ReNew Energy Global plc

Thank you for standing by, and welcome to the Renew Second Quarter Fiscal Year 24 Earnings Report. All participants are in listen-only mode. There will be a presentation, followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Nathan Judge of Investor Relations. Please go ahead.

Yes, thank you, Jason, and good morning, everyone, and thank you for joining us. This morning, we issued a press release announcing results for the fiscal 2024 second quarter ending September 30, 2023. A copy of the press release and the presentation are available in the investor relations section on Renew's website at www.renew.com. With me today are Sumana Sinha, founder, chairman, and CEO, Kailash Vashwani, our newly appointed CFO, and Vishali Nigam Sinha. co-founder and chairperson of sustainability. After the prepared remarks, we will open up the call for questions. Please note 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 remarks, and 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 we furnished in our Form 6K 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 reports. And it's now my pleasure to hand it over to Samant. Samant?

Yeah, thank you, Nathan. Good morning, everyone. I'm glad to have you all in our second quarter of fiscal year, ended on the 4th, on this call. This year has presented new opportunities for us in avenues that align seamlessly with our competitive advantages. The backdrop for Indian renewable energy developers is the best we have ever seen, marked by a significant surge in power demand shortfalls in energy supply, significant increase in auctions for renewable energy, which is the lowest cost electricity supply without subsidy, a softening of solar module prices, and a shift towards complex projects that is best served by wind, of which we are the largest developer in the country. I firmly believe that Renew, with its disciplined approach to identifying the best return opportunities is well positioned to capitalize on the current market. We continue to make progress towards our goals, maintaining capital discipline along the way. We are more confident of achieving our financial guidance set earlier this year and are rating the lower end of our EBITDA guidance by approximately 3%. We now anticipate delivering between INR 62 billion to INR 66 billion in adjusted EBITDA for FY24. We have put in a majority of our wind turbines and solar panels in our largest projects being commissioned this year, which puts us in good stead to deliver on our guidance of between 1.75 and 2.25 gigawatts of projects to be completed by this fiscal year end. We expect the additional capacity should translate to approximately 35% or more per share EBITDA growth next fiscal year. We continue to see consistent flow of auctions as central agencies such as NTPC, SJVM, SECI, NHPC, and some states have announced RE auctions of 65 gigawatts this year, the highest that we have ever seen in the history of our industry. Notably, 18 gigawatts of auctions have already been completed this year, already surpassing the previous year's amount with still about four months plus to go. A higher ratio of complex auctions signals the trend that distribution companies want specific electricity supply profiles which require customized solutions. The complexity and limited development capabilities in India, among other things, have resulted in less participation by competitors. Broadly, we have seen an upward lift to auction tariffs for the past 12 months, and recent auctions indicate that this trend will continue further. We have signed a power purchase agreement, PTA, with GUVNL, which is the Gujarat Distribution Entity, for 400 megawatts of capacity, that we won earlier this year, and have received letters of awards for another 2.9 gigawatts that we have won. As a reminder, we do not include projects with LOAs into our portfolio until we have a contract, a signed PPA, which indicates another step up in our long-term earnings potential as the 3.1 gigawatts of projects won receive PPAs over the next three to six months. Our assets continue to attract interest from investors and strategic partners at favorable valuations. Recently, we concluded the sale of 100 megawatts of solar assets, resulting in a gain. In a little over two years, we have raised about $565 million from asset recycling and year-to-date about $93 million. The ability to recycle capital and deploy it in higher return opportunities remains a significant component of our capital allocation and value creation strategy. This quarter, we reported a profit after tax of US$45 million, one of the highest reported by us till date. This quarter, for the first time in a while, the wind resource was about close to normal. Wind PLS increased to 41.3%, from approximately 33.7% in the corresponding quarter last year, and marks three straight years where we have seen improved wind resource, which may portend for more normal weather going forward. While we remain optimistic about long-term wind PLS returning to normal levels, we are choosing to remain conservative at this time about our weather expectations for