Broker’s Call: ACME Solar (Buy)

Why It Matters

The rating highlights ACME Solar’s rapid scaling and strong cash‑flow outlook, positioning it as a discounted, high‑growth play in India’s renewable power market.

Key Takeaways

• Capacity jumps from 2,540 MW (FY25) to 6,270 MW (FY28).
• FDRE pipeline totals 4,031 MW; 2,980 MW under firm PPAs.
• Revenue CAGR forecast at 71% through FY28.
• EBITDA per MW rises from ₹64 lakh to ₹1.34 crore.
• Target price $4.4 implies 10.5× FY28E EV/EBITDA.

Pulse Analysis

ACME Solar is emerging as a cornerstone of India’s renewable transition, thanks to its aggressive expansion of firm and dispatchable renewable energy (FDRE) assets. By FY 28, the company plans to more than double its capacity, leveraging government‑backed power purchase agreements that lock in revenue streams for over 2,900 MW of its pipeline. This scale‑up aligns with the nation’s push for higher‑capacity‑factor projects, which command premium tariffs and reduce reliance on intermittent solar.

Financially, the broker’s model projects a 71% revenue CAGR and a 70% EBITDA per MW uplift, translating to an EBITDA margin that outpaces most domestic peers. Valued at a 10.5× FY 28E EV/EBITDA multiple, ACME trades at a discount despite superior growth metrics, suggesting a valuation gap that could be closed as battery‑cost deflation lifts project IRRs by 150–300 basis points per $10/kWh decline. The firm’s projected ROE of 23% by FY 28 underscores a robust return profile, while equity IRRs of 25% for Assured Peak contracts reinforce the attractiveness for capital‑intensive investors.

The broader market context reinforces ACME’s upside. India’s renewable targets, coupled with supportive fiscal policies and a burgeoning demand for firm capacity, create a tailwind for FDRE developers. As battery storage costs continue to fall, ACME’s integrated BESS strategy positions it to capture additional margin and mitigate curtailment risk. Investors should monitor policy shifts, grid integration challenges, and financing conditions, but the company’s strong pipeline, disciplined valuation, and strategic focus on high‑CUF assets make it a compelling addition to a renewable‑focused portfolio.