管理層發言
Thank you for your patience, and welcome to ReNew's Third Quarter FY '26 Earnings Report. I will now turn the call over for opening remarks. Please continue.
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. 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.
Thank you, Anunay. Good morning, everyone, and good evening to those in different time zones. I'm pleased to welcome you to our earnings call for the third quarter and the first nine months of fiscal 2026. The year has started positively, particularly with the recent trade agreement between India and the U.S., which is expected to alleviate uncertainty and potentially reopen the U.S. market for Indian exporters, benefiting the overall economy. This agreement has also strengthened the rupee against the dollar. Moreover, the financing environment remains favorable, with interest rates trending downward. As a result, India's growth projections are expected to remain above 7% for fiscal 2026, with similar forecasts for fiscal 2027 by the Government of India. In our sector, we've observed a recovery in electricity demand, which rebounded significantly in December 2026, with slightly improved numbers in January 2026. We anticipate power demand will return to normal levels in fiscal 2027. Today, I will share updates for the quarter and outline our strategic direction as a company. Since December of last year, our operating capacity has grown from 10.7 gigawatts to 11.8 gigawatts. After selling 900 megawatts during this time, our portfolio has actually increased by 19% or 2 gigawatts in the last 12 months. We are focused on optimizing our portfolio to reduce execution risk, capital expenditure, and ensure more predictable cash flows. Consequently, we've decided to replace part of our wind capacity with battery energy storage systems and solar capacity. As a result, we've reduced our committed wind capacity from 2.5 gigawatts to about 850 megawatts, bringing our total capacity to 19.2 gigawatts, which includes roughly 1.5 gigawatts of batteries. This shift allows us to lower capital expenditure, mitigate execution risk, and forecast our future cash flows more accurately due to reduced weather volatility. In terms of financial performance, our adjusted EBITDA rose by 31% to INR 74.8 billion for the nine months ending December 31, 2026, along with a more than sixfold increase in profit after tax. We successfully raised $600 million through a bond offering, refinancing our previous bond due in July 2026. This offering was met with high demand, exceeding $2 billion, allowing us to reduce our interest rate from 7.95% to 6.5%, saving approximately $9 million in annual interest. This was also the first bond issued through GIFT City. We continued our capital recycling efforts, selling an additional 300 megawatts 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 our guidance range for adjusted EBITDA and megawatts for the year. We now expect to achieve between INR 90 billion and INR 93 billion in adjusted EBITDA, with our manufacturing business contributing between INR 11 billion and INR 13 billion. We've also narrowed our project guidance and expect to construct between 1.8 and 2.4 gigawatts in the fiscal year ending March 31, 2026. Importantly, ESG is central to our operations. I'm pleased to share that we continue to excel in our ESG commitments, receiving an A grade rating and a score of 90.41 out of 100, placing us in the top quartile globally. We also received an A grade from CDP Climate Change and Water assessments for our effective water management practices and have achieved water positive certification for two of our sites. This year marks a significant milestone as we celebrate 15 years of operations, now with three mature businesses: utility-scale IPP, C&I, and manufacturing. We have commissioned approximately 1.9 gigawatts, enhanced our manufacturing capacity, and raised $100 million from British International Investments to finance cell expansion in our manufacturing business. Our C&I segment is a leader in the market, with our portfolio expanding by around 30% over the past year through contracts with notable customers. Our leverage is also decreasing notably, now approximately 5.5 times for our operating portfolio based on debt-to-EBITDA. Our key strengths include our large portfolio size and our developed in-house O&M and EPC capabilities. We've secured connectivity for our entire portfolio, including 5 to 6 gigawatts of spare connectivity, a crucial differentiator as timely connectivity is vital in our sector. We have consistently grown our EBITDA by around 17% per year since our listing, without issuing new equity, but through capital recycling, which has been more beneficial for us. We have mitigated execution risks and improved cash flow predictability by expanding our BESS and solar capacity, reducing reliance on wind. These changes will facilitate faster execution and more stable revenues, supported by long-term PPAs. Our capital needs will continue to be met through a blend of