ReNew Energy (RNW) Q1 2027 Earnings Call Transcript

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DATE

Tuesday, Aug. 18, 2026 at 8:00 a.m. ET

CALL PARTICIPANTS

• Investor Relations - Anunay Shahi
• Founder, Chairman and Chief Executive Officer - Sumant Sinha
• Chief Financial Officer - Kailash Vaswani
• Co-Founder and Chairperson, Sustainability - Vaishali Nigam Sinha

TAKEAWAYS

• Total Income -- INR 47.9 billion ($506 million), driven by higher operational capacity and increased external sales from solar manufacturing.
• Adjusted EBITDA -- INR 30.4 billion ($321 million), representing a 12% increase from the prior year.
• Net Profit -- INR 6 billion ($63 million), up 16% year over year reflecting operating revenue growth and gains from asset recycling.
• Basic EPS -- INR 16.45 ($0.17), compared to INR 13.95 in the first quarter of fiscal 2026.
• Operating Capacity -- 13.5 gigawatts, representing 26% year-over-year growth when adjusted for divested assets.
• Total Portfolio -- 20.5 gigawatts, which includes 1.7 gigawatts of battery energy storage systems (BESS).
• External Manufacturing Revenue -- INR 16.8 billion ($177 million), generated from the sale of solar modules and cells to third-party customers.
• Manufacturing EBITDA Margin -- 34%, reflecting a contraction from 40% in the previous year due to increased market supply and pricing trends.
• Electricity Sold -- 7,377 million kWh, an 8% increase driven by the expansion of the operational wind and solar fleets.
• Solar Plant Load Factor (PLF) -- 22.4%, down from 24.6% in the prior-year period due to grid curtailment in Rajasthan and adverse weather patterns.
• Wind Plant Load Factor (PLF) -- 32.0%, compared to 32.8% in the first quarter of fiscal 2026.
• Cash Flow to Equity (CFe) -- INR 12.8 billion ($136 million), a decrease from INR 15.3 billion due to higher interest payments and scheduled loan repayments.
• Net Debt -- INR 697.1 billion ($7.4 billion), supporting the company's long-term capital investments in renewable energy infrastructure.
• Net Debt to Adjusted EBITDA -- 5.7x, as management maintains a focus on reducing leverage through capital recycling.
• Days Sales Outstanding (DSO) -- 54 days as of July 31, 2026, improving from 71 days at the end of June following a receipt from Andhra Pradesh.
• Asset Sale Proceeds -- $191 million, expected from the sale of 1.05 gigawatts of solar projects to Purvah Green Power.
• C&I Portfolio -- 2.9 gigawatts, with technology companies such as Amazon, Microsoft, and Google accounting for approximately half of the contracted offtake.
• FY27 Adjusted EBITDA Guidance -- INR 103 billion to INR 109 billion, assuming normal weather and resource availability.
• FY27 CFe Guidance -- INR 18 billion to INR 22 billion, based on the planned construction of 1.6 to 2.4 gigawatts.
• Manufacturing EBITDA Guidance -- INR 10 billion to INR 12 billion, reflecting anticipated margin normalization in the second half of the year.
• Scope 1 and 2 Emissions -- 25.6% reduction, progressing toward the company's fiscal 2030 and 2040 sustainability commitments.

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RISKS

• Vaswani stated, "grid build-out continues to be a drag on the entire industry with certain projects, including ours, particularly in the state of Rajasthan, having temporary connectivity facing curtailment challenges," which impacted solar plant load factors during the quarter.
• Vaswani noted that manufacturing margins were contracting, decreasing from 40% to 34% year over year as additional production capacity comes online globally.

SUMMARY

Management of ReNew Energy Global Plc (NASDAQ:RNW) announced a binding transaction agreement for a proposed take-private acquisition by a consortium led by CPPIB and the company's founder. The company reported expansion in its operating portfolio and manufacturing revenue while navigating grid connectivity and curtailment challenges in the Rajasthan region. Strategic focus remains on capital recycling, evidenced by the recently signed sale of over 1 gigawatt of solar assets to Purvah Green Power. The company continues to target capacity additions for data centers and hyperscalers while nearing completion of its 4-gigawatt TOPCon cell manufacturing facility.

