Executive Summary / Key Takeaways

• ReNew Energy Global Plc ($RNW) is strategically transforming into a vertically integrated clean energy platform, leveraging its in-house manufacturing capabilities and focus on complex projects to drive margin expansion and sustainable growth in India's rapidly expanding renewable energy market.
• The company delivered robust financial performance in Q1 FY26, with Adjusted EBITDA surging 43% year-over-year to INR 27.2 billion and profit after tax reaching INR 5.1 billion, surpassing the full fiscal 2025 profit.
• A significant technological differentiator is RNW's solar module and cell manufacturing, including a new 4 GW TOPCon cell facility under construction, which provides supply chain security and a notable cost advantage of $0.015 to $0.02 per watt over market purchases.
• RNW maintains a disciplined capital allocation strategy, evidenced by its operating project leverage below a 6x threshold and successful capital recycling initiatives that have raised over $260 million in the past six months.
• The outlook for FY26 includes a target of 1.6 to 2.4 GW in new capacity construction and a revised upward Adjusted EBITDA contribution from manufacturing of INR 8 billion to INR 10 billion, signaling continued operational and financial momentum.

A Vertically Integrated Powerhouse in India's Energy Transition

ReNew Energy Global Plc, established in 2011, has emerged as a pivotal force in India's ambitious clean energy transition. From its modest beginnings with a 25.20 MW wind project, the company has expanded its operational capacity to 11.2 GW by FY25, with a robust contracted portfolio of 18.5 GW, complemented by 1.1 GWh of Battery Energy Storage Systems (BESS). This growth positions RNW at the forefront of India's drive towards 500 GW of renewable energy capacity by 2030, a market where renewables are increasingly the most cost-effective power source.

RNW's overarching strategy centers on vertical integration, disciplined capital allocation, and a strategic focus on complex, high-return projects. This approach has allowed the company to not only scale its operations but also to build a resilient business model in a dynamic market. The company's history of proactive project development, in-house EPC (Engineering, Procurement, and Construction) capabilities, and O&M (Operations & Maintenance) services has been instrumental in shaping its current competitive advantages.

Competitive Edge and Technological Leadership

RNW holds a prominent position as India's premier large renewables project company, particularly excelling in complex projects that demand specialized execution skills. While global giants like NextEra Energy (NEE) and Brookfield Renewable Partners (BEP) operate on a larger international scale with extensive R&D capabilities and sophisticated financial engineering, RNW's deep penetration and localized expertise in the Indian market provide a distinct advantage. This regional focus enables more efficient navigation of regulatory environments and faster project approvals, enhancing margins through streamlined operations.

The company's competitive standing is further bolstered by its integrated business model, which includes a significant solar module and cell manufacturing arm. This vertical integration is a critical technological differentiator, insulating RNW from supply chain bottlenecks and volatile raw material costs. The company operates 6.4 GW of solar module manufacturing and 2.5 GW of cell capacity, with a new 4 GW TOPCon cell facility currently under construction in Dholera, Gujarat. This expansion, supported by a $100 million investment from British International Investments, is designed to fully secure RNW's supply chain for solar cells and modules by FY27, especially in light of India's Approved List of Models and Manufacturers (ALMM) for cells.

RNW's technological prowess is quantifiable: its cell plant has achieved an industry-leading efficiency of 23.2% , and its TOPCon Bifacial modules boast 22.65% module efficiency and 585WP module power. This in-house manufacturing provides a tangible cost advantage, estimated by management at "at least $0.015 to $0.02 differential" per watt compared to external market purchases . This translates directly into improved financial performance and a stronger competitive moat, particularly in the high-growth domestic market. Furthermore, RNW is recognized as a Bloomberg Tier 1 module supplier and a PVEL Top Performer 2024, underscoring the quality and reliability of its products. The company also invests in R&D through a Center of Excellence at IIT Delhi, focusing on hybrid technologies, energy storage, and Round-the-Clock (RTC) solutions, which are crucial for grid stability and higher returns.

