ICICI Securities has updated its outlook on Acme Solar Holdings, raising its price target to ₹450. The revision follows a strong quarterly performance where the company reported an EBITDA of ₹730 crore, beating consensus estimates. Investors are now tracking the company’s progress on its battery storage expansion plans, which aim to reach 10 GWh by FY27.
ICICI Securities has updated its coverage on Acme Solar Holdings, setting a new price target of ₹450 per share. This adjustment reflects a positive view on the company's recent operational performance and its strategic focus on battery energy storage systems.
Battery Storage Expansion and Earnings Impact
The company has made progress in its storage division, recently commissioning approximately 3.6 GWh of battery energy storage capacity. Management has set an updated target to reach 10 GWh of commissioned storage capacity by the end of FY27, moving the timeline ahead of its previous goal. This expansion is central to the company’s strategy, as it aims to capitalize on the increasing demand for energy management solutions in the Indian power sector.
Financial results for the latest quarter showed an EBITDA of ₹730 crore, which exceeded market expectations of ₹650 crore. The brokerage noted that the ‘duck curve’ phenomenon—a market condition where electricity prices drop during peak solar generation hours and rise sharply during evening peak demand—is providing the company with arbitrage opportunities. These price fluctuations allow operators to store energy when it is cheap and release it during high-demand periods, potentially improving profit margins.
Outlook and Future Estimates
Following these results, the brokerage has increased its EBITDA projections for the company. The revised estimates suggest a 16% rise in EBITDA for FY27 and a 23% increase for FY28. Projections for the company’s EBITDA stand at ₹3,400 crore for FY27 and ₹6,400 crore for FY28, with the battery storage segment expected to contribute ₹1,000 crore and ₹1,500 crore respectively in those years. The growth in these figures is linked to the successful signing of new power purchase agreements and the operational scaling of its energy storage projects.
Investor Monitorables
While the expansion plans are significant, investors may continue to track the execution timeline for the 10 GWh storage target. Projects involving large-scale infrastructure, such as battery storage systems, carry the risk of cost overruns or delays in supply chain procurement. Additionally, the profitability of the storage business will depend on the continued availability of arbitrage opportunities and the stability of electricity pricing in the grid. The company’s ability to secure and fulfill long-term power purchase agreements remains a primary factor that will influence future cash flows and earnings stability.