Shares of ACME Solar have surged more than 80 per cent in the last 8 months. The stock has surged to Rs 304.85 mark on Tuesday, extending its rally to 82 per cent from its 52-week low at Rs 167.55, hit on January 28, 2025. However brokerage firms continue to remain positive on the stock, suggesting more steam left in the stock.
In its recent report, Master Trust Capital said that ACME Solar is set to significantly expand its renewable energy footprint with a target of 7 GW capacity by 2027, focusing heavily on Flexible Demand Response Energy (FDRE) projects. Nearly half of this new capacity will be sourced from FDRE, reinforcing ACME’s position in India’s renewable energy sector.
This strategic expansion is part of a broader plan that includes rolling out a 10 GWh Battery Energy Storage System (BESS) by the calendar year 2026. The company anticipates this will drive a revenue increase of over four times to Rs 5,900 crore, with a profit after tax (PAT) growth of 3.5 times to Rs 950 crore by the financial year 2028, it said.
ACME’s aggressive capex strategy involves a planned investment of Rs 12,000-15,000 crore annually during FY26-FY27. This investment strategy is crucial for supporting its 7 GW expansion plan, with funding primarily through a 75:25 debt-equity structure. The company aims to secure this financing via global lenders and refinancing at lower interest rates, it noted.
The company’s focus on FDRE projects is expected to provide a stable and efficient power supply, highlighting its role as a key player in India’s clean energy transition. ACME’s move towards FDRE is aimed at providing reliable, cost-effective electricity, which is a significant advantage over traditional solar or wind projects.
Master Trust has provided a valuation of ACME at 10 times FY28E EV/EBITDA, estimating a fair value of Rs 372 per share with a ‘buy’ recommendation. This valuation implies a 22 per cent upside from the current market price, reflecting investor optimism about ACME’s potential growth and profitability.
Acme Solar Holdings is a leading Indian beneficiary of the global battery price decline, with a class-leading portfolio IRR. It has addressed the key bottlenecks to RE execution, thereby bettering larger peers in delivering growth. The management has shown aptitude of capturing arbitrage opportunities, like early battery deployment to gain from the ‘solar duck curve’, IIFL Securities said with a target price of Rs 335.
Elara Capital also initiated coverage on ACME Solar Holdings with a ‘buy’ rating citing it as a key player in India’s renewable energy sector. The brokerage highlights India’s push to increase renewable capacity to 500GW by FY30, emphasising ACME Solar’s strategic positioning and robust project pipeline. Currently operating 2.8GW, the company plans to expand to 7.0GW by FY28.
ACME Solar is a renewable energy company operating across 11 Indian states with a focus on solar, wind, and battery storage. It was incorporated in 2015 to consolidate ACME Group’s renewable energy IPP business and currently has over 2,890 MW of operational capacity.
It has built solar projects in states like Gujarat, Odisha, Andhra Pradesh, and Bihar and it has expanded into advanced renewable energy projects with 3,380 MW of Hybrid and Firm & Dispatchable Renewable Energy capacity awarded by key central offtakers, including Solar Energy Corporation of India (SECI), SJVN, National Hydroelectric Power Corporation and NTPC.
Among other brokerage firms, Motilal Oswal Financial Services has a ‘buy’ rating on the stock with a target price of Rs 347. On the other hand, JM Financial has a ‘hold’ rating on the stock with a target price of Rs 330 on the stock.