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01/11 08:11
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed outlook: strong commissioning performance and positive project updates are offset by declining margins and uncertainties in PPA conversions. The Q&A reveals potential risks in project timelines, transmission issues, and curtailment impacts. While optimistic guidance exists, concerns about margin normalization and refinancing add caution. With a market cap of approximately $2.36 billion, the stock is likely to experience neutral movement, reflecting balanced positive and negative factors.
Adjusted EBITDA INR 53.5 billion, a 24% growth year-on-year for the first half of the fiscal year ended March 31, 2026. The growth is attributed to strong financial performance and contributions from the manufacturing business.
Manufacturing Business Adjusted EBITDA INR 3.3 billion for the quarter, adding up to INR 8.6 billion for the first 6 months of fiscal year 2026. The contribution is due to high utilization and efficiency levels in production, with margins slightly higher due to cost savings and procurements ahead of time.
Revenue Increased by over 50% for H1 of this fiscal compared to last year. The increase is due to the rise in megawatts and a meaningful contribution from third-party sales in the manufacturing business.
Leverage Reduced from 8.6 in September '24 to 7 in September '25. The reduction is due to asset recycling, cost optimization, and reduction in corporate debt.
Solar and Wind Capacity Commissioned Over 1.2 gigawatts commissioned year-to-date, split into approximately 750 megawatts of solar capacity and nearly 500 megawatts of wind capacity. This represents a 22% increase in operating capacity after adjusting for the 600 megawatts sold during the trailing 12 months.
Renewable energy capacity: Commissioned over 2.1 gigawatts since October last year, marking a 22% growth in portfolio after asset sales.
Manufacturing business: Operational capacity of 6.4 gigawatts of modules and 2.5 gigawatts of cells, producing over 2 gigawatts of modules and 900 megawatts of cells in H1 FY '26.
New facility expansion: Construction of a new 4-gigawatt TOPCon cell facility is on track with land acquisition, engineering, and civil works underway.
PPA agreements: Signed PPAs for 3.8 gigawatts of installed renewable energy capacity over the past 4 quarters.
Third-party sales: Manufacturing business has third-party orders for 650 megawatts this fiscal, with 1.5 gigawatts already delivered.
Financial performance: Adjusted EBITDA of INR 53.5 billion for H1 FY '26, a 24% year-on-year growth. Revised manufacturing EBITDA guidance to INR 10-12 billion.
Leverage metrics: Headline leverage reduced from 8.6 to 7 year-on-year, with operational asset leverage below 6x threshold.
Policy impact: Reduction in GST on renewable energy items from 12% to 5% by the Indian government.
ESG initiatives: Achieved an S&P Global CSA score of 83, highest for an Indian IPP, and recognized in the Fortune Global Change the World list for the third time.
Global macroeconomic and trade-related volatility: The company acknowledges ongoing global macroeconomic and trade-related volatility, which could impact its operations and financial performance.
Extended monsoon and climatic emissions in India: Unusual climatic conditions, including extended monsoons, have led to muted power demand growth and lower solar PLFs, negatively affecting operational performance.
Subdued PLFs due to lower irradiation: Lower irradiation from extended monsoons resulted in a net negative impact of INR 1.7 billion for the quarter compared to last year.
Lull in the bidding environment: A cyclical lull in the bidding environment for renewable energy projects could impact the company's ability to secure new projects in the short term.
Leverage and debt levels: Although leverage metrics have improved, the company still faces challenges in reducing its consolidated leverage ratio, which remains a focus area.
Dependency on weather conditions: The company's financial performance and project execution are subject to weather conditions, as highlighted by the impact of extended monsoons on solar PLFs.
Cost normalization in manufacturing: Margins in the manufacturing business may normalize due to cost savings and procurement advantages that are not sustainable in the long term.
Regulatory and policy risks: While the reduction in GST rates is positive, the company remains exposed to potential regulatory and policy changes that could impact its operations.
Economic uncertainties: Despite India's relatively stable economic conditions, global economic uncertainties could indirectly affect the company's performance.
FY '26 Megawatt Guidance: Reiterated guidance to complete construction of 1.6 to 2.4 gigawatts of capacity in fiscal 2026.
Adjusted EBITDA Guidance: Reaffirmed fiscal year 2026 adjusted EBITDA guidance of INR 87 billion to INR 93 billion. Manufacturing business guidance revised upwards to INR 10 billion to INR 12 billion.
Manufacturing Expansion: Construction of a new 4-gigawatt TOPCon cell facility is on track with land acquisition, engineering, and machinery orders completed, and civil works underway.
Cash Flow to Equity: Expected to generate cash flow to equity of INR 14 billion to INR 17 billion for fiscal year 2026.
Market Trends and Policy: Expectations of rate cuts by the Reserve Bank of India, which could lower future borrowing costs. Reduction in GST rates on renewable energy items from 12% to 5% to enhance affordability.
The selected topic was not discussed during the call.
The earnings call presents a mixed picture: positive cash position and AMG revenue growth, but challenges in IMG revenue and market stagnation. Q&A reveals management's cautious approach to growth and AI acquisitions, with unclear details on restructuring savings. The focus on stock buybacks and acquisitions, alongside a slight dividend increase, suggests stability rather than growth. Market cap indicates moderate sensitivity, leading to a neutral prediction.
The earnings call presents a mixed outlook: strong commissioning performance and positive project updates are offset by declining margins and uncertainties in PPA conversions. The Q&A reveals potential risks in project timelines, transmission issues, and curtailment impacts. While optimistic guidance exists, concerns about margin normalization and refinancing add caution. With a market cap of approximately $2.36 billion, the stock is likely to experience neutral movement, reflecting balanced positive and negative factors.
The earnings call summary reflects a mix of positive financial performance, with a 43% YoY growth in adjusted EBITDA and improved margins, but also highlights risks such as regulatory hurdles and strategic execution challenges. The Q&A section reveals concerns about competition, land acquisition, and management's unclear responses on sales projections. While strong financials and optimistic guidance are present, uncertainties and strategic risks balance the sentiment, leading to a neutral prediction for stock price movement.
The earnings call reveals strong financial performance with a 32% increase in adjusted EBITDA and significant equity funding for expansion. The Q&A section suggests cautious optimism, with management addressing financing strategies and market expansion. Shareholder returns are enhanced through capital recycling. While some concerns exist, such as supply chain risks and leverage, the overall sentiment is positive due to robust financial health, strategic growth plans, and improved margins. Given the company's market cap, the expected stock price movement is likely positive (2% to 8%).
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