RNW

Good day. Welcome to the ReNew Energy Global fourth quarter of fiscal year 2026 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. At this time, I would like to turn the conference over to Anunay Shahi, Head of Investor Relations. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining us today. We have put out a press release announcing our results for the fiscal 2026 fourth quarter, as well as for the full year ending March 31st, 2026. A copy of the press release and the earnings presentation will be available on the Investor Relations section on ReNew's 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 the 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. 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. It's now my pleasure to hand it over to our Founder, Chairman, and CEO, Sumant Sinha. Over to you, Sumant.

Thank you, Anunay, and good morning, good afternoon, and good evening to everybody. I'm glad to have you all on our earnings call for the fourth quarter and fiscal 2026. Before we dive into our earnings, I wanted to touch a little bit upon what is happening in the world and how it is affecting us in India. As you may be aware, India is heavily reliant on energy imports. With the war and the geopolitical situation in the Middle East, it has made energy security and relying on domestic sources of energy a top priority for the country. Given that India does not have too much oil and gas reserves, and with growing power demand, renewable energy becomes even more important than before.

India continues to see strong renewable capacity additions, with renewables seeing the highest ever installations at 51 GW in fiscal 2026 and accounting for 90% of new capacity. Solar remains the dominant growth driver. Increasing power demand, particularly during non-solar hours, is driving accelerated adoption of Battery Energy Storage Systems. Policy support, domestic manufacturing incentives, and a continued push for energy security are further strengthening the long-term growth outlook for the sector. I also wanted to highlight that it has been a wonderful year for us. Not only have our financial results improved in spite of the global macroeconomic volatility, our project execution stood out as well. This shows that the entrepreneurial spirit with which I founded ReNew remains as strong as ever after 15 years. Turning to the highlights on page six.

Fiscal 2026 has been a landmark year for ReNew, marked by strong execution, record profitability, reduced leverage, and continued progress in strengthening our platform for long-term growth. Our operating portfolio has now reached approximately 12.8 GW, representing a 25% year-on-year growth once you adjust for asset sales. We commissioned our highest ever megawatts in a year, delivering 2.4 GW. Our total committed portfolio now stands at 20.2 GW, including 1.7 GW of battery storage, with a pipeline which includes projects where we have won auctions but not signed PPAs yet, exceeding a total of 26 GW, which is up more than 2.5x-2.6x, in fact, since listing in August 2021.

Of the 20.2 GW of our committed pipeline, our C&I business comprises 2.7 GW, being one of the largest in India and having grown 7x in the last five years. In our C&I business, almost 50% capacity is tied up with large technology companies and hyperscalers. We see our C&I business, and specifically technology companies and data centers, to be big drivers of power demand growth. We continue to see strong demand for renewable energy in India, with peak demand increasing and expected to grow further in FY 2027. Importantly, demand growth during non-solar hours is increasing, which is driving the need for hybrid solutions and battery storage. Moving to our financial performance.

Fiscal 2026 has been our strongest year yet. We delivered adjusted EBITDA of INR 98.5 billion, exceeding the top end of our guidance, and achieved our highest ever profit after tax of INR 10.4 billion, up 2.3x from fiscal 2025. This marks our third consecutive year of profitability with strong cash flow generation and improving balance sheet metrics. We continue to be laser-focused on continually reducing our leverage and our net debt to EBITDA declined by 1.1x year-on-year. This has helped improve our profitability as well. Our interest expense to adjusted EBITDA ratio has declined from 66% in fiscal 2025 to 61.5% in fiscal 2026.

Our receivables position is also the best it has ever been, and we have received a favorable Supreme Court order with respect to almost 50%, five zero, of the overdue Andhra Pradesh receivables, and we have started receiving initial payments with respect to some past due receivables. Do remember that outstanding AP receivables constituted more than 50% of the overall DSOs. We continue to execute our capital recycling and funding strategy and raised the highest ever $375 million during the year. This comprised of $195 million through fundraise in two mature businesses, the manufacturing business and the C&I business at attractive valuations, along with an additional $180 million through the sale of 600 MW of projects. Part of these proceeds have been used to repay debt.

