Buy ACME Solar Holdings; target of Rs 347: Motilal Oswal

Motilal Oswal's research report on ACME Solar Holdings

Multiple projects being commissioned contribute to building a strong execution track record: ACME Solar Holdings (Acme)’s operational capacity currently stands at 2.9GW vs. only 1.3GW at the time of IPO. Commissioning of the 1.6GW capacity over the past few quarters has demonstrated strong project management skills, boosted earnings and cash flow visibility, and eased investor concerns related to the execution of a robust 4GW project pipeline, in our opinion. Further, based on our estimates, the annualized EBITDA from the entire pipeline of 6.9GW will amount to ~INR81b postcommissioning. We are currently modeling 0.45GW/1.9GW/0.83GW of capacity to be commissioned in FY26/FY27/FY28. Overall, Acme has a total operational + under construction + pipeline of 6.9GW, which we expect to be commissioned by the end of FY29.

Outlook

We continue to value Acme at 10x FY28E EBITDA (discounted by one year) to arrive at our TP of INR347, implying 40% potential upside.