Target Price: ₹380
Current Market Price (CMP): ₹311.20
We are initiating coverage on ACME Solar Holdings with a ‘Buy’ recommendation, presenting a discounted cash flow (DCF)-based target price of ₹380, which reflects a 10x multiple on FY28E EBITDA.
ACME Solar stands as one of India’s prominent Renewable Energy (RE) Independent Power Producers (IPPs), boasting an operational capacity of 2.9GW. The company has a robust commissioning pipeline anticipated to expand its capacity to approximately 7 GW by FY29E.
The organization aims for a long-term objective of achieving 10 GW of contracted capacity by 2030, indicating a 3.4x growth trajectory. ACME is strategically positioned to benefit from GST reforms, a fundamentally positive structure; a Qualified Institutional Placement (QIP) will facilitate project equity funding; Renewable Purchase Obligations (RPO) support the overall portfolio, alongside diversification into Battery Energy Storage Systems (BESS) which are expected to be accretive to returns.
We project an extraordinary EBITDA compound annual growth rate (CAGR) of 68% and a PAT CAGR of 78% from FY25 to FY28E, driven by the commissioning of an additional 3.5GW capacity, with significant contributions from FDRE/Hybrid sources, contributing 64% and 18% respectively. This will enhance overall Capacity Utilization Factor (CUF) and tariffs to 37/₹3.7 per kWh by FY25-28E. The early rollout of batteries in FDRE will further stimulate revenue growth.
Key Risks: Potential delays in commissioning, fluctuations in commodity prices, setbacks or failure in finalizing power purchase agreements, and dependence on long-term debt financing.
Published on September 15, 2025