• The proposed take-private offer is set at $7.02 per share in cash, with Kailash Vaswani noting, "The proposed acquisition is expected to be effected through a U.K. scheme of arrangement and will be voted on by the non-consortium shareholders."
• The company expects its 4-gigawatt TOPCon cell facility to be fully operational by the end of the current fiscal year, with the first cells anticipated by December 2026.
• Management reported that the external order book for the manufacturing business stands at approximately 1.1 gigawatts, while 40% to 60% of production is utilized for the company's internal IPP projects.
• Transmission line build-outs in Rajasthan are expected to resolve current solar curtailment issues over the next several months.
• LeapFrog Investments recently committed $95 million of equity for an 11.3% stake in the company's C&I business, supporting growth in the commercial and industrial segment.

INDUSTRY GLOSSARY

• BESS: Battery Energy Storage System.
• TOPCon: Tunnel Oxide Passivated Contact, a high-efficiency solar cell technology.
• DSO: Days Sales Outstanding, representing the average time taken to collect payments.
• PLF: Plant Load Factor, the ratio of actual energy produced to the maximum possible output.
• C&I: Commercial and Industrial, referring to corporate customers directly purchasing renewable power.
• IPP: Independent Power Producer.
• ALMM: Approved List of Models and Manufacturers, a regulatory framework for solar equipment in India.
• DISCOM: Distribution Company, typically state-owned entities that purchase power from producers.

Full Conference Call Transcript

Operator: Thank you for standing by, and welcome to the ReNew -- our ReNew's 1Q FY '27 Earnings Report. [Operator Instructions] I would now like to hand the conference over to Anunay Shahi. Thank you, and over to you.

Anunay Shahi: Thank you. Good morning, everyone, and thank you for joining us today. We have put out a press release announcing our results for the first quarter of fiscal year 2027. A copy of the press release and the earnings presentation are available in the IR section of ReNew's website at www.renew.com. With me today are Sumant Sinha, our Founder, Chairman and CEO; Kailash Vaswani, our CFO; and Vaishali Nigam Sinha, Co-Founder and Chairperson, Sustainability. After the prepared remarks, which we expect will take 20 to 25 minutes, we will open the call for questions. Please note that 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 our remarks. There are risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements. Therefore, we encourage you to review the press release 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 report. With that, it is now my pleasure to hand it over to our Founder, Chairman and CEO, Sumant. Over to you, Sumant.

Sumant Sinha: Yes. Thank you, Anunay. Good morning, good afternoon and good evening, everybody, and I'm glad to have you all on our earnings call for the first quarter of fiscal year ended March 2027. After a terrific fiscal 2026, where we reported our highest ever EBITDA and PAT, we continue to deliver on our promise of profitable growth in spite of the uncertain global macroeconomic situation and grid-related challenges in India. We also continue to be disciplined in our approach towards judicious use of capital and allocating capital only towards the highest return opportunities. Turning to highlights for this quarter. Our focus towards executing at scale continues as we delivered a 26% growth in our operating portfolio year-over-year.

We have commissioned over 1 gigawatt to date in the current fiscal, which includes over 600 megawatts in Q1 itself. Our overall committed portfolio now stands at 20.5 gigawatts and includes 1.7 gigawatts of BESS and our total pipeline is at approximately 27 gigawatts. We also continue to execute our capital recycling plans. In June 2026, we closed the sale of a 100-megawatt Tamil Nadu solar asset and received the proceeds. In August 2026, we also signed definitive documents for the sale of about 1 gigawatt of assets, which is expected to generate $190 million of cash flow to equity on closing.

