Target: ₹380

CMP: ₹311.20

We initiate coverage on ACME Solar Holdings with a ‘Buy’ rating and DCF- based TP of ₹380 implying 10x of FY28E EBITDA.

Acme Solar is among India’s top leading Renewable Energy (RE) Independent Power Producers (IPPs), with 2.9GW of operational capacity and a strong commissioning pipeline that is expected to scale capacity to about 7 GW by FY29E.

The company has set a long-term goal of reaching 10 GW contracted capacity by 2030, implying a 3.4x growth, and is also uniquely positioned to gain from GST reforms – structurally positive; QIP to aid projects equity funding; RPO supporting the overall portfolio, and diversification into BESS return ratio accretive.

We expect supernormal EBITDA CAGR of 68 per cent and PAT CAGR of 78 per cent over FY25- 28E, on the back of incremental capacity commissioning of 3.5GW, the majority will be made up of FDRE/Hybrid, accounting for 64 per cent and 18 per cent respectively, which will enhance overall CUF/tariffs to 37/₹3.7 per kWh; and over FY25-28E. Early Battery rollout at FDRE to drive revenue growth.

Key risks: Delay in commissioning, commodity price, delay or failure in signing power purchase agreements, and reliance on long-term debt financing.

Published on September 15, 2025