This has helped us strengthen the balance sheet and reduce leverage with net debt to EBITDA improving meaningfully. A key driver of growth this year has been our manufacturing business, which contributed INR 14.8 billion EBITDA to our consolidated results. This business continues to scale rapidly, supported by strong demand and our integrated manufacturing capabilities. We expect to start production at our 4 GW cell facility towards the end of this fiscal year. ALMM II, which mandates domestic sourcing of cells, kicks in from June 2026, and the C&I sector, which added 10 GW of capacity in India in fiscal 2026, will transition immediately to domestic cells. In addition, the Government of India continues to prioritize indigenization of supply chains and has introduced ALMM III, whereby ingots and wafers will also have to be procured domestically from June 2028.

Alongside this, we have announced our 6.5 GW ingot and wafer plant in order to keep capturing the higher margin and more complex parts of the manufacturing business. We expect to fund this expansion through a mix of internal accruals and an external fundraise. Strategically, we are increasingly transitioning our portfolio towards solar and battery energy storage, reducing reliance on wind. This shift allows us to improve execution timelines, enhance predictability of cash flows, and reduce capital intensity. Page nine highlights how we are well-positioned and diversified across key renewable energy segments, utility scale, C&I, and manufacturing, which provides us a resilient growth platform. Page 10 illustrates our integrated renewable energy business model, supported by a strong financial and fundraise engine. Let me now turn to business updates on page 12.

Renewable energy is the cheapest source of power, and we expect that we will continue to see growth in RE, driven by high solar megawatts and, increasingly, high battery installations. Renewable energy constituted 90% of the overall capacity additions in fiscal 2026, in line with the previous few years, mainly driven by expanded solar installations. After a muted fiscal 2026, we also expect power demand in India to increase meaningfully this year as El Niño kicks in, supported by a favorable base. India recently discovered a new highest-ever peak time demand of 256 GW. As mentioned earlier, there also continues to be a strong push towards indigenization and expansion of solar manufacturing in India, and the Government of India has hence proposed ALMM III for ingots and wafers to take effect from June 2028.

All in all, I don't see the RE juggernaut slowing down. The one sobering feature in fiscal 2026 has been the fact that grid expansion has not kept track with renewable energy installations. This led to some curtailment of RE projects, particularly in Rajasthan. While the impact reduced in Q4 of fiscal 2026, we expect this to have some impact in this fiscal, particularly in the first half. Turning to page 13. Our project execution remains strong. We have consistently delivered on our megawatt guidance. We have delivered over 2.4 GW of RE projects this year that included over 1.7 GW of solar projects and 600 MW of wind. From a long-term perspective, we will continue to target a similar mix in execution with the share of batteries gradually increasing.

We plan to accelerate some of the battery deployment in our portfolio as well. Our portfolio also continues to expand, and as we see the power demand coming back and focus shifting to energy security, we should see an acceleration in PPA signing as well. During FY 2026, we signed PPAs for around 2.5 GW of RE capacity, taking our committed portfolio to over 20 GW. That also includes 1.7 GW of BESS. Our total pipeline is now 26+ GW, including BESS capacity. Given the overall geopolitical uncertainty, we have managed our procurement for FY 2027 well. 50% of our modules are already at site, 100% of our battery and wind turbine prices are locked in, and land is largely tied up, giving us strong visibility on execution. Turning to page 14.

We highlighted our C&I business last quarter. I am happy to report that since then, we have raised $95 million for an 11.3% stake from a LeapFrog-led consortium to fund growth in our C&I platform. We remain extremely excited about this business. It continues to perform well with a total portfolio of 2.7 GW, including 2.2 GW commissioned at this time. Renewable penetration among C&I customers who consume 50% of the electricity in India and pay some of the highest grid tariffs remains low. We are one of the market leaders. We have strong relationships with high quality customers, including the leading global technology companies and hyperscalers, which account for almost 50% of our contracted capacity. This segment is also well-positioned to benefit from emerging opportunities, such as data center demand. Turning to page 15.