These transactions underline the quality of our asset base and our ability to continuously find buyers at attractive valuations. Additionally, we have 6.5 gigawatts of module and 2.5 gigawatt of cell capacity that is currently operational and a 4-gigawatt cell facility of TOPCon that is expected to be fully operational by the end of the current fiscal year. We have also filed our Form 20-F for FY '26 and published our third integrated report with the theme beyond boundaries, decarbonizing value chains to deliver climate value at scale, in line with international reporting standards. Coming to our financial performance.

In this quarter, we have delivered adjusted EBITDA growth of around 12% with INR 30.4 billion adjusted EBITDA, including INR 5.7 billion contribution from our manufacturing business. Our profit after tax increased by 16% year-over-year with INR 6 billion for Q1 of fiscal 2027, along with INR 12.8 billion in CFE. Our DSO continues to reduce as we expand our portfolio and legacy issues continue to get resolved. Subsequent to the end of the quarter, we received INR 57 billion from the Andhra Pradesh DISCOM, taking our DSOs as of July end to 54 days, 17 days lower than the Q1 FY '27 DSO number of 71 days.

Let me now hand over to Kailash to take us through the next 7 please.

Kailash Vaswani: Thank you, Sumant. Before turning to our operating performance, I would like to briefly address the take-private transaction announced on August 11, 2026. ReNew entered into a binding transaction agreement with the consortium comprising of CPPIB and Sumant Sinha for the proposed take private of ReNew. The proposed acquisition is expected to be effected through a U.K. scheme of arrangement and will be voted on by the non-consortium shareholders. Non-consortium shareholders may either receive cash of $7.02 per share by transferring their shares to CPPIB Investments or its designated affiliates or subject to certain conditions, elect to roll over and remain shareholders.

The special committee comprising of independent directors, having received Rothschild & Co.'s opinion that the cash offer is fair from a financial point of view to the non-consortium shareholders, considers the cash offer and transaction agreement fair and reasonable and intends to unanimously recommend that shareholders vote in favor of the scheme. Further details on the scheme's timing will follow in due course. Turning back to the presentation on Slide 13 on the industry backdrop. The electricity demand in Greece continues to support renewable energy growth. Renewables contributed 86% of overall power capacity addition in Q1 FY '27 with 14 gigawatt of renewable energy capacity added. This included 12 gigawatt of solar and 1 gigawatt of wind and hydro each.

Coming to the demand side, peak demand has already touched around 271 gigawatt in FY '27. Overall, electricity demand in July 2026 was up 11% year-on-year and was up 9% year-on-year for April to June period. Demand is also increasing more in nonsolar hours, which supports higher battery installations. Installed renewable energy capacity, including large hydro stood at 289 gigawatt as of June 30, '26. This includes 162 gigawatt of solar and 57 gigawatt of wind. We believe this reinforces the continued structural growth of renewable energy in India. Additionally, Q1 also saw strong industrial production growth numbers, fueled by higher demand in all sectors of the industry.

In fact, the overall index of industrial production grew by about 7.3% in June. Additionally, the rupee appreciated slightly versus the U.S. dollar as the government's foreign currency nonresident scheme, which is the FCNR scheme, produced over $52 billion of fresh inflows. Having said all of the above, grid build-out continues to be a drag on the entire industry with certain projects, including ours, particularly in the state of Rajasthan, having temporary connectivity facing curtailment challenges. We are hopeful that coupled with build-out of certain lines in Rajasthan, some central government support, these issues will get resolved over the next few months. Turning to business updates on Slide 14. On project execution and our delivery remains derisked and on track.

We have already delivered over 1 gigawatt of commissioned megawatts during the year and are on track to deliver the projects that are due to be commissioned during the year. For solar, in addition to the megawatts commissioned so far, more than 250 megawatt has been erected and is in final stages of commissioning. More than 50% of the modules required for the balance execution in rest of FY '27 are already at site with the balance secured through in-house production. Silver pricing exposure is also hedged for fiscal '27 for BESS, 100% of the pricing is locked in at attractive rates and about 25% has already reached project sites.

