Shares of ACME Solar Holdings surged as much as 8% to hit an intraday high of ₹274 on the BSE on Friday after UK-based brokerage Investec initiated coverage on the stock with a 'Buy' rating. According to The Economic Times, the stock has gained nearly 37% in the last one year, demonstrating strong momentum ahead of the positive analyst coverage. All 10 analysts tracking the stock currently have a 'Buy' rating on it, as reported by CNBC TV18, indicating broad consensus among market experts on the company's growth prospects.
Brokerage firm Investec has maintained its 'Buy' rating on ACME Solar Holdings with a price target of ₹319, implying a potential upside of about 25.5% from the previous closing price of ₹254. According to The Economic Times, the brokerage believes the company remains undervalued compared to peers, leaving room for further upside in the stock. The investment case is built on four key pillars: a strong FDRE portfolio, improving returns supported by timely project execution, robust earnings visibility, and attractive valuations. Investec values the company at 9x FY28E EV/EBITDA, which is at a discount to peers such as JSW Energy, Tata Power and NTPC Green Energy, which are trading in the 12-14x range.
ACME Solar is undergoing a structural transition, evolving from a mid-sized solar developer into India's leading Firm and Dispatchable Renewable Energy (FDRE) player, powered by solar-wind-storage hybrid solutions that deliver round-the-clock clean power. As reported by The Economic Times, the company has a strong growth pipeline with 5.1 GW of capacity currently under construction, providing clear multi-year visibility. This is expected to scale the installed capacity to 6 GW by FY28 and further to 8 GW by FY30E, implying a healthy CAGR of around 26% over FY25-30E. Importantly, a majority of these projects have been awarded by central agencies such as Solar Energy Corporation of India, NTPC Limited, NHPC Limited and SJVN Limited, which significantly reduces counterparty risk.
A key highlight of the portfolio is the increasing share of FDRE (Firm and Dispatchable Renewable Energy) projects, which account for around 79% or 4.0 GW of the under-construction pipeline, although these are yet to be operational. These assets typically operate at plant load factors exceeding 40% and deliver returns on equity of about 18%. According to The Economic Times, driven by this capacity expansion, ACME's installed base is expected to grow from 2.5 GW in FY25 to 6 GW by FY28, supporting robust financial growth. Revenue, EBITDA and PAT are projected to grow at CAGRs of 62%, 63% and 69% respectively over FY25-28E, reaching ₹5,900 crore, ₹5,300 crore and ₹1,200 crore respectively. EBITDA margins are likely to improve to 89.5% by FY28E from 87.9% in FY25, led by a higher contribution from high-margin FDRE projects.
The company also enjoys strong execution visibility, with power purchase agreements (PPAs) already secured for 3.5 GW of its under-construction portfolio. Management expects letters of award for the remaining 1.6 GW, with only 300 MW pending, to translate into firm PPAs over the coming quarters. Additionally, evacuation infrastructure is in place for the entire 4.5 GW under-construction capacity, and most of the required land for projects planned up to FY27 has already been acquired, mitigating risks related to delays and internal rate of return. The company's return on capital employed (ROCE) is projected at 11.0% and return on equity (ROE) at 19.5% by FY28E, up from 8.8% and 7.1% in FY25 respectively, as the share of FDRE projects rises through FY26-28E.