Our manufacturing business is another major growth engine. We now have one of the largest integrated solar manufacturing capacities in India, with strong and fast ramp-up across both module and cell production. In FY 2026, this business contributed about 15% of our overall adjusted EBITDA. We have invested around $80 million in this business and raised $100 million from BII in return for an approximately 6% shareholding. Given the restrictions on import of cells and modules and the shortage of supply, particularly in cells, the business has not only provided us security of supply, but has become a self-funded growth engine with attractive margins that will provide us with long-term profitability. We are also progressing well on our 4 GW cell expansion, with production expected in the second half of this fiscal. Turning to page 16.

We have announced a new 6.5 GW ingot wafer facility, which will further strengthen our backward integration and supply chain resilience and continue to protect our margins. We aim to fund this growth through a mix of internal accruals and an external fundraise so that the growth, cash flows, and margins do not get impacted. This will ensure that manufacturing business continues to provide us profitability in the long run. As the margins taper down a little, we expect the margins to keep remaining stronger upstream in cells first and then further backward to ingot and wafers. Overall, we remain focused on disciplined growth, improving returns and profitability, and reducing our leverage. I will now hand it over to Kailash for the financial updates.

Thank you, Sumant. Turning to page 18. We delivered strong financial performance in FY 2026, driven by portfolio growth, reduced leverage and therefore interest expense, contributions from manufacturing business, and disciplined cost management. Our adjusted EBITDA for the year was INR 98.5 billion, representing approximately a 25% growth year-on-year. As part of our deleveraging program, we also reduced our net debt to EBITDA by almost 1.1x turn, and therefore, our interest expense grew at a lower pace than our EBITDA. As a result of all these measures, our profit after tax grew by 2.3x from INR 4.6 billion in fiscal 2025 to INR 10.4 billion in fiscal 2026. Our cash flow to equity also grew by 45% to INR 21.6 billion in fiscal 2026.

The current year has seen a strong performance driven by a focus on reducing leverage, cost optimization, accelerated capital recycling and fundraise, and increased contribution by our manufacturing business. On the cash flow and working capital front, recently we saw the Supreme Court rule in our favor on the long-overdue receivable case from Andhra Pradesh. We expect that this should enable us to bring down our DSO days to under 50 by next year. Page 19 highlights the segment-wide contribution of the core business and the manufacturing to our overall performance. Our total income increased by 40%, supported by higher operating capacity and scaling of the manufacturing business. While manufacturing contributed INR 14.8 billion to the adjusted EBITDA in the consolidated results of fiscal 2026, it delivered more than INR 19 billion of EBITDA on a standalone basis.

In Q4 of fiscal 2026, we delivered adjusted EBITDA of approximately INR 23.7 billion compared to INR 22.1 billion in Q4 of fiscal 2025. This includes the contribution of INR 4 billion from our manufacturing business versus INR 3.6 billion in the corresponding quarter of fiscal 2025. In Q4 of 2026, we recognize fair value gain on conversion of a jointly controlled entity to a subsidiary, while the overall PLFs were also marginally lower compared to last year. Juxtaposed against this, last year the asset sale gains were reflected in this quarter, thereby leading to a higher pace. Turning to page 20. A key focus area for us has been balance sheet strength and reducing leverage. We have made significant progress in this, with net debt to EBITDA improving by approximately 1.1x year-on-year.

This has been driven by strong internal cash generation, accelerated capital recycling and fundraise plan. During the year, we raised approximately $375 million through asset monetization, a portion of which has been used to reduce debt. We have also accelerated debt repayments in fiscal 2026. Turning to page 21. While we are disciplined in our capital allocation, we are also prudent in our risk management strategies, continuing to actively manage our refinancing requirements. We have strong visibility on refinancing our upcoming maturities, supported by diversified access to funding sources, including offshore markets, domestic banks and institutions, and so on and so forth. Of the $1 billion due for repayment in about 12 months, we have already received commitment of $400 million, I'm sorry. We have already received commitment of $400 million.

