NEW DELHI - ReNew Power, a leading renewable energy company in India, has entered into a significant green energy contract with tech giant Microsoft (NASDAQ:MSFT), according to a statement released today. The contract involves the sale of green energy attributes from 437.6 megawatts (MW) of renewable energy capacity, which is expected to generate more than one million units of green electricity attributes each year. This move aligns with Microsoft's goal to become carbon-negative by 2030.
The partnership also includes the establishment of a community fund by ReNew, with approximately $15 million of revenue from this contract allocated to support initiatives that benefit local communities. These initiatives focus on women's economic empowerment, rural electrification, environmental remediation, and water quality improvement. The ReNew Foundation, which is the philanthropic arm of ReNew Power, will manage the delivery of these programs in alignment with Microsoft's environmental justice priorities.
Puneet Chandok, President of Microsoft India & South Asia, emphasized the holistic approach of the agreement, which aims to advance Microsoft's climate objectives while also empowering local communities with necessary technology for a resilient future.
Sumant Sinha, Founder, Chairman, and CEO of ReNew, underscored the significance of this agreement in supporting global decarbonization efforts and in fulfilling ReNew's commitment to a just energy transition that addresses socio-economic issues related to climate change.
This agreement is part of a series of five power purchase agreements (PPAs) signed by ReNew in the quarter ending June 30, 2024, which total approximately 2.2 gigawatts (GW). These agreements have expanded ReNew's portfolio to 15.6 GW. In the fiscal year 2024, ReNew contributed around 10% of India's total solar and wind energy generation and secured auctions to supply over 8 GW of renewable energy projects. With additional Letters of Awards for about 5.8 GW of projects, ReNew is on track to double its renewable energy portfolio to over 21 GW by fiscal year 2029, reinforcing its role in India's clean energy transition.
The information for this article is based on a press release statement.
In other recent news, ReNew Power saw its stock price target adjusted by an investment firm due to underperformance in Q1 earnings. The new target was set at $8, down from $9, though the Buy rating remains unchanged. Analysts from Roth/MKM revised the company's fiscal year 2025 estimates downwards, citing lower than expected Q1 results and a cautious stance on the company's module sales for the year.
Despite the reduction, the outlook on ReNew Power's stock remains positive. The company's success in securing Power Purchase Agreements (PPAs) for the 8-gigawatt capacity it won in a fiscal year 2024 auction is considered a key factor in bolstering investor confidence. The investment firm projects a growth rate of approximately 16-18% in its operating capacity and adjusted EBITDA through fiscal year 2029.
In the same vein, ReNew Energy Global PLC (NASDAQ:RNW) reported significant progress in its first-quarter fiscal year 2025 earnings call. The company won over 8 gigawatts in auctions and converted 2.2 gigawatts into PPAs. It also commissioned 500 megawatts of capacity this year and reaffirmed its financial guidance for FY '25, expressing confidence in meeting its annual EBITDA targets. Despite a reduction in its year-on-year wind power forecast, ReNew has secured transmission connectivity for its commissioned and planned capacity, indicating potential for expansion.
InvestingPro Insights
ReNew Power (RNW) has recently made headlines with its substantial green energy contract with Microsoft, bolstering its position as a major player in the renewable energy sector. As investors look at RNW's financial health and market performance, certain metrics and InvestingPro Tips provide a clearer picture of the company's current status.
InvestingPro Data reveals that ReNew Power has a market capitalization of 1.84 billion USD, indicating its substantial size within the Independent Power & Renewable Electricity Producers industry. Despite a high P/E ratio of 214.23, reflecting investor optimism about future earnings potential, the company's adjusted P/E ratio for the last twelve months as of Q1 2025 stands at -378.82, suggesting volatility in profitability. The revenue for the same period is reported at 984.36 million USD, with a solid revenue growth of 6.21%, demonstrating the company's capacity to increase its sales figures.
Two InvestingPro Tips highlight critical aspects of RNW's strategy and performance. Firstly, management's aggressive share buybacks signal confidence in the company's prospects and a commitment to enhancing shareholder value. Secondly, the fact that two analysts have revised their earnings upwards for the upcoming period points to a positive outlook on the company's financial future.
Investors interested in deeper analysis can find additional InvestingPro Tips on https://www.investing.com/pro/RNW, which includes insights into the company's debt burden, cash flow, and valuation multiples. There are 12 more InvestingPro Tips available that could help investors make more informed decisions regarding ReNew Power's stock.
As ReNew Power forges ahead with its ambitious growth plans and strategic partnerships, these financial metrics and expert insights from InvestingPro serve as vital tools for stakeholders to assess the company's market position and potential for long-term success.
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