Leading the Charge to a Greener Future
India’s ambitious 500GW renewable energy target by FY30, up from the current 220GW, sets a strong growth backdrop for companies like ACME Solar Holdings (ACMESOLA IN). With 2.8GW of operational solar capacity and 4.1GW under development, ACME is rapidly expanding its portfolio to 7.0GW by FY28. The company is diversifying into firm and dispatchable renewable energy (FDRE) at 2.6GW, and hybrid at 750MW segments to enhance returns and grid reliability. This robust project pipeline is expected to drive significant growth, with revenue and EBITDA projected to quadruple during FY25-28E, supported by strong execution and capacity addition. We initiate coverage of ACMESOLA with a Buy rating and a TP of INR 325.
Ambitious 500GW renewable capacity target propels growth: India has set an ambitious target of achieving 500GW of renewable energy capacity by FY30 (Source: Ministry of Power). As on FY25, installed renewable capacity stands at 220GW, comprising 105GW of solar, 50GW of wind, and 48GW of hydro power. Between FY15 and FY25, the country has added 136GW of renewable capacity, with solar leading, contributing 103GW, while wind energy addition stood at 29GW during the same period.
Generation portfolio to triple to 7.0GW by FY28: ACMESOLA is a prominent firm in the renewable energy space in India, with 2.8GW of operational solar capacity. The company is expanding, with 4.1GW of renewable projects currently under construction. It is also developing 2.6GW of FDRE projects. Additionally, it has 750MW of hybrid projects and 900MW of solar projects under construction
Revenue & EBITDA to more than treble during FY25-28E: The company will likely report revenue of INR 63bn by FY28E at a 49% CAGR during FY25-28E. We expect an EBITDA CAGR of 66% during the same period. Robust capacity expansion based on buoyant project pipeline is expected to bolster earnings.
Initiate with a Buy rating and TP of INR 325: ACMESOLA has robust growth roadmap supported by a strong execution history. The company currently operates 2,826MW of solar capacity, with an additional 4,143MW under development. It is increasingly focused on FDRE and hybrid projects to enhance returns and improve grid reliability. With plans to scale up renewable capacity from 2.8GW to 7.0GW by FY28, it is poised for significant growth, with a revenue CAGR of 49% and an EBITDA CAGR of 59% during FY25-28E. Currently, it is trading at 8.3x FY28E EV/EBITDA and 13.2x FY28E at P/E. We assign a valuation multiple of 9.0x FY28E EV/EBITDA, resulting in a target price of INR 325, implying 30% upside from the current levels. We initiate coverage with a Buy rating.
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