ReNew Energy plc(US:RNW)2023-11-20 15:50Financial Data and Key Metrics Changes - The company reported a profit after tax of US$45 million for the quarter, marking one of the highest profits to date [6][14]. - Adjusted EBITDA for Q2 FY '24 was reported at US$256 million, attributed to additional revenue from newly commissioned projects and improved wind PLFs, despite higher operating costs [15][14]. - The company raised the lower end of its adjusted EBITDA guidance for FY '24 by approximately 3%, now expecting between INR 62 billion to INR 66 billion [2][22]. Business Line Data and Key Metrics Changes - Wind PLF increased to 41.3% from approximately 33.7% in the same quarter last year, indicating improved wind resource conditions [6][14]. - The company successfully commissioned its first transmission project, enhancing connectivity for its large peak power project [9]. Market Data and Key Metrics Changes - The company noted a record surge in power demand in September 2023, reaching 240 gigawatts during peak hours, reflecting an overall growth in power demand at 8% annually [148]. - There has been a significant increase in renewable energy auctions, with 18 gigawatts completed this year, surpassing the previous year's total [147]. Company Strategy and Development Direction - The company is focused on maintaining capital discipline while seeking consistent auction flows, with central agencies announcing a record 65 gigawatts of RE auctions this year [5][30]. - The company is investing in transmission to mitigate delays in project connectivity, with plans to build a transmission EPC business [34]. - The strategy includes asset recycling to optimize the build process and enhance returns on invested capital [13]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial guidance and highlighted the favorable backdrop for Indian renewable energy developers, including rising power demand and decreasing solar module prices [30]. - The company remains cautiously optimistic about long-term wind PLFs returning to normal levels, while acknowledging the need for conservative weather expectations for the remainder of the year [6][14]. Other Important Information - The company has generated clean electricity sufficient to power nearly 5 million Indian households and has avoided 14 million tons of carbon emissions [43][19]. - The company has a cash balance of approximately US$985 million, with net debt on operating assets at US$4.7 billion [159]. Q&A Session Summary Question: What is the outlook for wind PLF? - Management indicated that the Q2 PLF was marginally higher than normal, but overall, the first half was lower than expected [47][59]. Question: Update on the acquisition announced previously? - The acquisition faced delays due to regulatory approvals, leading the company to allocate capital towards organic growth instead [47][48]. Question: Progress on asset recycling? - The company has consummated transactions totaling approximately $93 million and is working on additional sales [68]. Question: Are there any bottlenecks expected in renewable project capacity? - Management confirmed that transmission is not currently a bottleneck, as the government is rapidly building transmission capacity [75][107]. Question: Will the company consider balance sheet financing in the future? - Management stated that they will continue with project financing rather than shifting to balance sheet financing, as it remains the preferred model in India [120].