A Look At ReNew Energy Global (RNW) Valuation After Robust Q3 Earnings And Upgraded Guidance

ReNew Energy Global (RNW) is back on investors’ radar after its latest earnings release, which highlighted strong year over year revenue growth, higher electricity sales from wind and solar, and a sharp improvement in adjusted EBITDA.

See our latest analysis for ReNew Energy Global.

Despite the strong Q3 earnings update, ReNew Energy Global’s recent trading has been mixed. The 1-day share price return is 1.67% and the 7-day share price return is 2.62%, compared with a 90-day share price return decline of 27.67%. The 3-year total shareholder return of 26.50% contrasts with a 1-year total shareholder return decline of 11.16%, suggesting short term caution but a still positive multi year outcome for long term holders.

If this earnings news has you looking more broadly at the energy transition theme, it could be a good moment to scan 24 power grid technology and infrastructure stocks for potential opportunities linked to grid upgrades.

With ReNew posting higher revenue, positive net income over the nine month period, and trading at $5.49 with a large discount to the average analyst price target, the key question is whether this signals a buying opportunity or if markets are already pricing in future growth.

Most Popular Narrative: 30.9% Undervalued

The most followed narrative pegs ReNew Energy Global’s fair value at $7.95 versus the last close at $5.49. This frames a sizable valuation gap that rests on specific revenue and margin assumptions over the next few years.

Expansion and ramp-up of ReNew's manufacturing business, especially with marquee strategic investments (e.g., from British International Investments) and a new 4 GW TOPCon facility under construction, diversify revenue streams and lower input costs, improving earnings visibility and profitability.

Read the complete narrative.

Want to see what kind of revenue runway and profit margins are baked into that fair value, and how earnings multiples are expected to evolve over time? The full narrative spells out the growth path that needs to materialise to justify that $7.95 figure.

Result: Fair Value of $7.95 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that upside case can be challenged if fierce bidding compresses project margins or if delays around land, transmission, or regulation slow project execution and cash flows.

Find out about the key risks to this ReNew Energy Global narrative.

Next Steps

If this mix of potential and risk has you thinking, now is a good time to review the numbers yourself and weigh both sides. A good place to start is 5 key rewards and 2 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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