We have a strong track record of refinancing and have refinanced more debt than our currently on our balance sheet. For example, in fiscal 2026, we've refinanced approximately $2 billion of debt. In these volatile times, our forex exposure also remains well hedged, with approximately 90% of our principal and all of our interest being fully hedged, which provides protection against the foreign currency volatility. While we saw the rupee depreciate quite sharply in FY 2026 by almost 10%, the impact on our overall interest cost was only around 30 basis points. Moving to page 22. We remain focused on maintaining capital discipline and enhancing returns, reducing leverage over time. Our target remains to bring consolidated leverage closer to around 5.5x for the fully constructed portfolio.

In terms of our portfolio, with the fall in battery energy storage system prices, we have pivoted to a solar plus BESS heavy portfolio option. This helps us improve our returns due to lower BESS and solar capital expenditure. Compared to the earlier configuration, our overall CapEx is down by INR 60 billion, while EBITDA has been impacted only by INR 7 billion by making this change. The updated configuration also helps reduce the risk profile of these assets and provide more certainty on generation and on execution. Given lesser variation versus wind, this will also make our cash flows more predictable once the project is operational. Wind projects will continue to play an important role, particularly in C&I and other higher IRR opportunities. We will continue to deploy our wind execution capabilities where we can generate an alpha in terms of returns.

Let me now hand it over to Vaishali for comments on ESG.

Thanks, Kailash. Turning to slide 24 now. Today, sustainability and geopolitics are inseparable. Recent political tensions and supply chain shocks have elevated energy security from a policy priority to a business imperative. For ReNew, that means our sustainability strategy is not an add-on. It is the mechanism by which we reduce national vulnerability, protect communities, and create enduring value. Our ability to navigate this complex landscape is being recognized by leading global sustainability benchmarks, marking a high note as we close the financial year. First, in the S&P Global Corporate Sustainability Assessment, we earned a spot in the S&P Global CSA Yearbook with a top 10% distinction globally and an industry-leading score of 84. Second, in the CDP Supplier Engagement Assessment, we achieved the A rating for the second consecutive year. Third, in the MSCI ESG rating, we achieved the highest possible AAA rating.

This places us in the top 19.5% of utilities globally and makes us the highest-rated energy utility in India. Finally, at the coveted CII-ITC Sustainability Awards, we received the Outstanding Accomplishment Award in Corporate Excellence, the highest category in this award. Together, these benchmarks demonstrate how ReNew is not only meeting ESG standards, but defining the industry pace. Moving to slide 25. Let's look at the data behind our targets. On environment, ReNew remains committed to achieving its SBTi validated net zero targets. We have rolled out key levers of our manufacturing decarb roadmap and initiated annual assurance calculations and disclosures for the financial year. People continue to remain at the very center of what we do. Our CSR journey mirrors the transformational trajectory of India's ongoing development.

Our CSR initiatives have positively impacted over 1.7 million lives, electrified 350+ schools, and established 200 smart classrooms and 125 digital labs. Our workforce diversity stands at 17.6%, progressing steadily over towards our 30% women workforce target by 2030. In closing, fiscal year 2026 has been a milestone year for ReNew. We surpassed our targets to deliver breakthrough results across major global benchmarks, including an MSCI AAA rating, an industry-leading S&P Global CSA score of 84, and the coveted A list in CDP. Our impact goes beyond just numbers. By embedding ESG at the very core of our business, we are positioning ReNew as a true pioneer in the global energy transition. We look forward to building on this momentum and sharing our progress in our third integrated report coming up soon.

I will now turn it over to Kailash to take us through guidance. Back to you, Kailash.

Thank you, Vaishali. For fiscal 2027, we expect to have adjusted EBITDA in the range of INR 103 billion-INR 109 billion, with continued contributions from both our core and the manufacturing business. This will be a 17% increase from the guidance range we provided last year. We expect our manufacturing business to contribute INR 10 billion-INR 12 billion in fiscal 2027. While we expect margins to moderate somewhat this year in the manufacturing business, the long-term EBITDA growth story in the manufacturing remains intact, with the 4 GW cell expansion expected to contribute meaningfully in fiscal 2028, and the ingot wafer plant to do the same in fiscal 2029. We also expect INR 1.2 billion from asset recycling.

