SYNOPSIS: One of the leading integrated renewable energy players’ shares rose after Investec’s ‘buy’ call, citing FDRE-led growth and attractive valuation. Meanwhile, the company expanded BESS capacity and advanced its Gujarat wind project, strengthening its renewable portfolio.
During Friday’s trading session, shares of one of the leading integrated renewable energy players, with a diversified portfolio of 8,071 MW spanning solar, wind, storage, FDRE and hybrid solutions, an operational contracted capacity of 2,978 MW and 1 GWh of BESS capacity, surged nearly 8 percent on the stock exchanges. So, what triggered this sharp rise? Let’s break it down in this article.
With a market cap of Rs. 16,331 crores, shares of ACME Solar Holdings Limited are currently trading in the green at Rs. 269.5 on BSE, up by over 6 percent, compared to its previous closing price of Rs. 253.85. The stock has delivered positive returns of around 39 percent in one year, and has gained by over 14 percent in the last one month.
Brokerage View: Investec Sees Strong Upside Driven by FDRE Shift
Shares of ACME Solar Holdings Limited surged nearly 8 percent today, after UK-based brokerage Investec initiated coverage with a ‘buy’ rating on the stock with a target price of Rs. 319 per share, representing a potential upside of around 26 percent from its previous closing price. The brokerage believes the stock is currently undervalued relative to its peers, leaving meaningful scope for further appreciation.
According to Investec, ACME Solar is in the midst of a structural transformation, transitioning from a mid-sized solar developer into a scaled renewable energy platform with a strong presence in firm and dispatchable renewable energy (FDRE). This transition is being powered by the company’s strategic focus on hybrid solutions combining solar, wind, and energy storage, enabling a reliable round-the-clock clean power supply.
The investment thesis is anchored on four key factors. First, a robust FDRE portfolio that already contributes 49 percent of total capacity. Second, improving profitability driven by timely project execution, with return on capital employed (ROCE) projected at 12-13 percent. Third, strong earnings visibility, with EBITDA expected to grow at a CAGR of 63 percent between FY25 and FY28. Lastly, attractive valuations, with the stock trading at nearly 8x FY28 estimated EV/EBITDA, making it the cheapest among its peers.
With a development pipeline of around 5 GW, of which nearly 80 percent is FDRE, the company appears well-positioned to sustain its growth trajectory. Capacity addition is expected to remain strong, with 450 MW likely to be commissioned in FY26, followed by 1.5 GW each in FY27 and FY28.
Investec estimates that ACME’s installed capacity could increase significantly to 6 GW by FY28 from 2.5 GW in FY25. This scale-up is expected to translate into robust financial growth, with revenue, EBITDA, and PAT projected to grow at CAGRs of 62 percent, 63 percent, and 69 percent, reaching Rs. 5,900 crore, Rs. 5,300 crore, and Rs. 1,200 crore, respectively. EBITDA margins are also expected to improve to 89.5 percent by FY28E from 87.9 percent in FY25, supported by a higher share of high-margin FDRE projects.
Latest Operational Updates
Operationally, the company has continued to scale up its capacity. On 24th March, ACME Solar Holdings Limited, through its multiple subsidiaries, commissioned an additional 155 MW / 470.25 MWh of Battery Energy Storage System (BESS) capacity. With this milestone, the company’s total commissioned BESS capacity stands at 297.67 MW / 951.74 MWh, out of total planned BESS capacity of 835 MW / 3,114.64 MWh across its SPVs.
These projects, located in Rajasthan, are connected to the Inter-State Transmission System (ISTS) and will operate on a merchant basis, allowing the company to benefit from price arbitrage between peak and off-peak power demand, thereby creating an additional revenue stream.
Further strengthening its renewable portfolio, on 26th March, ACME Eco Clean Energy Private Limited, a subsidiary of ACME Solar Holdings Limited, commissioned an additional 4 MW out of the 100 MW wind power project at Dhakaniya, Gujarat. The commissioning has been witnessed and confirmed by officials from Gujarat Energy Development Agency (GEDA) and Paschim Gujarat Vij Company Limited (PGVCL). With this, the project’s total commissioned capacity has reached 92 MW out of 100 MW.
Financials & More
ACME Solar reported a significant growth in revenue from operations, experiencing a year-on-year increase of over 42 percent, from Rs. 349 crores in Q3 FY25 to Rs. 497 crores in Q3 FY26. Likewise, its net profit increased during the same period from Rs. 112 crores to Rs. 114 crores, representing a marginal rise of about 2 percent YoY.
ACME Solar Holdings Limited is engaged in the business of establishing, commissioning, setting up, operating and maintaining power generation using solar, fossil and alternate source of energy and act as owners, manufacturers, engineers, procurers, buyers, sellers, distributors, dealers and contractors for setting up of power plant using glass bases mirrors, photo voltaic, boilers, turbines and/or other equipments for generating, distribution and supplying of electricity and other products using solar, fossil and alternate source of energy under conditions of direct ownership or through its affiliates, associates or subsidiaries.
It is a leading integrated renewable energy player with a diversified portfolio of 8,071 MW spanning solar, wind, storage, FDRE and hybrid solutions and an operational contracted capacity of 2,978 MW and 1 GWh of BESS capacity and under construction contracted capacity of 5,093 MW, including about 16 GWh of BESS installation. The under-construction PPA signed portfolio stands at 3,292 MW.
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