Why did RNW's Q3 2025 earnings fall short of forecasts?


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ReNew Energy Global PLC (RNW) experienced a net loss of INR 3,879 million (US$ 45 million) for Q3 FY25, which is a significant figure considering the company's strategic growth efforts. The shortfall in earnings can be attributed to the following factors:
- Cost Management Challenges: Despite a 25.5% year-over-year increase in commissioned capacity to approximately 10.7 GWs and a significant increase in the total portfolio capacity, the company reported a net loss. This indicates that the additional capacity did not translate into proportional profitability12. The cost of expansion, including the 26% increase in operational portfolio capacity, likely overwhelmed the revenue growth, leading to a net loss.
- Revenue from Power Sale: The revenue from the sale of power decreased slightly to INR 14,991 million (US$ 175 million) in Q3 FY25 from INR 15,026 million (US$ 176 million) in Q3 FY24. This decline, despite a 10% revenue growth in Q3 FY25, suggests that the company faced challenges in maximizing revenue per unit of power sold3. This could be due to factors such as market conditions, competition, or operational efficiency issues.
- Wind Variability and Resource Availability: The company's FY25 EBITDA guidance was revised due to lower resource availability. This suggests that the variability in wind patterns and resource availability significantly impacted the company's energy production and, consequently, its earnings. The decline in net profit margins over the nine-month period from INR 3,538 million (US$ 41 million) in FY24 to INR 1,454 million (US$ 17 million) in FY25 indicates a struggle with cost management and profitability amidst changing resource conditions14.
In summary, ReNew Energy Global PLC's Q3 2025 earnings fell short of forecasts primarily due to cost management challenges associated with rapid expansion, a slight decrease in revenue from power sale, and the impact of wind variability and resource availability. These factors combined to result in a net loss for the quarter.
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