We expect to construct between 1.6 GW-2.4 GW of capacity during the year and generate cash flow to equity of INR 18 billion-INR 22 billion. With that, we will be happy to take questions. Anunay?

Thank you, Kailash.

Thank you.

Operator, do we have any questions from the phone line? Please go ahead.

Sure. We'll begin the question and answer session. If anyone would like to ask a question, please press star and then one. If you are using a speakerphone, please pick up your handset before pressing the keys. If you would like to withdraw your question, please press star and then two. Our first question today will come from Maheep Mandloi of Mizuho. Please go ahead with your question.

Hey, hello, guys. Thanks for taking the questions, and congratulations on the nice quarter there. Maybe just a question first on the manufacturing business, the ingot wafer capacity, which I think we talked about last time and gave more color here. When should we expect that contribution? Does the guidance include any contribution from that business? I think mostly from the margin side, but curious if that would be for third-party sales as well.

Yeah, Maheep.

Kailash, would you want to take that?

Yeah.

Okay, go ahead.

Maheep, as I mentioned, the cell facility, TOPCon cell facility will be operational towards the end of this fiscal year. Right now the guidance doesn't include any contribution from that business, because initially it would be in sort of trial run phases.

I think he was asking about the wafer ingot plant. No, Maheep?

Yeah, yeah, that's right also. Yes, you know, for the wafer business.

Yeah, the wafer plant will be commissioned only by June 2028 or thereabout. Like, you know, it won't register in this FY 2027 financial year or in fact, even in the FY 2028 financial year.

Got you. Secondly, just on the performance this quarter, I think wind PLF was definitely better, but on solar we saw slightly lower. Was there any resource issue or some curtailments or how to think about that going forward?

There was some curtailment, Maheep. As I said, it was a little lower in Q4, but there was some degree of curtailment that happened. Resource, you know, efficiency was a tad lower, but on top of that, there was a curtailment. That's why the overall PLF for solar has been lower than last year.

Got it. Appreciate it. Thank you.

Again, if you would like to ask a question, please press star and then one. Our next question will come from Nikhil Nigania of Bernstein. Please go ahead.

Hi. Thank you for taking my question. My first question is on the solar cell manufacturing facility. While I see 2.5 GW in our presentation on the government ALMM list, it still reflects at 1.8 GW. Even the yield that we are seeing is closer to that kind of a capacity. Could you please clarify on that?

Yeah. The general yield is about 80%, so that is why we tend to have the output of around 1.8 GW at that time.

Understood. Got it.

Nikhil. The 2.5 GW is the template capacity. Yes.

Okay, got it. The second question I had was the DSM regulations which the CERC implemented, and then there was a stay order from Karnataka High Court. If it were to go through, what is the kind of impact that we can assume for our business, given our sizable wind portfolio?

Yeah. You know, if that were to go ahead, which first of all, let me tell you that there's a lot of conversation happening, and it is, there are some changes that are likely to be proposed to whatever the CERC had come out with. I don't think that the current guidelines are gonna continue as they are. There will be some change, and there will be some relaxation to it. Nevertheless, to answer your question, in case the current thing was supposed to continue, then there might be another INR 500 million of impact to the numbers for DSM for this year. As I said, we don't expect it to continue. There's likely to be some change towards the relaxation side.

Understood. Appreciate it. Just to clarify, the INR 500 million in the impact you said was for FY 2027, is it?

For FY 2027, yes. As you know, the CERC is proposing tightening of the band consistently over the next five years, right? The number I gave you is only for FY 2027. We frankly haven't estimated the numbers after that. As I said, in any case, it's gonna become irrelevant because the current system is unlikely to undergo some change, the one that they've proposed.

Makes sense. Thanks for that clarity. The other question I had was, what you were alluding to earlier is on energy security. There's a big push. Green hydrogen is an area we were discussing in earlier days. We haven't been very active on there haven't been too many tenders in that area. Are you hearing more opportunities emerge in green hydrogen, ammonia or methanol?

