Buy Acme Solar Holdings; target of Rs 520: ICICI Securities

Moneycontrol • 2 days ago

Original source

Key Investment Pillars

  • Acme Solar's strategy to scale up its BESS portfolio is yielding strong results, contributing 72% of incremental YoY EBITDA increase.
  • The company has accelerated its BESS commissioning roadmap to 12GWh by FY27 and has locked in short-term market revenues of INR 16bn/INR 15bn for FY27/FY28.
  • Progress on PPA tie-ups remains encouraging, with 0.8GW tied up during the quarter, translating into incremental EBITDA of ~INR 8-9bn.
  • Acme has increased its capacity target to 15GW (50GWh) by 2030 from 10GW (25GWh) earlier and has introduced a target of 20GW (70GWh) by 2032.

Thesis Validation Checklist

  • Investors should watch for Acme's ability to maintain its BESS commissioning roadmap and increase its renewable energy capacity.
  • Progress on PPA tie-ups and the company's ability to capture tariff arbitrage will be key signals to validate the thesis.
  • Any delays in PPA signing, execution of under-construction capacity, or operational underperformance of BESS projects could challenge the thesis.