Prepared remarks
Thank you for your patience, and welcome to the ReNew Second Quarter Fiscal Year '26 Earnings Report. I will now pass the conference to Anunay Shahi, Head of IR. Please proceed.
Thank you and good morning, everyone. We appreciate you joining us today. We have released our results for the second quarter of fiscal 2026 and the half-year period ending September 30, 2025. You can find a copy of the press release and the earnings presentation in the Investor Relations section of ReNew's website at www.renew.com. Joining me today are Sumant Sinha, our Founder, Chairman and CEO; Kailash Vaswani, the CFO; and Vaishali Nigam Sinha, Co-Founder and Chairperson of Sustainability. After the prepared remarks, which we anticipate will take about half an hour, we will open the call for questions. As is customary, please keep in mind that our safe harbor statements are included in our press release, presentation materials, and other resources available on our website. These statements are crucial to our discussions. There are risks and uncertainties that could lead to our actual results significantly differing from those indicated in our forward-looking statements, so we encourage you to review the press release we provided in our Form 6-K along with the presentation on our website for a more detailed explanation. Additionally, our press release, presentation materials, and annual report contain non-IFRS measures reconciled to the nearest IFRS measures, which are also accessible on our website. With that, I would like to turn it over to our CEO, Sumant Sinha.
Yes. Hi. Thank you, Anunay. Good morning, good evening to everybody. I'm glad to have you all on our earnings call for the second quarter and for the first half of fiscal 2026. While we continue to see global macroeconomic and trade-related volatility, the situation in India remains relatively benign. S&P has upgraded India's long-term credit rating, and the inflation remains low, providing scope for further rate cuts by the Reserve Bank of India. There is also expectation of an Indo-U.S. trade deal being concluded and announced in the near future. Coming to the energy sector, we also have seen an unusual trend in climatic emissions this year in India. There has been an extended selloff of the monsoons, resulting in more muted power demand growth as well as lower solar PLFs compared to last year. On the policy front, in a welcome move, the government of India took a significant step and reduced the goods and services tax on most items in the renewable energy sector from 12% to 5%.
This should further increase the affordability of clean energy, which was anyway the cheapest source of electricity in India. As a company, we continue to deliver profitable growth, deliver on project execution as well as demonstrate capital discipline in delivering returns significantly above our cost of capital. Turning to our highlights for the quarter. Since October of last year, we have commissioned over 2.1 gigawatts of renewable energy capacity, marking a 22% growth in our portfolio after adjusting for the asset sales over the period. We continue to expand our committed portfolio and have signed PPAs for 3.8 gigawatts of installed renewable energy capacity over the past 4 quarters for projects that should provide returns towards the higher end of our targeted IRR range, if not better. We, therefore, reiterate our FY '26 megawatt guidance and are on track to complete construction of 1.6 to 2.4 gigawatts of capacity in fiscal 2026.
Turning to our financial highlights. We continue to demonstrate strong financial performance, delivering adjusted EBITDA of INR 53.5 billion, which is a 24% growth year-on-year for the first half of the fiscal year ended March 31, 2026. We have also meaningfully improved our leverage metrics for operational projects, and we reaffirm our fiscal year 2026 adjusted EBITDA guidance of INR 87 billion to INR 93 billion. 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 over 2 gigawatts of modules and over 900 megawatts of cells in H1 FY '26. Manufacturing also made a meaningful contribution of INR 3.3 billion towards adjusted EBITDA for the quarter, which adds up to INR 8.6 billion for the first 6 months of fiscal year 2026. As a result, we are revising our FY '26 adjusted EBITDA guidance for manufacturing upwards to INR 10 billion to INR 12 billion.
We are also steadfast in our ESG commitments as showcased by the rating of 83 out of 100 in the S&P Global Corporate Sustainability Assessment, which we received recently. This is the highest ever by any Indian IPP. We were also recognized in the Fortune Global Change the World list 2025 for the third time. We have also published our inaugural climate risk and biodiversity risk reports aligned with the TCFD and TNFD frameworks, indicating our continued push towards transparency and governance. Turning to Page 9. Execution is our topmost priority and a key differentiator for us. We have commissioned over 2.1 gigawatts of capacity over the last 12 months or so, and reiterate our guidance to complete the construction of 1.6 to 2.4 gigawatts for fiscal year 2026. Year-to-date, we have commissioned more than 1.2 gigawatts, which are split into approximately 750 megawatts of solar capacity and nearly 500 megawatts of wind.