internal cash generation and capital recycling, helping to enhance returns. Moving forward, we will focus on strengthening our balance sheet and reducing leverage further while aiming for improved returns and cash flows. Having examined our current configuration, we show that by selling about 1.6 gigawatts over time, we could achieve a portfolio of 19.2 gigawatts without needing external capital and reduce overall leverage from 6.7 times to under 5.5 times. More asset recycling could allow us to continue lowering corporate debt. In terms of operational performance, our operating portfolio now stands at 11.8 gigawatts, reflecting a 19% increase after adjusting for recent asset additions. Our total portfolio, including BESS, has reached 19.2 gigawatts. In the last nine months, we commissioned over 600 megawatts from wind and over 900 megawatts from solar projects. Our manufacturing business exceeded expectations, delivering an adjusted EBITDA of INR 10.8 billion in the first nine months. We currently have an external order book of 900 megawatts. Our cell facility, under construction, is progressing well and is expected to produce its first cells later next fiscal year. Our module facilities have a current production rate of over 12 megawatts per day and have produced 3 gigawatts so far this year. We've sold over 2.6 gigawatts of modules, with approximately 1.5 gigawatts sold externally for our operations. Our C&I segment has performed exceptionally well, establishing partnerships with tech leaders like Amazon, Microsoft, and Google, resulting in 50% of our portfolio coming from these clients. This business is well-positioned to capitalize on emerging opportunities in energy management and renewable energy supply to data centers. Now, I will hand it over to Kailash to detail the financial highlights.
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 gigawatts of projects, a 19% increase in operating capacity after adjusting for the 900 megawatts sold during the trailing 12 months. This year, so far we have commissioned 1.6 gigawatts of renewable capacity. Our revenue increased by 48% for the first 9 months of this fiscal compared to last year due to an increase in megawatts and a meaningful contribution from 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. We had reduced from 8.2x in December 2024 to 7x debt/EBITDA at present, and at 6.7x once you exclude the contribution from our joint venture partners. On a trailing 12-month basis, the leverage for our operating portfolio was approximately 5.6x. Do note that our trailing month EBITDA is not reflective of the run rate EBITDA for these assets as many of these assets have less than 1 year of operations. We continue to pursue all options that will decrease our leverage ratio at the consolidated level, 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. 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 one from India's GIFT City, making it a marquee transaction. This issuance received strong investor interest of 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 the sale of a 300-megawatt solar asset, taking our total asset sales for the year to 600 megawatts, through which we have raised a total of $275 million through capital recycling this year, including the $100 million that we raised from British International Investments from our manufacturing business. Let me now hand it over to Vaishali for comments on ESG.
Thanks, Kailash. Turning to Slide 25, let's look at the advancements in our sustainability initiatives and targets. The global landscape for ESG in 2026 demands 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, we received a remarkable score of 90.41 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 2 sites as water positive. 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 4 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 ’24/’25. 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. Our initiatives have positively impacted over 1.7 million lives so far. A major highlight is our Project Surya, which is skilling 1,000 salt pan workers as solar technicians, with 720 women trained and over 200 placed in the sector, significantly boosting our gender equality and skill employment. Under governance, we are making strong progress towards our target to rank amongst the top 5 global energy and utilities companies by 2030 across leading ESG rating agencies. This is reflected in an S&P Global CSA score of 84 and 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.
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 to INR 93 billion. We now expect to construct 1.8 to 2.4 gigawatts, up from 1.6 gigawatts at the lower end of projects during the year, and generate cash flow to equity of INR 14 billion to INR 17 billion. We are also increasing the guidance for the adjusted EBITDA contribution from our manufacturing business to INR 11 billion to INR 13 billion. With that, we'll be happy to take questions.
分析師問答
Your first question comes from Maheep Mandloi with Mizuho.
