Motilal Oswal Flags ACME Solar, Sets Rs 350 Target

RENEWABLES

Overview

Motilal Oswal initiated a 'Buy' recommendation for ACME Solar Holdings, setting a Rs 350 price target. The brokerage highlighted robust year-over-year revenue growth of 42% and strong EBITDA margins. Investors can anticipate an interim dividend of ₹0.2 per share for FY26. The target valuation was adjusted to 9.5x FY28E EBITDA, aligning with industry peers like NTPC Green.

Financial Performance

ACME Solar Holdings reported consolidated revenue of ₹5 billion, marking a significant 42% increase year-over-year and a 6% rise quarter-over-quarter. This figure, however, slightly missed estimates by 3%. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) reached ₹4.4 billion, up 45% YoY and 11% QoQ. The company maintained a strong EBITDA margin of 89%. Adjusted Profit After Tax (PAT) stood at ₹1.1 billion, an improvement of 10% over estimates, though it saw a 4% year-over-year decline while increasing 3% sequentially, boosted by higher other income.

Valuation and Outlook

Motilal Oswal has moderated its enterprise value to EBITDA-based target price for ACME Solar Holdings to ₹350 per share. The firm is now valuing the stock at 9.5 times its fiscal year 2028 estimated EBITDA. This valuation is a slight decrease from the previous multiple of 10 times, reflecting a recalibration that remains in line with comparable entities, specifically NTPC Green. The brokerage anticipates sustained performance from the company within the renewable energy sector.

Dividend Announcement

Adding to the positive outlook, the company's Board of Directors declared an interim dividend. Shareholders will receive ₹0.2 per share for the fiscal year 2026. The record date for this payout is set for February 6, 2026, providing a direct return to investors.

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