In addition, we have over 500 megawatts of solar capacity that has already been erected and will enable us to meet our construction targets. While there has been some lull in the bidding environment, we believe that this is cyclical as most IPP players have already been able to build pipelines that will be executed in the next 4 or 5 years. Turning to Page 10. Our solar manufacturing facilities are now operating at full tilt. We are currently producing over 12 megawatts of modules and 5 megawatts of cells on a daily basis. In the first half of this year, we produced close to 2 gigawatts of modules, operating at high utilization and efficiency levels. We currently have third-party orders to sell approximately 650 megawatts this fiscal with close to 1.5 gigawatts already delivered this year. In September 2025, we also closed a $100 million investment from British International Investments, which will primarily be used for expansion of the cell facility.
We are pleased to say that the construction of our new 4-gigawatt TOPCon cell facility is on track with the land acquisition, engineering and machinery orders completed and the civil works well underway. Our manufacturing business has started contributing meaningfully to the consolidated P&L by delivering an adjusted EBITDA of INR 3.3 billion this quarter at a margin of over 30%. The EBITDA contribution in this quarter has moderated as compared to the previous quarter due to a higher percentage of captive sales. In addition, the margins are slightly higher due to some cost savings and procurements ahead of time, which may normalize as this year progresses. Now let me hand it over to Kailash to talk more about the financial highlights.
Thank you, Sumant. Turning to Page 12. We continue to deliver consistent profitable growth. Since the same time last year, we have constructed over 2.1 gigawatts of projects, representing a 22% increase in operating capacity after adjusting for the 600 megawatts sold during the trailing 12 months. This year, so far, we have commissioned over 1.2 gigawatts of renewable energy capacity. Our revenue increased by over 50% for H1 of this fiscal compared to last year due to increases in megawatts and a meaningful contribution from third-party sales in our manufacturing business. Turning to Page 12 and the EBITDA walk. We saw subdued PLFs this quarter due to lower irradiation from an extended selloff of monsoons, resulting in a net negative impact of INR 1.7 billion for the quarter compared to last year. The new projects that we commissioned over the last 12 months contributed INR 2.5 billion to our adjusted EBITDA, while the manufacturing business provided INR 3.3 billion.
Over the past year, we have sold 600 megawatts of solar assets as well as a transmission project, contribution from which was also absent in the adjusted EBITDA for this quarter. Turning to leverage. The headline leverage continues to decline significantly and consistently, having reduced from 8.6 in September '24 to 7 in September '25. Leverage at the operating asset level also continues to be below the 6x threshold that we have set. On a trailing 12-month basis, the leverage was around 5.5x, excluding our under-construction portfolio and the contribution from our JV partners. 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 1 year of operation. We continue to focus all options that will improve our leverage ratio at the consolidated levels such as asset recycling, cost optimization, and reduction in corporate debt.
During the quarter, there was also favorable macro news with S&P upgrading India's long-term ratings to BBB from BBB-, which was the first upgrade in almost 18 years. There was also a reduction in GST rates by the Government of India. There are also further expectations of rate cuts by RBI, which should also get transmitted to our future borrowing costs. Let me now hand it over to Vaishali for comments on ESG.
Thanks, Kailash. Turning to Page 15. Let's look at the advancement in ReNew's sustainability initiatives and targets. The global landscape is shifting quickly towards mandatory regulations as climate impacts intensify. In India, recent reports highlight extremely challenging situations, while events such as the August 2025 floods in Uttarakhand and Punjab, along with severe AQI levels in Delhi, underscore the urgent need for action and resilience. At ReNew, we remain steadfast in our mission to lead with purpose and resilience. Our continued commitment to purpose-driven sustainability continues to deliver results, reflected most recently in our standout performance in the prestigious S&P Global CSA assessment, which is one of the key highlights of this quarter. We achieved a score of 83, our highest ever, marking a 14% year-on-year improvement and more than doubling our score since our fiscal year '22 debut.