For wind, 100% of the wind turbines required for the year are locked in within budgeted levels. Land is also largely tied up or acquired for the execution requirements of the next 12 months. Turning to updates from our C&I business on Slide 15. We are very excited by and continue to expand our C&I footprint across India. Our C&I portfolio currently stands at 2.9 gigawatts, including 2.6 gigawatts of commissioned capacity over 5 states, and we commissioned 330 megawatt year-to-date in the C&I segment. We are also well placed to participate in new business opportunities such as supply to data centers. Our business is concentrated on larger projects, and we have excellent relationship with technology companies and hyperscalers.

For example, Amazon, Microsoft and Google collectively account for around half of the contracted offtake in our C&I business. As you may also recall, a LeapFrog-led consortium has invested $95 million of equity in our C&I business for 11.3% stake. Turning to our manufacturing business on Slide 16. In manufacturing, we have one of the highest integrated capacities in India. Our manufacturing business has continued its profitable journey in the current fiscal year as well with an external order book standing at approximately 1.1 gigawatt. Do note that we sell around 40% to 60% to our IPP business at an arm's length pricing, which doesn't get reflected in our overall financials because we consolidate them.

In Q1 FY '27, revenue from external sales of modules and cells was INR 16.4 billion and the adjusted EBITDA from external sales was INR 5.7 billion, with the adjusted EBITDA margin standing at almost 34%. We expect that there may be some normalization in the latter half of the year as additional cell capacity comes online. On the 4-gigawatt TOPCon cell plant, Civil and PSV works are in final stages. ATP and clean room work are progressing well. Printing lines are installed and the first cell is expected to be produced by the end of the current calendar year.

We are also progressing well on the Indian wafer plant in the state of Andhra Pradesh that's expected to be commissioned in early calendar '28. Turning to Page 18. Our Q1 results reflect strong operating execution, continued growth in earnings and disciplined capital allocation. As of June 30, '26, our total portfolio was approximately 20.5 gigawatts, including 1.7 gigawatt of BESS. Operating capacity stood at 13.5 gigawatt, which is up 26% year-on-year adjusted for asset sales and 22% on a net basis. This comprises 5.6 gigawatt of wind, 7.8 gigawatts of solar, 99 megawatt of hydro and 100 megawatt or 250 megawatt hour of BESS.

We also had 6.9 gigawatt of committed capacity, including 1.1 gigawatt of wind, 4.2 gigawatts of solar and 1.6 gigawatt of BESS. During the trailing 12 months, we have commissioned approximately 2.8 gigawatts comprising more than 2 gigawatts of solar, 0.6 gigawatt of wind and 25 megawatts of BESS. In FY '27, year-to-date, we have commissioned 1 gigawatt of capacity between wind and solar. On consolidated operating performance, revenue was up 14% year-on-year. Adjusted EBITDA was up 12% year-on-year and profit after tax was up 16% year-on-year. For Q1 FY '27, total income was INR 47.9 billion, revenue was INR 44.6 billion and EBITDA was INR 30.4 billion, and profit before tax was almost around INR 8.3 billion.

Total adjusted income was INR 46 billion, comprising of INR 29 billion from IPP business and INR 16.6 billion from external manufacturing sales. Adjusted EBITDA was INR 30 billion, including INR 24.7 billion from the IPP business and INR 5.7 billion from external manufacturing sales. Adjusted EBITDA margins for the IPP business were 86%, for manufacturing were 34%, and the margin was 66.1% on a consolidated basis. Turning to Page 19. We remain disciplined in capital allocation with net debt to trailing 12 months adjusted EBITDA for operational projects at 5.7x. The leverage level for projects operational for more than a year, that's with full year EBITDA contribution is further lower.

We continue to be committed to reducing our overall leverage. And to this end, we have been executing consistently on capital recycling with a portion of such proceeds expected to reduce our overall leverage. For example, we recently signed definitive agreements to sell more than 1 gigawatt of capacity, and this is expected to result in $190 million of cash inflows on closing, including some contingent amounts related to change in law proceeds. On working capital, IPP, the days sales outstanding were at 71 days as of June 30, '26, which was a 3-year improvement year-on-year and a 12-year improvement over 2 years.

