JM Financial initiates coverage on ACME Solar Holdings, target price Rs 262

economictimes.indiatimes.com:

buy call on ACME Solar Holdings Ltd. with a target price of Rs 262. The current market price of ACME Solar Holdings Ltd. is Rs 232.5 Time period given by analyst is year when ACME Solar Holdings Ltd. price can reach defined target. .

Investment Rationale

India is likely to have 777GW of power generation capacity by 2030, including 500GW from clean sources and ~277 GW from fossil fuel-based sources, to meet the projected peak demand of 335GW. Also, the annual RE capacity addition run rate of 15-18GW must scale up to 35-40 GW to meet COP26 commitments. The crowded Indian RE IPP market is heading towards consolidation as more than 50% of it is concentrated among 9-10 players including ACME Solar (ACME). IPPs with strong capital and capabilities are slated to grow and become large in future. ACME is one such emerging star with 2,540MW of operational and 4,430MW of under-construction projects while it leverages its in-house integrated capabilities.

With an operational capacity of 1,340MW in FY24, it generated revenue of Rs 13,193 million, with EBITDA margin of 82.6%. ACME is currently trading at an EV/EBITDA of 13.1x on FY27E, down 28% from its issue price of Rs 289. Given the company?s clear visibility on upcoming capacity (6,970MW by FY28E), the revenue and EBITDA will grow at a CAGR of 55%/57% over FY24?28E. JM