ReNew Energy plc(US:RNW)2021-11-18 17:56Financial Data and Key Metrics Changes - The company reported a 26% year-on-year increase in revenues for the first half of fiscal 2022, with adjusted EBITDA rising by 28% and cash flow to equity jumping by 84% [26][27]. - The weather-adjusted EBITDA for the first half of FY22 was $470 million, representing about 58% of the full-year forecast of $810 million [27]. Business Line Data and Key Metrics Changes - The company has 7 gigawatts of operational capacity as of the call, up from 5.6 gigawatts at the beginning of the fiscal year, with a target of 8.2 gigawatts by year-end [25][22]. - The company expects to generate over $1.1 billion in annual EBITDA from its 10.3 gigawatt portfolio, nearly double the EBITDA reported last year [14][36]. Market Data and Key Metrics Changes - The total addressable market for renewable energy generation in India is estimated to be between $200 billion and $270 billion, with significant opportunities in the bid market and M&A [15][16]. - The company anticipates around 8 to 10 gigawatts of auctions scheduled over the next quarter, with a large M&A opportunity of 30 to 50 gigawatts in the coming time [16][17]. Company Strategy and Development Direction - The company aims to achieve 18 gigawatts of operational capacity by the end of FY25 and is fully funded for this target [17][37]. - The company is focused on maintaining a threshold requirement of 16% to 20% equity IRRs for its investments, with a commitment to only invest when expected returns exceed the cost of capital [18][19]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the FY22 adjusted EBITDA guidance of $810 million despite supply chain challenges and COVID-19 impacts [35]. - The company is actively managing receivables and expects improvements in days sales outstanding (DSO) due to various initiatives and government support [31][33]. Other Important Information - The company received recognition from Fortune magazine as one of the top 10 global companies that will change the world and was awarded the lighthouse award by the World Economic Forum for its proprietary IR technology [23]. - The company has about $1 billion in cash and cash equivalents, with net debt standing at approximately $4.4 billion [33]. Q&A Session Summary Question: Corporate PPA Uptake - Management noted that while power supply disruptions were short-term, there is strong commercial rationale for corporate customers to buy power directly from the company, with about 100 megawatts of PPAs already signed [41][45]. Question: Government Manufacturing Capacity Incentives - The government has not finalized the subsidy quantum for manufacturing capacity, but the company is moving forward with a 2-gigawatt module line regardless of the outcome [46][49]. Question: Weather Impact on Wind and Solar Performance - Wind performance was about 5% lower than expected, while solar generation was approximately 0.1% off from expectations [55]. Question: Cost Inflation Impact on IRR - For FY22, the company has locked in most capital expenditures, and while wind project costs have increased by 7% to 8%, overall equity IRR remains largely unaffected due to lower financing costs [56][62]. Question: PPA Signing Timeline - Management expects to see progress on signing PPAs soon, with most projects likely to be completed by the end of FY23, although some may spill over into FY24 [63]. Question: Receivables and Cash Flow Impact - Management indicated that elevated receivables are not expected to materially impact cash flow or capital expenditures, as the company is well-capitalized [72][73].