Zumedha Insights
ACME Solar Holdings Ltd (NSE: ACMESOLAR) – Stock Analysis
Renewable independent power producer (IPP) – solar, wind, hybrid, FDRE and battery storage (BESS)
ACME Solar Holdings Ltd (NSE: ACMESOLAR) is a pure-play Indian renewable IPP that has pushed into firm-and-dispatchable power and merchant battery storage. This stock analysis tests the ACME Solar share price target debate with a DCF, relative valuation, NAV, EPV and SOTP. At a CMP of ₹436, the Weighted Fair Value works out to about ₹370 per share, after adjusting for recent news and market sentiment.
Business Overview
ACME Solar develops, owns and operates solar, wind, hybrid and FDRE (firm and dispatchable renewable energy) projects that sell power to central off-takers such as SECI, NTPC, NHPC and SJVN under long-term PPAs. Operational renewable capacity is about 3,057 MW, with more than 4 GWh of battery storage now operating, and a PPA-signed construction pipeline of roughly 3,880 MW.
The model is capital-intensive but highly predictable: contracted tariffs, EBITDA margins near 87–90%, and debt costing about 8.4% for operating projects. The newer leg is BESS – first merchant and short-term battery sales, then FDRE hybrids where batteries firm up solar and wind output. That shifts the story from plain megawatts to higher-value, dispatchable energy.
Historical Financials
| ₹ crore | Q1 FY26 | Q1 FY27 | YoY |
|---|---|---|---|
| Total revenue | 584 | 954 | +63.3% |
| EBITDA | 531 | 831 | +56.5% |
| EBITDA margin | 90.9% | 87.1% | –3.8 pts |
| PAT | 131 | 235 | +79.9% |
| Highest-ever quarterly CUF | – | 30.9% | Record |
| Consolidated, ₹ crore | FY25 | FY26 | Growth |
|---|---|---|---|
| Revenue from operations | 1,405 | 2,023 | +44.0% |
| PAT | – | ~498 | Nearly doubled |
The margin dip in Q1 FY27 comes from purchased charging power booked inside BESS operating costs; BESS EBITDA margin was 82% on ₹226 crore revenue. Net debt rose to ₹12,600 crore from ₹7,842 crore as construction capex of about ₹2,958 crore was spent in the quarter, yet net debt to TTM operational EBITDA eased to 2.9x after the QIP inflow.
Source: company Q1 FY27 results and presentation (29–30 Jul 2026); FY26 PAT per press coverage – verify against the audited filing. The standalone entity houses in-house EPC revenue and is not comparable with the consolidated power business.
DCF Valuation
10-Year FCFF DCF – WACC 12%, terminal growth 5%
Operating EBITDA is projected to rise from about ₹3,500 crore in FY27 to ₹9,600 crore by FY36 as 3,880 MW of PPA-signed projects and the BESS pipeline commission. Capex front-loads at ₹7,500 crore a year in FY27–28 before dropping to maintenance levels.
