Is it time to sell your ReNew Energy Global stock?

Roth Capital Partners analyst Justin Clare downgraded ReNew Energy Global (ReNew Energy Global Stock Quote, Chart, News, Analysts, Financials NASDAQ:RNW) to “Neutral” from “Buy” and cut his price target to US$7.02 from $8.00, saying the pending take-private now matters more to the stock than operating performance.

In an Aug. 26 report, Clare noted that ReNew’s fiscal first-quarter results were better than expected, helped by strong manufacturing revenue, while weaker solar output reflected lower irradiation and grid curtailment.

ReNew reported revenue of US$506-million, above consensus of US$456-million and Roth’s US$451-million estimate. Adjusted EBITDA of US$321-million also topped consensus of US$300-million and Clare’s US$297-million forecast, while EPS of US$0.17 beat expectations of US$0.12.

Manufacturing revenue of about US$173-million was well ahead of Clare’s US$108-million estimate, offsetting weaker-than-expected solar revenue of US$118-million.

The company reiterated fiscal 2027 Adjusted EBITDA guidance of INR103-billion to INR109-billion, with Clare noting the manufacturing contribution now looks potentially conservative after a strong first quarter.

However, he said the investment case is now dominated by the proposed US$7.02-per-share take-private led by CPP Investments and founder Sumant Sinha.

“RNW signed a binding agreement at $7.02 per share with ~51% of the vote already secured,” Clare said.

Irrevocable undertakings currently cover about 51.1% of the vote, compared with the 75% approval threshold, and ReNew’s special committee intends to unanimously recommend the transaction. Management expects the scheme to become effective in the first quarter of calendar 2027.

“With shares trading near the offer price, fundamentals are now secondary to deal certainty,” Clare said.

Clare estimates ReNew will generate US$1.104-billion in Adjusted EBITDA on revenue of US$1.732-billion in fiscal 2027, improving to US$1.296-billion in Adjusted EBITDA on revenue of US$1.963-billion in fiscal 2028.

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