Financial Strength and Strategic Capital Deployment

RNW's strategic execution is clearly reflected in its recent financial performance. In Q1 FY26, the company reported total revenue of INR 41.18 billion ($480 million) and a net profit of INR 5.13 billion ($60 million), marking a significant 13-fold increase year-over-year. Adjusted EBITDA for the quarter surged 43% year-over-year to INR 27.2 billion ($317 million). This strong growth was driven by higher operational capacity and meaningful contributions from the manufacturing segment, which alone contributed INR 5.3 billion to Adjusted EBITDA at an impressive margin exceeding 40% in Q1 FY26.

The company's IPP business also demonstrated improved efficiency, with EBITDA margins expanding from 80.7% to almost 82% in Q1 FY26 due to ongoing cost optimization initiatives. For the full fiscal year 2025, total revenue increased by 19% to INR 97.06 billion, with a net income of INR 3.81 billion . RNW's focus on operational efficiency is further highlighted by its Days Sales Outstanding (DSOs) trending lower, reaching 71 days in Q4 FY25, a significant improvement from 138 days two years prior .

RNW maintains a disciplined approach to capital management, with leverage at the operating asset level remaining below its 6x threshold, reporting trailing 12-month leverage of approximately 5.7x EBITDA . The manufacturing business's cash flow has played a meaningful role in reducing overall leverage. The company has also actively engaged in capital recycling, raising over $260 million in the past six months through asset sales, such as the divestiture of a 300 MW SECI solar asset, to fund greenfield projects and maintain capital discipline . In FY25, approximately $2 billion in debt financing was raised, and $600 million of existing debt was refinanced, resulting in interest cost savings of 40 to 70 basis points .

Outlook and Strategic Momentum

ReNew's outlook for fiscal year 2026 reflects continued strategic momentum. The company reiterates its guidance to complete construction of 1.6 to 2.4 GW of new capacity . Adjusted EBITDA for FY26 is expected to be at the higher end of the INR 87 billion to INR 93 billion range, assuming stable weather patterns and successful asset sales . The manufacturing business is projected to significantly increase its Adjusted EBITDA contribution to INR 8 billion to INR 10 billion for FY26 . Cash flow to equity is guided at INR 14 billion to INR 17 billion for the upcoming fiscal year .

The company's strategic pipeline includes 18.5 GW of contracted capacity and a broader pipeline of over 25 GW of renewable energy, along with an additional 3 GWh of batteries . RNW is increasingly focusing on complex projects, such as solar-plus-BESS and Firm and Dispatchable Renewable Energy (FDRE) solutions. The declining costs of batteries are making these projects more attractive, improving IRRs, and reducing the variability associated with traditional wind-only projects . RNW's proactive strategy of securing interconnection approvals and developing large land banks well in advance provides a crucial competitive advantage, ensuring timely project execution despite occasional industry-wide transmission challenges.

Risks and Considerations

Despite its strong positioning, RNW faces inherent risks. Weather variability, as experienced in FY25 with subdued solar PLFs due to early monsoons and lower wind speeds, can impact generation and EBITDA . Execution challenges, including occasional delays in transmission infrastructure and land acquisition for wind projects, remain factors to monitor . The competitive bidding environment in India has seen "irrational" competition, leading to lower win ratios for RNW as it adheres to its disciplined return thresholds . The status of approximately 30-35 GW of unsigned PPAs across the industry also presents a degree of uncertainty .

Furthermore, a non-binding offer from a consortium, including major shareholders and Sumant Sinha, to acquire the remaining shares and take the company private at $8 per share is currently under evaluation by a special committee of independent directors. An update on this process is expected by October 31, 2025 . While management highlights strong operating project leverage, some external analyses point to high overall leverage and negative free cash flow as areas for investor scrutiny.

Conclusion

ReNew Energy Global Plc stands as a compelling investment proposition, deeply embedded in India's accelerating clean energy transition. Its strategic evolution into a vertically integrated platform, underscored by its advanced solar manufacturing capabilities and focus on complex, high-return projects, forms a robust investment thesis. The company's consistent operational execution, strong financial performance, and proactive risk mitigation strategies position it favorably to capitalize on India's immense renewable energy potential. While external factors and competitive pressures warrant attention, RNW's technological leadership and disciplined growth trajectory suggest a continued path toward creating long-term shareholder value in the global decarbonization landscape.