Broker’s call: Acme Solar (Buy)

Target: ₹354

CMP: ₹256.95

Acme Solar Holdings Ltd presents a compelling investment opportunity in India’s rapidly expanding renewable energy sector. The Indian government aims to achieve 500 GW of non-fossil fuel-based energy capacity by 2030, a key goal in its renewable energy strategy. This target aligns with broader goals of energy independence by 2047 and reaching net-zero emissions by 2070.

In FY25, India added 29.5 GW of renewable capacities out of which 23.8 GW was solar and 4.2 GW was wind and the rest was bioenergy. For India to reach its target of 500 GW by FY30, this rate of additions is required to reach 40-50 GW annually for next 5 years.

Government realises the need to address the base load demand and hence has mandated 10 per cent Energy Storage System (2 hours of storage) for all upcoming RE projects and also has shown inclination towards Firm and Dispatchable Renewable Energy (FDRE) & Hybrid tenders.

Acme Solar is currently trading at a 2-year forward EV/EBITDA multiple of 6.7 times, which appears attractive given the company’s growth trajectory and the favourable outlook for India’s renewable energy sector. We estimate ACME’s EBITDA to be ₹6,081 crore by FY27. Assigning a conservative exit multiple of 15 times, we arrive at a target price of ₹354.

Published on May 29, 2025