This makes ReNew the highest rated India-based energy company and places us amongst the top 10% of energy companies globally. This milestone reflects the depth and breadth of our overall climate strategy, human rights, and our continued commitment to transparency and ethical governance. In terms of awards and recognitions, as was mentioned earlier, Fortune Change the World list 2025 in that ReNew has been recognized in this prestigious list for the third time. This marks our second consecutive recognition for a community water-related initiative in Rajasthan. Forbes Sustainability Leaders, ReNew's Chairman and CEO, Sumant Sinha, was named amongst the top 50 climate leaders globally, reinforcing ReNew's leadership in the sustainability movement. On the reporting front, we published our inaugural climate risk report aligned with IFRS S2 and TCFD, outlining key climate-related risks and opportunities.
We also released our first nature risk report aligned with TNFD, identifying nature-related risks and opportunities critical to our long-term resilience. Now turning to Page 16 to see the progress made across our ESG targets. We remain fully committed to our sustainability roadmap and have made meaningful progress across overall sustainability goals. We have achieved an 18.2% reduction in our Scope 1 and 2 emissions from the baseline. And as part of a pilot study, 2 of our sites have become water positive. Social responsibility remains at the heart of our work. We strongly believe that a just energy transition must empower those at the grassroots, and we continue to upskill and train women and coal mine workers in green technologies. Diversity forms a core aspect of our overall sustainability strategy, and our full-time employee diversity now stands at approximately 16.2%. Our S&P Global CSA score of 83 continues to reflect our leadership in sustainability.
We are currently awaiting results from other ESG ratings and will disclose progress across all ratings in our upcoming meetings. As we move forward, we remain committed to delivering sustainable growth and driving positive change across the world. I will now turn it back to Kailash.
Thank you, Vaishali. Turning to guidance for the fiscal year ended March 31, 2026. We reiterate our guidance provided earlier. We expect to be at the higher end of the adjusted EBITDA guidance range of INR 87 billion to INR 93 billion, subject to weather staying on track for the remainder of the year. We also expect to construct 1.6 to 2.4 gigawatts of our projects during the year and generate cash flow to equity of INR 14 billion to INR 17 billion. During the first half of this fiscal, while we saw marginally better wind PLF compared to last year on account of the extended monsoon, we saw significantly lower PLFs in solar, resulting in overall lower PLF year-on-year. Our overall consolidated adjusted EBITDA has also benefited from the performance of our manufacturing business, wherein we have increased the range of EBITDA contribution by INR 2 billion, revising the guidance to INR 10 billion to INR 12 billion for the remaining part of the year. With that, we will be happy to take questions.
Questions and answers
Your first question comes from Justin Clare with ROTH Capital Partners.
I wanted to start here just on the progress that you continue to make on the contracting side. So I think 3.8 gigawatts of PPAs signed over the last 12 months. Could you just comment on the contracting environment, your expectations for additional PPA signings over the next few quarters? And then do you have any sense for when you might contract the entire 25-gigawatt pipeline that you currently have secured.
Sumant, would you like to take that?
Yes. Okay. Justin. Yes. Look, we've made some good progress on our PPA signings over the last 12 months. And we have approximately, as you know, about 6 gigawatts of LOAs that we would hope a substantial chunk of that would convert into PPAs. It's hard to give you specific visibility on it because PPAs get signed when they do based on feedback from the DISCOMs. Our expectation would be that over the next 6 months or so, a reasonable chunk, and it's very hard for me to hazard exactly how much of this 6 would get signed. And it's very hard to give a specific indication as to when all of it might get converted. I think we just have to be patient, and we have to continue to work with the DISCOMs. A lot of that capacity is the more structured products, and that does take time for DISCOMs to essentially convert on because they need to do a lot of diligence and work. The other thing also is that a lot of the capacity is for execution out to 2029, 2030 and so on. And there, we have to work very closely with the DISCOMs to see what the requirements are, see if we can prepone some of that capacity or not. So there is a lot of conversation and dialogue going on with the DISCOMs through the REIAs, the bidding agencies to convert this capacity. But it's hard to give you a very specific timeline as to when all of that will be converted at this point.