Yes, we definitely are. You know, there is a new green methanol tender that has been planned by the Government of India, I think, 500 KTPA. I think we'll also see a renewed formulation and bidding for some of the fertilizer-based tenders. There may be some speeding up for the refinery tenders. I mean, the exact bids have not yet been formulated because obviously we're dealing with a very emerging situation right now. What we're also seeing is demand picking up overseas. There's more activity happening in the overseas markets as well, especially in the Far East, and I think it'll also get reflected in Europe very soon. I, my sense is that green fuels will emerge as a bigger opportunity in the medium term.

Got it. Thanks for replying. One last question I had. I mean, it's a two-part question in a way. When we look at CEA forecast for power generation capacity addition, they are expecting some dip in solar addition in FY 2027-2028. It could be due to transmission issues, but wanted to hear your thoughts on that. A, are they underestimating it? B, are the usual transmission challenges which you alluded to earlier leading to curtailments as well, have they got any better or are they still the same?

You know, I can't say that there's any significant change from last year. I don't know what the CEA's latest numbers are. If you can just tell me what is the CEA proposing exactly for this year.

On solar capacity addition, they were expecting a decline in addition in FY 2027 from 2026 to 2027 and 2028.

Okay. look, I don't know what those numbers are based on, but, you know, just given the amount of PPAs that are outstanding, given the fact that there are so many operators now, developers trying to set up capacity, I don't think that there's any constraining parameter right now. We're also seeing, obviously, the distributed side, both rooftop as well as pumps, the pump side also progressing well. C&I demand is strong. I'm not sure that I would feel that there would be a slowdown in solar installations. I think if anything, we are sort of at a ramp-up phase at this point. Will transmission issues constrain it?

I think at the margin, perhaps it could have an impact, but a lot of people are trying to move out from Rajasthan into other states now and trying to take advantage of transmission capacities available in other parts of the country.

Got it. Thank you so much for answering. Those are my questions.

Thank you. There are no further questions on the phone line at this time.

I think-

I will now hand over to the webcast.

There are some questions on the webcast. Maybe we can pick those up. There's a question from [Jordan Gilmore]. I guess, Kailash, this is for you. The question is: Do you still have some USD bonds to be refinanced this year? How much is the quantum? What's the plan to refinance them?

Right. Jordan, we have $1 billion up for maturity, you know, starting January next year, rather in first half of 2027. As I mentioned earlier in my prepared remarks that, you know, we have $400 million commitment already sitting with us. We may do, you know, other refinancings, as we get closer to the time, which could be either a mix of, you know, dollar bonds or, you know, tapping into the onshore liquidity. You know, whatever provides us, you know, the lowest cost of capital, we would evaluate those options.

There's one last question from [Shishir Jain]. His question is, and I'm paraphrasing, is that ReNew India's Indian peers trade at a higher multiple than ReNew. Is the management considering an India listing for the business or any of the subsidiary businesses? Again, for you, Kailash.

Yeah. You know, it's a valid observation. I think, you know, we have noticed that too. You know, in that spirit is where I think, you know, some of the investors were looking to take the company private at some point because the multiples in the U.S. market are not really reflecting, you know, the value of the company, you know, compared to the peers. Given that the transaction didn't go through, we continue to remain listed in the U.S. At this point in time, we are not considering, you know, any listing in India.

Got it. One last question, maybe I can answer that, from [Carolyn Chu], is what is the CapEx required for the 6.5 GW ingot plus wafer facility, which we mentioned will be funded through internal accruals and external fundraise. Carolyn, we've mentioned this in the presentation. It is about INR 42 billion, assuming we don't do a captive power plant. Given that we will take some project debt for this, maybe around 50%-60%. The balance will be funded through cash accruals from the manufacturing business along with the external fundraise that we propose to do. ReNew parent won't be deploying any additional equity into the manufacturing business to set up this ingot or wafer facility.

I think those were all the questions.

That does conclude our conference for today. Thank you for participating. You may now disconnect.