Further, subsequent to the end of the quarter, as Sumant mentioned earlier, we received INR 5.7 billion from Andhra Pradesh in July 2026. As a result of this, the end of July, the DSO improved to around 54 days. Manufacturing DSO stands at around 5 days. Our balance sheet remains robust and well supported. Cash and cash equivalents, including bank balances and investments and short-term investments stood at INR 89 billion as of 30 June 2026. Gross debt was INR 786 billion and net debt was around INR 671 billion as of the same date. I will now hand over the call to Vaishali for ESG and sustainability updates.

Vaishali Sinha: Thanks, Kailash. Now turning to Slide 21. As ReNew continues to achieve new milestones in growth and impact, we take immense pride in the fact that sustainability remains at the core of our business and value creation model. With this, I am pleased to present to you our third annual integrated report for fiscal year 2025, '26 called Beyond Boundaries: Decarbonization Value Chains to Deliver Climate Value at Scale. Reflecting the evolution of our sustainability journey and leadership in the energy transition space, this report expands our focus beyond our operations to the broader value chain. It demonstrates how ReNew is scaling climate value through transparency, accountability and collective action.

Let me begin with some key highlights from our environmental performance. We reduced Scope 1 and 2 GHG emissions by 25.6% from a baseline, achieved an 84% renewable electricity mix and maintained carbon neutrality for Scope 1 and 2 emissions for the sixth consecutive year. We continue to create meaningful value for communities, employees and our partners. Our socioeconomic programs have positively impacted more than 1.95 million lives so far. Women now represent 18% of our workforce and 15% of STEM roles. We completed ESG risk assessments from for 100% of our critical suppliers for the third consecutive year and expanded the scope to include Tier 2 suppliers as well.

Further strengthening our sustainable supply chain, we achieved 100% local sourcing of steel for wind tower plates. Turning to governance. Our Board maintained 55% independent representation. We further strengthened our enterprise risk management framework through an independent assessment and continued embedding accountability by establishing 27 organization-wide and 8 manufacturing-specific ESG targets. Now moving to Slide 22. Our third integrated report reflects another year of steady progress with several enhancements that strengthen transparency and align more closely with global standards. We transitioned to a hybrid reporting structure, combining pillars and capitals to deliver a more integrated sustainability narrative aligned with leading global standards.

We completed a refresh of our double materiality assessment, reprioritizing material topics to reflect evolving stakeholder and business priorities. We published our inaugural ESG data book, creating a consolidated and more transparent view of ESG performance across business units. We expanded our emissions accountability by including downstream Scope 3 emissions, reflecting the growth of our solar module and cell manufacturing operations. Together, these enhancements reflect a commitment to continuous improvement, transparency and reporting excellence. Now moving to Slide 23. Our ESG targets continue to translate ambition into measurable outcomes, keeping us firmly on track towards our 2030 and 2040 commitments. Let me start with environment where our focus on climate action continues to deliver tangible results.

We achieved a 25.6% reduction in Scope 1 and 2 emissions versus fiscal year '22 baseline, exceeding our target and advancing our SBTi aligned net zero pathways. We delivered over 617,000 (sic) [ 617,167 ] cubic meters of water savings in fiscal year '25, '26 with over 5,000 cubic meters of water saved through robotic cleaning. Our commitment to people and communities remains unwavering as we continue to invest in talent, inclusion and sustainable community development. Through Project Surya, which we've talked about earlier, we continue to build green skills with 166 women trained as technicians in quarter 1 alone and additional cohorts progressing through advanced training programs.

Our commitment to excellence continues to be reflected in strong external recognition and performance. We closed the year with industry-leading scores across major ESG ratings and indices, including an S&P Global CSA score of 84, a CDP A list status for climate change and supply engagement, a AAA for MSCI and a Sustainalytics low-risk score, which is a favorable score of 11.6. While we remain proud of these achievements, we continue to recognize that the journey is important. As we look ahead, we remain focused on building on this momentum, advancing our key commitments and continuing to embed sustainability as the core of our business. I will now turn it back to Kailash to take us through the guidance.