Okay. Got it. That's helpful. And then I guess just thinking through your pipeline here. I was wondering if you could just update us on the transmission status for the projects in your pipeline, especially as you go out into 2029, 2030. And maybe help us understand the remaining risks in securing the transmission necessary for your assets?
We have most of the transmission set up because once you win a bid and receive the letter of award, you can block connectivity. We have successfully blocked connectivity for the entire 25 gigawatts, and we can also block connectivity depending on land acquisition, which isn't tied to a specific project. We've managed to block a significant amount of connectivity in this way as well. Currently, some of the DISCOMs are expressing concerns that if the projects are scheduled for construction with transmission ready by 2029 or 2030, that timeline may be too distant for them. They are asking for quicker project timelines. We are exploring the possibility of utilizing our existing transmission connectivity, which is further out, and replacing some of it with land-based connectivity that may be available sooner. We are assessing which of those Power Purchase Agreements we can advance using this land-based connectivity. This approach provides us with considerable flexibility to convert some of the Letters of Award into Power Purchase Agreements earlier. However, land-based connectivity is currently a limited resource and highly valuable, so we need to manage it carefully.
Thank you. I have another question about the solar manufacturing segment. The EBITDA margin appears to have decreased to 33% in fiscal Q2 from 40% in Q1. In your prepared remarks, you indicated that this might be due to a higher proportion of captive sales, but I would like to gain more insight into the reasons behind the decline. Additionally, could you share your expectations for how EBITDA margins might trend in the second half of the year? That information would be helpful.
Yes. So...
Kailash, do you want to take that?
Yes. Yes. So see, Justin, the captive sales don't really have an impact on the reported EBITDA margins because when we report our numbers, we only report for third-party manufacturing sales. Obviously, quarter 1 was exceptional. We had better realizations. And to that extent, the margins were high. But obviously, quarter 2 is a relatively leaner month when it comes to sales. So to the extent we were producing, we were also selling at the same time. So that's why there was some impact in terms of realizations, which caused the margins to be lower. Secondly, also in quarter 1, we had done some strategic procurement earlier before the prices went higher for wafers and all, and some of the other key equipment to make cells and modules. So I think that we saw it play out in quarter 1. Quarter 2 was obviously with the revised pricing that we got on our procurement side.
The next question comes from Nikhil Nigania with Bernstein.
My first question, just continuing on the discussion on the solar manufacturing bit. Would be great if you could share some timelines on the expected commissioning for the cell expansion? And also, if there are any plans to enter ingot wafer given the guidance the government has given?
Nikhil, regarding cell expansion, we are currently making significant progress in acquiring land and ordering essential equipment. We anticipate starting pre-commissioning by the same time next year, with full commissioning likely by the end of fiscal '27. As for wafer plans, the notification is fairly recent, and we will assess the potential benefits of that expansion before deciding whether to move into wafer ingots.
Understood. The second question I had on the manufacturing bit is we hear that there has been some softening in prices on the non-DCR modules, whereas DCR remains strong heading into this quarter as well. Would you agree to those points on both those points?
Yes, Nikhil, again, along expected lines, I would say, as more capacity has come online, that sort of trend does tend to play out. But also there's a factor of seasonality where it was a lean season in terms of construction activity. So we saw some slowdown in sales. So obviously, prices also could have moved down a little bit. Let's see how the rest of the year pans out. But again, as capacity comes up, the supernormal margins that we were getting would have corrected over a period of time in any case. And on the DCR side also, I would say that while right now, there's no immediate concern, but there is more capacity coming online on the sell side also. So again, the margins would go to normalized levels over a period of time.
Perfect. Very helpful on the manufacturing bit. My second question then was on the renewable assets. If I look at the committed pipeline of 7 gigawatts, which is to be built out, there is about 2 gigawatts of solar where I think the timeline clarity is better. But the balance 5 gigawatts seems to be the complex projects, FDRE, RTC where the timeline given is 2 years from PPA subject to transmission. So I would appreciate if you could give some more color on when do you expect this balance capacity to come online, the committed pipeline in the complex FDRE, RTC part with a substantial number.
