ReNew Energy Global plc Q3 FY2025 earnings call

Macro Environment

• In India, GDP growth is expected to pick up from Q3 fiscal 2025, inflation is benign with RBI rate cuts anticipated, power demand has increased since December 2024, and the renewable energy environment in India is promising with over 50 gigawatts of renewable energy capacity auctioned during the year.

ReNew's Operations

• ReNew has entered the 15th year of operations with nearly 11 gigawatts of commissioned capacity. It achieved one of the highest year - to - date megawatt commissionings with approximately 1.3 gigawatts and 150 megawatt hours of batteries commissioned so far this fiscal year, and a total of 2.6 gigawatts delivered since December 2023. The company has secured 3.9 gigawatts of renewable energy capacity and 600 megawatt hours of BESS through auctions so far this fiscal year. There has been a strategic shift towards more complex projects, and it won its first solar plus battery energy storage system tender. The manufacturing facility is expanding, producing about 10 megawatts per day of modules, and has an external order book of 2 gigawatts. ReNew has strong ESG performance, being the highest rated pure play renewable energy company in India by S&P and its Jaipur manufacturing plant achieved LEED Gold certification.

ReNew's operational portfolio has seen a 26% year - on - year increase in megawatts, standing at 10.8 gigawatts. The total committed portfolio has grown by 27% to 17.4 gigawatts. In the manufacturing business, in Q3 of fiscal '25, it generated an EBITDA of approximately INR560 million. The manufacturing facilities have produced an aggregate of 3.6 gigawatts of modules and are approaching an average daily production rate of nearly 10 megawatts. The external order book for manufacturing is 2 gigawatts, including 1.1 gigawatts of sales plus modules.

• Lowered the FY2025 EBITDA guidance range to INR74 million to INR78 million and the cash flow to equity guidance to INR11 billion to INR13 billion due to lower wind PLFs. - Reaffirmed the megawatt guidance, which is dependent on timely regulatory approvals and the build - out of transmission infrastructure. - The run rate guidance for the target portfolio of 17.4 gigawatts is up 1.1 gigawatts since the last quarter.

• Wind PLFs trended lower, impacting the FY2025 EBITDA guidance. - Currency depreciation could potentially affect the transmission of rate cuts to borrowing costs. - Wind projects face challenges such as land availability, transmission access, and PPA signing. - Module sales prices and patent lawsuits in other regions could potentially have indirect impacts, but currently, ReNew has no exposure to US market exports which are mainly affected by such issues.

Q: About wind PLF, what's the reason and trend into Q4?

A: The PLF reduction was entirely on account of wind. Wind speeds in Q3 were significantly lower. As for Q4, wind speeds are getting closer back to normal but not entirely back to normal yet.

Q: On battery plus solar solutions returns?

A: A lot depends on the assumptions on battery pricing. Battery prices have continued to go down, making solar plus battery solutions attractive. The returns are between plain vanilla solar projects and more complicated around the clock projects, with solar plus BESS having returns in the middle.

Q: On solar cell business sales prices?

A: Sale prices in the market right now are fairly attractive. ReNew is selling cells into the external market, and the manufacturing business is expected to contribute to profitability in the coming quarters.

Q: On PPA signing and LOEs?

A: This year, there has been reasonably decent progress on PPA signings. There are some unsigned PPAs, but the government is considering slowing down the pace of bids to allow old bids to get signed, and it's likely that most PPAs will get signed. LOAs from earlier bids may not be canceled easily as canceling them could lead to reputational damage and issues with connectivity allocation.

Q: On the buyback process?

A: It's an offer by a group of shareholders to buy out public investors with the intention of taking the company private. The offer is being evaluated by the special committee advised by Rothschild and Linklaters, and no update on the timing will be given until there is a development.