Kailash Vaswani: Thank you, Vaishali. Turning to guidance on Page 24. We reiterate FY '27 consolidated adjusted EBITDA guidance of INR 103 billion to INR 109 billion. This includes INR 10 billion to INR 12 billion from manufacturing and INR 1 billion to INR 2 billion from asset sales. We continue to expect to construct between 1.6 to 2.4 gigawatt during FY '27 and generate cash flow to equity of INR 18 billion to INR 22 billion.

For our total committed RE portfolio, which has marginally increased in the current quarter, we expect run rate adjusted EBITDA of INR 134 billion to INR 140 billion and run rate cash flow to equity of INR 32 billion to INR 36 billion assuming normal weather patterns and excluding contribution from our manufacturing business for a fully constructed RE portfolio of around 20.5 gigawatts, which includes 1.7 gigawatt of BESS. Please note that this includes the 1 gigawatt of assets sold, which we have signed definitive agreements for, but closing has not yet happened. So once the closing happens, then we will adjust these numbers for that. With that, we will be happy to take any questions.

Operator: [Operator Instructions] Your first question comes from Justin Clare with ROTH Capital Partners.

Justin Clare: I wanted to start out just on the take-private transaction. Wondering if you could give us a sense for the expected time line from here to completion of the take private. And then just what do you see as the key remaining milestones? And if you could share which approvals or conditions might present the most meaningful uncertainty in terms of the timing?

Kailash Vaswani: Thanks, Justin, for your question. As per the transaction agreement, we would anticipate the scheme becoming effective in Q1 2027. The scheme document will be published as soon as reasonably practicable after we've completed the SEC review process and within 10 business days following the date on which the court grants the order for convening of the court meeting. Scheme documents are typically published 4 weeks ahead of the court meeting date. And then there are some regulatory approvals, which will be sought in parallel with the actions above, and that would also take around 3 to 4 months to obtain.

So the long stop date for the transaction is the completion, which is 95 days of the publication of the scheme circular or 31st March 2027. We must stress that this is not a guidance as we are not able to give the exact time lines for the regulatory, but this is broadly the indicative range of what the process from here on is likely to be.

Justin Clare: Got it. Okay. That's helpful. And then maybe just shifting over to the performance in the quarter. The solar PLF in your fiscal Q1 declined, I think it was 220 basis points year-over-year. Just wondering how much of that decline may have been attributable to just the solar resource during the quarter versus any grid curtailment? And then if curtailment was a factor, is it an issue that might persist into Q2 or any additional quarters here?

Kailash Vaswani: So we have, Justin, been facing curtailment on the solar side. So that has definitely contributed a reasonable amount of -- to the decline in the PLF. And this is again something that is an impact that we are seeing, but we are also trying to see if through advocacy, we can get compensated for the nonavailability of transmission network. So that is something that we will pursue. And then obviously, then weather-related, there's been some additional impact also that we saw given that there were more cloudy days compared to last year, and that also contributed. I would say the split between the 2 would be maybe half and half between curtailment and weather patterns.

Justin Clare: Got it. Okay. And then just one more on the guidance here. So manufacturing contribution was pretty strong in Q1 here, so INR 5.65 billion compared to the guidance for the full year for manufacturing of INR 10 billion to INR 12 billion. So it implies a meaningful step down in the contribution in the balance of the year on a quarterly basis. Wondering if that's just conservative or are you anticipating a meaningful step down in the profitability there?

Kailash Vaswani: I mean we're not expecting a meaningful step down, but margins have been coming down a little bit. And there were extensions also which were granted as far as implementing ALMM on sales was concerned, which happened after the completion of quarter 1. So there is a little bit of uncertainty in the market at this point in time with respect to margins and given that there's additional production capacity also, which is coming online. So as a combination of these factors, we've decided to run the side of caution and not really change the guidance numbers.