So on the committed pipeline side, we are expecting some of the transmission projects are yet to be awarded. So we won't have the exact sense of what the timelines on those would be. But again, given our understanding as it stands currently, by FY '29 is when most of it would get done and some part only could overflow beyond that.
Understood. So then is there a possibility that if I spread this 7 gigawatts till FY '29, there could be a drop in capacity addition in FY '27 or FY '28?
No, we continue to build on the pipeline, Nikhil. And also there will be within the state, intrastate type of projects, which we could evaluate and participate in some of those auctions or do C&I. So I think as a company, we have been on this capacity addition trajectory. So I don't see any reason why that should change because of connectivity not being available.
Got it. And directly, if you could tell me, have things gotten better on transmission project completion or right of way for that part? Or is it similar to where it was last year?
It's difficult to determine because each transmission project varies in its characteristics, affecting whether it is completed on time or faces delays. Currently, in Rajasthan, which has been relatively straightforward in terms of execution, some right of way issues are also emerging.
Got it. That's helpful. My last question was then on the future or the ongoing bidding. We see a lot of battery energy storage tenders happening. And I mean, to us, the bids seem quite aggressive, but wanted to hear your thoughts if ReNew feels similarly, and that's why ReNew has not been very active on that front.
That's absolutely correct. Our actions are reflective of what our belief is.
The next question comes from Puneet Gulati with HSBC.
My first question is if you can talk a bit about whether you also experienced any curtailment during the last quarter and what was the extent of that?
Sumant, would you like to take that?
Yes, sure. No, no, we did experience some curtailment in some of our projects in Rajasthan, Puneet. And the extent of that was about INR 100 crores in terms of actual rupee number in the first half. These are linked to projects where we have...
Of revenue.
Yes. Of revenue, yes. So these are linked to projects where we have PG&A, where the substation is ready and so we have to connect. But sometimes the back-end lines are not ready to give us the full G&A. I think this will continue to some extent until some of those back-end lines are done, which will probably happen in the next couple of months. So at least in those areas, that curtailment will go down.
Okay. That's very clear. And in terms of just absolute power capacity, what number would that be in terms of curtailment?
So assume an average tariff of maybe INR 3.50 to INR 4.
Okay.
So it will probably be whatever units were passed through.
Yes. Yes. Secondly, on the connectivity side, you have the target of 1.6 to 2.1 for this year. Is connectivity ready for all these projects up to 2.1? Or is it still where you are banking on timely commissioning of connectivity?
I would say most of it is very. There is one, of course, issue that is currently going on, which is the Great Indian Bustard issue that the Supreme Court is opining on. I think that is the only externality that we are facing in these projects. But hopefully, that gets resolved, and therefore, that doesn't end up being a constraining factor. But regardless, even if there is a delay, it will be a delay of a month or 2 months at max. So it's not going to be substantial from the point of view of impacting financials that much.
Okay. And lastly, you've commissioned RTC peak power projects. Can you also talk a bit about how those have been going in terms of how much capacity are you now selling outside? And how has the battery performance been?
I don't think I have exact numbers to give you or to share with you, Puneet, on this one. Anunay or Kailash, if you guys have data then please do go ahead.
So Puneet, the peak power project is fully commissioned with a total of 400 megawatts of renewable energy capacity and 150 megawatt hours of batteries completed. Our experience has been quite positive. For the RTC, the batteries are operational as well, along with nearly 1,100 megawatts of renewable energy capacity, comprising about 700 megawatts of wind and 400 megawatts of solar. Overall, there are no significant concerns regarding the operating performance of these projects.
The next question comes from Maheep Mandloi with Mizuho.
Maybe one question just on the manufacturing side. And I think Kailash you talked about normalized margins or hitting that in the future. Can you just talk about like what expectations are on normalized margins in the future for cellular modules?
So Maheep, it's hard to say at this point in time. When we do our projections, we don't take 35%, 40% type of margins. We are more like reasonable. And it will be a function of what happens as far as the demand-supply situation is concerned. So let's see, it will be hard for me to give you an exact number.
Got it. But any thoughts on when we hit that, like maybe 1 or 2 years after the approved list of cell manufacturers go into effect or when we get there?