Okay. Just one question on the revised strategy, something that you talked about having more solar and BESS-only projects going forward. Could you just talk more in detail about that, what drove that decision, so all the puts and takes there? And on the solar side, you have been manufacturing the modules yourselves. Are there any plans to also do something like that on the BESS side as well?
Thank you, Maheep. The primary reason we are reducing the amount of wind in our portfolio is that, during the bidding for some projects, the price levels for battery energy storage systems (BESS) were considerably higher than they are now, as was the case for solar. With the decline in BESS prices, the ability to generate stable power using solar combined with BESS has improved. Consequently, to meet customer needs, we require less wind in our new configurations. This is one reason for the decrease in wind capacity. Additionally, our experiences with wind projects have shown that performance has been lower than expected over the past five to seven years, and we are uncertain about when this trend might change. It could improve next year or take longer. Overall, wind presents more variability than solar, and project execution is generally simpler with solar, particularly in regions like Rajasthan where land acquisition is more straightforward compared to the agricultural areas in Deccan and Central India where wind projects are located. For these reasons, we have decided to reduce our wind capacity. We have reconfigured nearly 7 gigawatts of capacity in our power purchase agreements to focus more on solar plus BESS, reducing our wind capacity from 2.5 gigawatts to approximately 1 gigawatt. Regarding BESS manufacturing, we haven’t seriously considered it yet. This is mainly because there are currently no restrictions on importing batteries from China, which can be obtained at a lower cost than domestic production. Additionally, battery technology evolves rapidly, requiring more specialized knowledge to navigate the right cell technologies. Much of the cell manufacturing is driven by the electric vehicle industry, which isn’t a market we intend to target for our BESS production, limiting our interest in cell or battery manufacturing at this time.
Got it. I appreciate that clarity. And then maybe just on the update on the take-private or the course since here, like in one of the slides you talked about the path forward here. Is that the strategy going forward, or should we expect more in terms of the path forward, or more talks on privatization here?
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, should there be something that requires to be commented on, the company will make an appropriate disclosure at that time.
The next question comes from Nikhil Nigania with Bernstein.
Good to see the focus on reducing leverage and increasing solar plus BESS instead of wind. My first question was on the industry issues, which are broader, which is transmission project delays, and curtailment, both of which are outside our control but are impacting the industry. Are we seeing any directional improvement on those two aspects, or do they continue to be a hurdle for us?
Yes, Nikhil, thanks for the question. So you know that, obviously, these are issues that have received a lot of visibility because they're impacting the industry as a whole, and therefore, there has been a lot of discussion within the ministries, namely the MNRE and MoP on how to deal with this issue. And there's a lot more focus on improving transmission execution. There are various things that the government is doing, which I can inform you about separately perhaps or you can also find out what's happening. The same applies to curtailment. Essentially, a joint committee has been established between the secretaries of MNRE and MoP to look at how to address this issue and how to effectively manage the loss, which of course accrues to us, but should actually be borne by a broader set of stakeholders. This is currently under discussion. I don't know exactly what direction it will take or how long it might take to reach the right conclusion, but certainly, there is recognition that this is a systemic loss and that there is no reason for only the developers at the sharp end of the stick to be taking on this loss in our books. That philosophy is accepted. What their idea of dealing with this is something that the government is considering. They are also working on various initiatives to see how they can improve the transmission build-out.
Got it. Just a follow-up on that, on the curtailment bit. Is it fair to assume that where we have a GNA and not a T-GNA, we are compensated by the DISCOM in case of curtailment?
Yes, that's correct. In our case, of the total loss we've experienced due to this combined issue, we are receiving compensation for about 30% to 35% because we have a permanent GNA. With a permanent GNA, compensation is based on our schedule rather than the power we are supplying. In situations involving a T-GNA, we must absorb the loss ourselves, and the government is currently exploring ways to share that loss more evenly among all stakeholders. However, with GNA, we do receive compensation.