And obviously, as we see a stronger performance continuing into next quarter, then we could look to take a relook at the numbers again when we announce our Q2 results. As far as margins are concerned, so last year, Q1 was at 40%, this year at 34%. So there has been some contraction, which you have seen already in the margins playing out. And then as more supply comes in, that is likely to continue a little bit also. So we will have to see how the trends play out in the backdrop of this ALMM for sales extension till 31st December.

Operator: The next question comes from Puneet Gulati with HSBC.

Puneet Gulati: Congrats on performance. My first question is on your comment on compensation with respect to curtailment. Is there a scope for confusion whether you should get compensated or not? I thought it was a straightforward cost down versus the G&A. If you can clarify a bit here.

Kailash Vaswani: Yes, I'm happy to.

Sumant Sinha: Sorry, Kailash, do you want to take that?

Kailash Vaswani: No, no, go ahead.

Sumant Sinha: No, I was only saying, Puneet, that for [ Transdown ] curtailment, we get compensated, as you know. For any other TG&A curtailment, there is no specific mechanism to get compensated. Having said that, we are having discussions with MoP right now about whether something can be made to work. Those discussions are ongoing. So they haven't come to any form of conclusion right now. So one can't say what form, if any, those -- that compensation will take. We are certainly trying because this curtailment is happening through no fault of ours. And that's the point that we made and acknowledge and it's acknowledged by the government as well.

But we'll have to wait and see where those discussions end up at. I don't think of this [ full compensation ] how much we can get.

Puneet Gulati: Understood. But there's no confusion [Technical Difficulty].

Sumant Sinha: No, there is no confusion. The charge-down part is also a much smaller number. It's a much smaller number compared to the PG&A curtailment that is happening.

Puneet Gulati: Understood. Secondly, what are your thoughts on the BESS side? How much is installed capacity today? And is there a plan to build something on the merchant side?

Sumant Sinha: We have maybe a couple of hundred megawatt hours right now that are commissioned. Building long-term merchant BESS is a little bit difficult because you don't know how things are going to evolve in the market over a 5- to 7-year time period, which is the minimum required to figure out what the return should be.

But what we are going to be doing is that in some of the projects that we are doing, to the extent that we -- those projects are getting commissioned, let's say, 2 years or 3 years from now, some of those BESS projects will commission earlier, run them as merchant plants for a shorter period of time because we know that in the near term, perhaps in the next 1 to 2 years, there is likely to be a reasonable arbitrage between daytime and leasing prices. And so we'll hope to create that value over a 1- to 2-year period and then look to drop those BESS projects into existing PPAs that we have.

As those get commissioned, then we'll move these BESS projects into those.

Puneet Gulati: Is there a target for this commissioning for fiscal '27 or '28?

Sumant Sinha: We haven't specified a target. This year, it's a little looking unlikely because, obviously, this year, we haven't -- we are not at a point where we'll be able to commission anything for this year. But certainly, for -- by next year, we are hoping to commission some amount. But once those plans get finalized, we'll let you guys know.

Puneet Gulati: Understood. That's very helpful. And lastly, if I may, on your recent sale of 1,000 megawatt assets to [ Purva ] , can you talk about what sort of EBITDA multiple you managed to get from that?

Kailash Vaswani: So Puneet, on that, we are -- once the closing happens, we will agree with the buyer what disclosure we would like to jointly make and then speak about it. Right now, we are under NDA.

Puneet Gulati: Understood. And just one more -- there was also a chatter about you trying to sell hydro plant. Is that something one should think about as a potential saleable asset as well?

Kailash Vaswani: So again, as part of our asset recycling, we do evaluate sales of various assets. So it could be part of such discussions that you may have heard about.

Operator: [Operator Instructions] There are no further questions at this time. That does conclude our conference for today. Thank you for participating, and you may now disconnect.

Vaishali Sinha: Thank you.

Kailash Vaswani: Thank you.

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