.
The manufacturing business remains profitable, with increased EBITDA guidance and ongoing expansions in cell and wafer facilities.
ReNew Energy Glb delivered strong ESG performance and was recognized among TIME’s Most Sustainable Companies in 2026.
Full Transcript
OPERATOR
Thank you for standing by and welcome to ReNew Energy Glb’s 2Q FY27 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 to Anunay Shahi. Please go ahead.
Anunay Shahi
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 2027 for the period ended September 30, 2026. A copy of the press release and the earnings presentation are available in the Investor Relations section of ReNew Energy Glb’s website at www.renew.com. With me today are Sumant Sinha, our Founder, Chairman and CEO; Kailash Vaswani, CFO; and Vaishali Nigam Sinha, Co-Founder and Chairperson, Sustainability.
After the prepared remarks, we will open the call up 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 on our website 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’s now my pleasure to hand it over to our Founder, Chairman and CEO, Sumant Sinha. Sumant, over to you.
Sumant Sinha (Founder, Chairman and CEO)
Thank you, Anunay. Good morning, good afternoon and good evening everybody and glad to have you all on our earnings call for the second quarter and the first half of fiscal year 2027. The first half of this fiscal has been one 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 base, 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 six, 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 2027, including 628 megawatts in the second quarter and about 2.7 gigawatts over the trailing 12 months. We 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 GW including 1.7 GW of BESS and our total pipeline is approximately 27 GW 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 five years ago. Coming to our financial performance, we continue to deliver profitable growth consistently on a year-on-year basis. In Q2 of fiscal 2027 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 2027, adjusted EBITDA was approximately INR 64 billion, up almost 20% year on year, and profit after tax is 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 2027. We have also benefited from stronger wind PLFs in Q2 of fiscal 2027 compared to last year. However, on the solar side we have continued to see some impact of grid-related curtailment. Our IPP 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 Ba2 with a positive outlook from Ba2 with a negative outlook and CARE has similarly revised our rating outlook from A to A positive. 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 ALMM 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 which is expected to generate around US$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 US$84 million.
Together these transactions are expected to bring in approximately US$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 2027 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.
Kailash Vaswani (Chief Financial Officer)
Thank you, Sumant. Turning to page seven, an update on the take-private process. As you will recall, on August 11, 2026, ReNew Energy Glb signed a transaction agreement with the consortium comprising of CPP Investments and Sumant. The acquisition will be effected 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’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. An affiliate of ADIA, who approximately holds 51.1% of the voting power of the shares subject to the Scheme, has 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 through a rollover arrangement. On October 28, 2026, ReNew Energy Glb and the consortium signed a side letter. It amends the leaver provisions for certain replacement awards under the new incentive plan. Otherwise the transaction agreement is unchanged.
We continue to work towards the required regulatory approvals. The Schedule 13E-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 2027. Turning to industry backdrop, slide 13, renewables continue to lead capacity addition in India. They made up for more than 85% of all power capacity added in the first half of fiscal 27. In line with recent trends, about 25 gigawatts of renewable energy capacity was added in the first half, including 21 gigawatts of solar, 3 gigawatts of wind and 0.7 gigawatts of hydro. As of September 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 2027 helped by El Niño and a favorable base year. Demand has been higher than last year in every month so far. Demand for the first half of fiscal 27 was up almost 10% year on year. Demand in October 26 compared to October 25 was up by 21%. Peak demand has already reached around 271 gigawatts in fiscal 27 which is a new high. Supply is struggling to keep up, especially outside solar hours.
On September 9, 2026, the peak demand deficit reached around 8 gigawatts 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 RTC FDRE projects put us in a strong position to meet this need. Turning to project execution on slide 14, our delivery remains de-risked and on track for our annual guidance. Our operating portfolio stands at 13.8 gigawatts including 100 megawatts, or 250 megawatt-hours, of BESS, up 19% year on year net of the 400 megawatts sold and up 23% adjusting for asset sales. In fiscal 2027 to date we have commissioned 1.3 gigawatts comprising of 1.2 gigawatts of solar and 132 megawatts of wind capacity. Looking ahead for solar, around 200 megawatts has been erected and is in advanced stages of commissioning.
The majority of modules for the rest of fiscal 27 execution are already at site and the balance is secured through in-house production. 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 megawatts has been erected 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 central or high-quality CNI offtakers. Turning to our CNI business on slide 15, we continue to have one of the largest CNI portfolios in India at 2.9 gigawatts across five states, of which 2.6 gigawatts is commissioned including 338 megawatts 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 offtake in our CNI business.
With around 10.7 gigawatts of data center capacity expected in India by fiscal 2031 representing a $20 billion market opportunity and 75 terawatt-hours of power demand, we believe we are well placed to participate in supplying energy 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 INR 12 billion and adjusted EBITDA from external sales was INR 4.1 billion rupees compared to INR 3.3 billion in Q2 of fiscal 26, at a margin of about 33%. For the first half, adjusted EBITDA from external sales was INR 9.7 billion rupees compared to INR 8.6 billion rupees.
