Sustained capacity addition, PPA tie ups improve revenue visibility for Acme Solar
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The stock of Acme Solar Holdings , a renewable energy producer, has gained 18% on bourses in a month following strong fourth quarter performance in terms of double digit revenue and profit growth and improved power generation. The company continues to expand the operational capacity of its projects, which is fully tied up to long term power purchase agreements (PPA) with central and state government agencies thereby offering revenue visibility. Analysts anticipate a strong revenue and profit growth annually between FY25 and FY28.The company builds, owns, and operates renewable energy projects in solar, wind, hybrid and firm and dispatchable renewable energy (FDRE) categories. FDRE offers firm power supply at higher capacity utilisation factor (CUF) compared with solar and wind projects.On June 10, Acme announced commissioning of 75 megawatts (MW) of renewable energy capacity at its project in Sikar, Rajasthan, which follows a 165 MW addition in May taking the commissioned capacity to 240 MW out of planned capacity of 300 MW. This has also enhanced its total operational capacity to 2,806 MW as of June 10, 2025 from 1,340 MW a year ago. It has another 4,164 MW of capacity at various stages of implementation, which is expected to be commissioned by FY28.In FY25, the company's power generation increased by 55.2% to 4,013 million units, driven by improved operational capacity and an increase in CUF to 25.6% in FY25 from 23.6% in the previous year. The company monetised 369 MW of assets in FY25. Excluding that, revenue grew by 32.3% year-on-year to Rs1,575 crore while net profit surged nearly four times to Rs 251 crore in FY25.Acme's asset base expanded by 36% to Rs15,507 crore while net worth grew by 74% to Rs4,509 crore, helped by an initial public offering (IPO) in November wherein it raised Rs 2,395 crore of fresh equity.The stock has been under pressure since its public listing on November 13, mostly trading below the offer price of Rs 289 given the hangover of additional stake sale by the promoter group to reduce its holding from 83.4% to 75% or below to abide by the regulatory requirement.'Given the company's discernible execution performance and visibility on upcoming capacity, we estimate revenue and EBITDA to grow by 54% and 57% over FY25-28,' stated JM Financial Research in a report. It has a buy call on ths tock with a target price of Rs270. The stock was last traded at Rs252.8 on Tuesday on the BSE.
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