So as part of ALMM for sales, also a lot of capacity is coming up. Some of it is coming up now before ALMM comes into being, which is April next year. And so to that extent, there would be some additional supply also, which is there in the DCR market right now. But then again, as the window for ALMM on sales starts, then again, you'll see margins spike up briefly. So I think whichever segment of the market, there is scarcity, we are seeing an initial period of, say, 12 to 15 months, 18 months, where we are making higher than our expected margins.
Got it. Got it. And I would love to just kind of question on the privatization bid here. Saw the latest updates from your press release recently. Any updates after that on the offer or any bids you're receiving from other investors?
No. If there was any other bid, then that would have had to be announced to the market. At this point in time, the special committee has only received the bid from the consortium.
And any thoughts on the timeline here? Or the consortium had a timeline of, I think, plus 1 year. Is that a fair kind of timeline for the closing there?
I mean that's what they have shared in their filings. Hopefully, we will be efficient about it to the extent some of the processes, which are within the control of the company is concerned.
Just to clarify, the consortium indicated a timeline of approximately 7 to 8 months. As Kailash mentioned, our assessment is that we hope it can be earlier than that, and this is likely at the more cautious end of the estimate.
And we have a follow-up from Nikhil Nigania with Bernstein.
I just had one follow-up question. On the 6 gigawatt of solar, which is where the LOA is awarded but the PPA is not signed, there were multiple press articles recently highlighting government plans to cancel this 42 gigawatts of renewable tenders where the tenders have been awarded but PPAs have not been signed. Any thoughts on that? In light of that, could this 6 gigawatt go away?
My view on that, Nikhil, is that there were a lot of things that came out in the press. But finally, the final word on it is what MNRE said, which is that they are working and encouraging the REIAs to get all the PPAs signed and that they will continue to work at it. And any cancellations, if at all, will be done after a lot of effort has been put in and on a very selective and case-by-case basis. So I don't see any blanket sort of decision being taken on this. I think it will carry on for some more time. People are going to continue to put an effort to get this PPA signed. And it's only after maybe another 6 months, 9 months, or a year that we will see what happens in case some of the PPAs even after, let's say, a couple of years of having got bid out have not got signed, what action the government then takes. I think at this point, it's still premature.
Now I would like to pass to Anunay Shahi for online questions. Please go ahead.
Thank you. There are a couple of questions online. One is, Kailash, if you could take this, is what are the plans for refinancing the Diamond II bonds due in 2026 and the ING PH, which is a restricted group issuance that is due in 2027. And is the plan to refinance it again with dollar bonds or locally in INR.
So the answer to that question is that the maturity for both those bonds are in the late second half of next calendar year. And we are working on plans to refinance it. We will see whichever market offers the lowest cost of capital to refinance, we would pursue the refinancing in that market. Having said that, overall, the financing markets continue to remain quite strong and robust, and access to capital is there across multiple pools that we typically access, which includes not only the dollar bond market but also the domestic financing market where the public sector undertakings, the financial institutions, and the private sector banks, they are all quite active and focused on financing renewable energy projects. So we don't foresee any major challenges in the refinancing whenever that becomes due.
The second question, Kailash, I think this is for you as well, is on the status of the take-private offer. I think the question is, when do you expect the consortium to firm upon their offer? Is it likely to be in November? And second question is, are you in regular discussions with them? And do you know if they are talking directly with some of your long-term shareholders?
Okay. Just let me know if I miss any answer. The Special Committee has shown its support for the final nonbinding offer received and has asked the consortium to convert it into a binding offer. We expect to receive the final binding offer from the consortium sometime in November. After that, there will be a process for documentation, including signing the transaction agreement, working on the 13D filings, and then the E3 filing for SEC review. I am in touch with the Special Committee whenever those meetings are held along with the company's General Counsel. The Special Committee is engaging with some of the large public shareholders, and if any of these shareholders have shown interest in speaking with the consortium, they are facilitating that as well. I think I’ve addressed some of the questions, so let me know if I missed anything.
No, I think that was perfect.
Okay.
As there are no further questions at this time, this concludes the question-and-answer session and the ReNew second quarter fiscal year '26 earnings report for today. Thank you for participating. You may now disconnect.