ReNew Energy Global plc Q2 FY2025 earnings call

• Commissioned 860 megawatts in the current fiscal year and is on track to meet megawatt guidance. An additional 350-400 megawatts installed will be largely commissioned in Q3. - Total portfolio grew 18% absolutely and 21% when adjusting for assets sold last year. Signed PPAs for 2.9 gigawatts of renewable energy capacity in the current fiscal year, expanding the portfolio to 16.3 gigawatts. - Manufacturing facilities: Cell plant in Gujarat began trial production. Facilities are featured in Bloomberg Tier 1 and PVEL Top Performer lists, with an external order book over 900 megawatts. - Demonstrated capital discipline, focusing on returns above cost of capital (targeting levered returns 16%-20%) and securing 1.4 gigawatts of additional capacity this fiscal year with returns meeting thresholds. - ESG: Achieved carbon neutrality for the fourth consecutive year, with a 10% reduction in Scope 1 and 2. Strengthened ESG policies, and CSR has impacted over 1.4 million people across 500+ villages in India.

ReNew reported a 14% growth in adjusted EBITDA for the quarter, driven by cost optimization. Total operating capacity net of assets sold in the previous fiscal year grew by approximately 30%. The total portfolio in absolute terms increased by about 18%, with a current contracted portfolio of 16.3 gigawatts including 900 megawatts of battery storage capacity. The 6.4 gigawatt solar module manufacturing facilities are fully operational, and the cell facility has started trial production. The external order book for manufacturing stands at over 900 megawatts.

• Reaffirmed megawatts guidance despite challenges in wind execution. - Adjusted EBITDA guidance maintained. - Contracted portfolio updated to 16.3 gigawatts. - Seasonally, Q3 numbers are typically lower than Q2 due to weather patterns.

• Extreme weather changes globally, such as forest fires, floods, and poor air quality, impacting energy demand and supply. - Government plans to impose an ALMM for cells starting April 2026, which could affect manufacturing plans. - Potential transmission readiness and connectivity issues that could delay project commissioning.

Q: About the RTC project completion and transmission readiness.

A: The RTC project will be ready in the second half of 2025, and transmission is on track. Some capacity can be sold in the merchant market.

Q: Impact of new cell manufacturing restrictions.

A: The government is giving 18 months notice, and ReNew is considering expanding cell capacity to meet internal requirements.

Q: Cost optimization drivers.

A: Discretionary spend cuts, renegotiation of O&M contracts, and writing back provisions have driven cost optimization.

Q: PPA signing slowdown and legacy contracts.

A: No slowdown in bidding, but there is a gap in PPA signings. Legacy contracts are under discussion with regulators.

Q: Module manufacturing benefits.

A: Modules are converted to TOPCon, and cell lines are Mono PERC. In-house manufacturing provides margin benefits, with an external order book over 900 MW.

Q: Wind PLFs and C&I portfolio.

A: Wind PLFs are down due to conservative forecasting, and half of the 1.3 gigawatt C&I portfolio is expected to commission this year, with the balance next year.

Q: Finance costs and CapEx.

A: Finance costs stabilized via hedging and refinancing of high-cost debt. Remaining CapEx for the year is around $200-250 million, with commissioned capacity guidance of 1.8-2.4 gigawatts.