the remainder of this year in our guidance. Turning to page 5, in September 2023, we witnessed a record surge in power demand, taking 240 gigawatts during peak hours, as well as a surge of power prices traded on the exchange, reflecting strong overall growth in power demand in the country. We have seen overall power demand consistently rise at 8% over the last several years, and continue to expect sustained growth for the next few years. While the Indian government is ambitious about achieving the 2030 renewable energy targets, with a 50 gigawatt renewable energy annual auction calendar, our position as a market leader in developing wind remains differentiated. With a shift away from vanilla wind and solar auctions, there is a tilt towards round-the-clock and complex auctions. a significant step towards catering to unique power demand profile of distribution companies with wind as a key differentiator. Our experience in developing complex solutions provides us with significant advantage over others who do not yet have in-house wind ETC capability, digital or AI platforms, and strong understanding of the supply chain cycles that enable us in securing returns superior to our peer group. Turning to page 6, while the market opportunity is substantial, our commitment to capital discipline remains unwavering. In-house wind and digital capabilities empower us to seamlessly build, operate, and maintain renewable energy projects, providing us competitive advantages in the market and enabling returns above our competitors and above our cost of capital. Recently, we signed a PPA with at a tariff of 2.71 per kilowatt hour for 400 megawatts of solar and letters of awards, secured letters of awards for most of our 3.1 gigawatts of auctions earlier this year at attractive tariffs. Given the increase of intermittent generation in the country, there is substantial demand for electricity supply that meets more stringent delivery and reliability requirements. More than 60% of the 37.2 GW of auctions yet to be completed this year are complex power solutions. Given our industry-leading wind EPC capability, our scale given the larger size required for complex projects, our ability to source equipment through vertical integration, our superior access to the lowest cost of capital, and our substantial land bank, we have competitive advantages in delivering these complex RE projects quicker, and at a lower cost than anyone else in India. To summarize, this is therefore one of the best backdrops for Indian renewable energy that we have seen in a very, very long while. Turning to page seven, our on-ground progress remains on track as our projects enter final construction phases. Cheaper solar module prices have enabled us to procure modules at almost half the price as compared to the same time last year. We delayed projects in the past because the then capex costs would have resulted in subpar IRRs. As we continue to reiterate, we remain laser-focused on capital discipline and have been rewarded by our patients. We have saved shareholders by our estimate about $100 million in lower capex by pushing out certain projects. We have consistently invested small amounts of capital in complementary businesses to enable even greater competitive advantages of our core renewable energy development business. For example, we spent about 10% of our CAPEX to develop solar manufacturing given the substantial reductions on imports that are being imposed by the central government. This decision has borne fruit in allowing us to procure high IRR projects in recent auctions that others may not have been able to procure supply for. Investment in transmission is another example. There are currently chronic delays across India in completing interconnection hubs that allow new projects to connect to the grid. Rather than leave our large project sitting idle, we decided to invest a small amount of capital, less than 5% of our equity, to build a transmission ETC business. Furthermore, we have recaptured most of this equity through capital recycling that have garnered gains. We successfully commissioned our first transmission project this quarter, which is the connection point for our large peak power project providing 138 circuit kilometers of connectivity. Before I turn it over to our newly appointed CFO, I am really pleased that the board has chosen to promote Kailash to the CFO role. Many of you would have interacted with Kailash previously and know of his experience and extensive knowledge of renewable energy debt markets. Kailash has been with Renew since the beginning, having joined us in 2011 as one of the founding members of the company and has been instrumental in all of our fundraising efforts, both debt and equity. To date, he has helped Renew raise close to $15 billion through various sources, including about $565 million raised through asset recycling. I do consider us lucky that we were able to identify someone internally for this position who has in-depth knowledge about the business as well as a proven track record. With that, I would like to turn it over to Kailash to go over the latest financials.