ACME Solar shares surge 7% as Motilal Oswal initiates with a Buy, sees 59% upside

Motilal Oswal said ACME is one of the few players adding wind power capabilities, giving it an edge over peers like NTPC Green, which is less focused on wind power.

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26 Aug, 2025 12:21

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Shares of renewable energy player ACME Solar are higher by nearly 7% after Motilal Oswal initiated coverage on the company with a Buy rating and a target price of Rs 330 per share, implying a 59% potential upside.

"About 86% of the company’s portfolio is contracted with central off-takers, including SECI, NTPC, SJVN, and NHPC, involving minimal counterparty risk," said the MOFSL note. Nearly half of these projects are based on solar power. ACME Solar has an operational portfolio of ~2.5GW, while the total project pipeline, including under-construction projects, stands at ~4.4GW, the note added.

MOFSL has factored in a strong operating performance by the company going forward, projecting a 52% EBITDA CAGR over three years, as its pipeline of projects gets commissioned, which would take the capacity higher by three-fold. ACME continues to bag new projects this fiscal, expanding its project pipeline from SECI and other central agencies.

Given that the renewable power company has already signed PPAs for 2 GW worth of under-construction capacity out of the total 4.43 GW projects underway, MOFSL said "at the entire FY26 revenue/EBITDA is ‘in the bag’ i.e., backed by PPAs," along with a significant part of the revenue/EBITDA for FY27 as well. This additional capacity is backed by a cumulative capex of Rs 39,700 crore.

ACME Solar has a market capitalization of over Rs 13,000 crore, and the shares of the company are down by 6% so far this year. Over the last one year, Acme's shares are lower by over 12%.

Motilal Oswal said ACME is one of the few players adding wind power capabilities, giving it an edge over peers like NTPC Green, which is less focused on wind power. The report added that ACME's steep valuation discount against NTPC Green is 'unsustainable' and should narrow in the coming quarters.