Got it. Appreciate that. And one last question on the manufacturing bit. I mean, a good source of cash for us. On the cell manufacturing side, are we seeing any compression in margins or do those continue to hold strong?
So far, it has held up. There was a temporary lull during the monsoons when inventories tended to build up a little, and execution slowed down. However, margins have again picked up a little bit in the current quarter. It seems like the demand is reasonably stable at this point.
The next question comes from Puneet Gulati.
My first question is on the change in configuration with more towards BESS and solar. Would it be fair to say that, even unadjusted for risk, the IRRs are better than what you could get out of wind?
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 IRR than solar, because CapEx has historically 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 prices have actually gone up due to developments in China. So it's a little time-dependent. But generally, I would say that solar has tended to yield higher returns than wind due to the reduction in CapEx over a longer period. So if you're executing projects with wind versus solar, you'll earn more out of solar.
So 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. Whereas, on the other hand, the EBITDA is only declining by around INR 6.5 billion to INR 6.8 billion. So effectively, our EV EBITDA for the under-construction portfolio is improving a bit, apart from obviously having greater control over execution and more predictable cash flow. So even from a return perspective, because of where BESS prices have trended and solar prices have trended, it’s better for our returns.
Understood. And secondly, in your overall production or capacity, how much would be under T-GNA? And what sort of curtailment would you have faced in the third quarter?
In the current quarter. See, T-GNA is not a fixed number. If you just ask for the last quarter, actually, some of our projects moved from T-GNA 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 gigawatt earlier, now it's perhaps down to 400 megawatts or 500 megawatts, because 500 megawatts or thereabouts moved from T-GNA to GNA. But as you build new projects, it depends on the substation that you're connecting to. If that substation hasn’t been properly connected at the back end through various other transmission lines to the national grid, then any project that connects to the substation faces or gets T-GNA. And then whenever those back-end transmission lines are built out, then that T-GNA converts to GNA. So it could be that a project is on T-GNA for a quarter or two quarters, and it's some part of the new projects that you're building out. So that is the way it is working. There could be 500 megawatts, 700 megawatts that are at any given point in time on T-GNA.
Okay. And on the T-GNA capacity for last quarter, how much would be that faced curtailment?
Anunay, do you have those numbers?
Yes. So Puneet, when we started the last quarter, there was roughly, as Sumant said, close to 1 gigawatt of capacity on T-GNA, out of which about 600-odd megawatts moved to permanent GNA. So currently, we have maybe somewhere 400 megawatts or a little below that which is on T-GNA.
And by the way, when something is on T-GNA, 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 in that range. And that also depends on the day and the demand and all of those factors.
Got it. And lastly, you talked about your target leverage ratio at 5.5x for a fully constructed portfolio. You're already at 5.6x for your operational portfolio. How much more do you want to bring your leverage down? Is there really a need to bring down leverage? Once a portfolio is constructed, it should automatically be there. Or is there a general need to bring down high leverage?
Kailash, do you want to take that?
Yes, I can address that. I want to clarify that when we mention 5.5x, we're referring to the headline leverage. Currently, it's closer to 6.5x or 6.6x. Our goal is to reduce it to that level over time. But yes, Kailash, please proceed. Yeah. I think, Puneet, so that's one clarification, and the other thing is that overall feedback that we have received and we also believe strongly in that is that we need to have more accruals coming to shareholders than to debt providers. In that context, obviously, bringing down leverage is the easiest way to do that. Because I think cost reduction, we have managed to achieve as much as we can, but I think it's just a headline debt number, which takes out the free cash flows to the firm. That's the reason why we'd like to bring it down.
Understood. 6.7x going down to 5.5x is what one should think about. Any target date in mind or year in mind?
No. So I would say that, based on whatever number crunching that we've done, I think, between '28 to '30 we will be able to achieve this.
That does conclude our Q&A session and our conference for today. Thank you for participating, and you may now disconnect.