Acme Solar Rises 4% After Investec Launch with 'Buy' Rating, ₹319 Target

ENERGY

Overview

Acme Solar Holdings shares climbed 4% today after brokerage Investec initiated coverage with a 'Buy' rating and a ₹319 price target. The positive outlook is driven by the company's shift to becoming a leading dispatchable renewable energy (FDRE) player through hybrid solar-wind-storage solutions. Analysts cite its strong FDRE portfolio, expected return improvements, robust earnings growth forecasts, and attractive valuation as key strengths.

Investec Initiates Coverage with 'Buy' Rating

Acme Solar Holdings stock climbed 4% today after Investec began covering the company with a 'Buy' recommendation and a ₹319 price target. This target suggests about 26% potential upside from current prices and aligns with other 'buy' ratings.

Focus on Dispatchable Renewable Energy (FDRE)

The positive view centers on Acme Solar's strategic shift. The company is transitioning from a solar developer to a significant player in dispatchable renewable energy (FDRE). This is powered by its focus on hybrid solar-wind-storage solutions, which aim to provide clean energy around the clock. This integrated approach is key for meeting future power needs.

Growth Prospects and Valuation Attract Investors

Investec's investment case highlights four main points. Acme Solar has a strong FDRE portfolio, making up 49% of its current capacity. Returns are expected to rise, with return on capital employed (ROCE) forecast between 12-13%. Earnings are projected for strong growth, with EBITDA expected to increase by 63% annually from FY25 to FY28. The company also offers an attractive valuation, trading at about 8 times its FY28 estimated EV/EBITDA, making it the cheapest among industry peers. With a pipeline of roughly 5 GW of projects under construction and development, Acme Solar is positioned for continued expansion.

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