In Q2 fiscal 27 we produced 528 megawatts 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 gigawatts. As a result of our continued strong performance, we’ve updated the annual EBITDA guidance from our manufacturing business to INR 12 to 14 billion from INR 10 to 12 billion 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 the 4 gigawatt cell plant, civil works and PEB works are completed, the ETP 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 27. 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 September 30, 2026, our total portfolio was approximately 20.5 gigawatts including 1.7 gigawatts of BESS. Operating capacity stood at 13.8 gigawatts comprising 5.7 gigawatts of wind, 7.9 gigawatts of solar, 99 megawatts of hydro and 100 megawatts, or 250 megawatt-hours, of BESS. We also had 6.6 gigawatts of committed capacity including 1 gigawatt of wind, 4 gigawatts of solar and 1.6 gigawatts of BESS.
Since April 25 we have commissioned about 2.7 gigawatts of commitments comprising mainly of around 2.2 gigawatts of solar, 439 megawatts of wind and 25 megawatts of BESS. On consolidated performance for Q2 of fiscal 27, revenue was up 28% on the year, adjusted EBITDA was up 28% and PAT was up 37%. For Q2 fiscal 27, income was INR 49.6 billion, revenue was INR 46.5 billion, adjusted EBITDA was INR 33.6 billion or $350 million and PAT was INR 9.9 billion compared to INR 5.6 billion of PAT in 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 margins for Q2 of fiscal 27 were 82.9% for IPP excluding CE, 33.3% for manufacturing and 69.3% on a consolidated basis.
We remain disciplined in capital allocation and our net debt to trailing twelve months of adjusted EBITDA for operating projects has come down to almost 5.3x from 5.7x at the end of last quarter. Of our net debt of INR 711.3 billion, INR 26.7 billion represents contributions from our JV partners and approximately INR 104.7 billion relates to under-construction projects with debt partially drawn down for about 1.5 gigawatts of renewable energy including BESS.
Excluding these projects which don’t contribute to EBITDA, net debt for operational projects stands at INR 579.9 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 agreements 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 IPP DSO was 63 days as of 2026, an improvement of 21 days year on year and 31 days over two years, and our lowest ever, helped by the INR 5.7 billion we received from Andhra Pradesh in July 2026. Manufacturing DSO was nine days. As central government counterparties become a larger part of our portfolio, more than 75% of our 20.5 GW 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 INR 95.1 billion as of September 30, 2026. I will now hand over the call to Vaishali for the ESG and sustainability update.
Vaishali Nigam Sinha (Co-Founder and Chairperson, Sustainability)
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 through enhanced nature-based disclosures and deeper supply chain engagement. On nature, ReNew Energy Glb 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 third consecutive year, with zero suppliers classified as high risk. We also extended our engagement to Tier 2 suppliers through a 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’s 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 manufacturing business’s electricity consumption. We have also published a transition plan aligned with ReNew’s SBTi-validated net zero 2040 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 with 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 meetings.
I will now turn it over to Kailash to take us through some guidance.
Kailash Vaswani (Chief Financial Officer)
Thank you, Vaishali. Turning to guidance on page 24, backed by the strong performance in the first half, including from our manufacturing business, we are raising the lower end of our fiscal 27 consolidated adjusted EBITDA guidance from INR 103 billion to INR 105 billion, taking the range to INR 105 to 109 billion. This now includes INR 12 billion to 14 billion from manufacturing, up from INR 10 to 12 billion earlier, and INR 1 billion to 2 billion from asset sales gains.
We continue to expect to construct between 1.6 to 2.4 gigawatts during fiscal 27 and to generate cash flow to equity of INR 18 to 22 billion. For the total committed RE portfolio of 20.5 gigawatts including 1.7 gigawatts of BESS, we continue to expect run-rate adjusted EBITDA of INR 134 to 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 GW of projects for which we have signed definitive agreements to sell.
With that, we will 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 your handset to ask a question. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced.
Sumant Sinha (Founder, Chairman and CEO)
Operator, I think if we don’t have any questions on the phone, we have one question through the webcast link.
OPERATOR
Certainly, sir.
Sumant Sinha (Founder, Chairman and CEO)
Should I go ahead?
OPERATOR
Yes, you can go ahead.
Sumant Sinha (Founder, Chairman and CEO)
Yeah, so the question is, and I’ll read it out: 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, there has been some impact on our solar projects. This quarter the impact was close to around $9 to $10 million on account of T-GNA 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 some of you may have read, there are also a few things under discussion with the Government of India if they can provide some relief for it.
But that’s the quantum of impact this year. With respect to monsoon, while the monsoon has been weaker, having said that, our wind PLFs this year have been significantly better than what they were last year.
Kailash Vaswani (Chief Financial Officer)
Yeah, and of 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 on $1.25 billion, so that we’ve 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.
Sumant Sinha (Founder, Chairman and CEO)
I think there’s one more question from Maheep Manloi 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, as we have also highlighted in our presentation, we currently have operating module and cell capacity. While the margins on the module side of things have reduced significantly, 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, so far at least we are seeing strong margins, and that’s what’s 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.
OPERATOR
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.
Disclaimer: This transcript is provided 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. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.