| Year | EBITDA | Tax on EBIT | Capex | FCFF | PV @12% |
|---|---|---|---|---|---|
| FY27E | 3,500 | 665 | 7,500 | -4,665 | -4,165 |
| FY28E | 5,200 | 988 | 7,500 | -3,288 | -2,621 |
| FY29E | 6,500 | 1,235 | 5,500 | -235 | -167 |
| FY30E | 7,200 | 1,368 | 2,500 | 3,332 | 2,118 |
| FY31E | 7,600 | 1,444 | 1,500 | 4,656 | 2,642 |
| FY32E | 8,000 | 1,520 | 1,500 | 4,980 | 2,523 |
| FY33E | 8,400 | 1,596 | 1,500 | 5,304 | 2,399 |
| FY34E | 8,800 | 1,672 | 1,500 | 5,628 | 2,273 |
| FY35E | 9,200 | 1,748 | 1,500 | 5,952 | 2,146 |
| FY36E | 9,600 | 1,824 | 1,500 | 6,276 | 2,021 |
| Terminal value (g 5%) | PV of TV: 26,428 | 82,080 | 26,428 | ||
| Bridge (₹ crore) | Value |
|---|---|
| PV of 10-year FCFF | 9,168 |
| PV of terminal value | 26,428 |
| Enterprise value | 35,596 |
| Less: net debt (Q1 FY27, incl. CWIP debt) | –12,600 |
| Equity value | 22,996 |
| Shares (crore) | 70.7 |
| DCF value per share | ₹325 |
DCF sensitivity (₹ per share)
| WACC \ terminal g | 4% | 5% | 6% |
|---|---|---|---|
| 11% | ₹370 | ₹442 | ₹543 |
| 12% | ₹275 | ₹325 | ₹392 |
| 13% | ₹203 | ₹238 | ₹284 |
Terminal value contributes about 74% of enterprise value, so small changes in WACC or terminal growth move the answer materially. The 12% WACC is the standing Zumedha default; for contracted infrastructure funded at 8–9%, a lower discount rate would be argued, which the sensitivity table shows. Execution timing and debt funding are the swing factors.
Relative Valuation & Peer Multiples
| Metric | At CMP | Reference band applied* | Implied value / share |
|---|---|---|---|
| EV / EBITDA (FY27E ₹3,500 cr) | 12.4x | 11.5x | ₹391 |
| EV / EBITDA (FY28E ₹5,200 cr) | 8.3x | – | Needs further debt; not used |
| P / B (approx.) | ~3x | – | Cross-check only |
Operating renewable platforms have generally traded in a wide EV/EBITDA band; the 11.5x applied here is a Zumedha analyst assumption anchored to a discount for construction and leverage risk, not a live peer quote. Larger, lower-leverage renewable peers would typically command higher multiples, while balance-sheet stress would compress them.
*Reference band is an analyst assumption. Check live peer multiples (NTPC Green, Adani Green, JSW Energy) before relying on this.
Earnings Power Value (EPV)
| ₹ crore | Value |
|---|---|
| Run-rate EBITDA (Q1 FY27 × 4) | 3,324 |
| Less: D&A at 24% of EBITDA | 798 |
| EBIT | 2,526 |
| NOPAT at 25% tax | 1,894 |
| EPV enterprise value at 12% | 15,786 |
| Less: operational net debt | 7,550 |
| Equity value | 8,236 |
| Per share | ₹117 |
EPV values only today’s earnings with zero growth, so it understates a company adding capacity. CWIP-linked debt of ₹5,050 crore is treated as offset by the capital already invested in projects.
Sum-of-the-Parts (SOTP)
| Segment | Basis | EV (₹ cr) |
|---|---|---|
| Operational RE portfolio | ₹2,500 cr EBITDA × 11x | 27,500 |
| Operational BESS | ₹900 cr EBITDA × 9x | 8,100 |
| Under-construction / CWIP | At cost (net debt ₹5,050 cr + equity ~₹2,450 cr) | 7,500 |
| Total EV | 43,100 | |
| Less: net debt | 12,600 | |
| Equity value | 30,500 | |
| Per share | ₹431 |
Segment EBITDA splits are analyst estimates built from the Q1 FY27 mix and the BESS commissioning schedule; they should be revisited when Q2 FY27 numbers are reported.
Weighted Fair Value & Buy Range
| Method | Value / share | Weight | Contribution |
|---|---|---|---|
| DCF (FCFF) | ₹325 | 25% | ₹81 |
| Relative valuation | ₹391 | 30% | ₹117 |
| Asset-based / NAV | ₹175 | 5% | ₹9 |
| Earnings Power Value | ₹117 | 5% | ₹6 |
| SOTP | ₹431 | 35% | ₹151 |
| Weighted value (pre-overlay) | ₹364 | 100% | ₹364 |
| News / sentiment overlay (+2%) | ₹7 | ||
| Weighted Fair Value | ₹370 |
News and sentiment overlay. Positives: steady project commissioning, BESS short-term contracts locking in over ₹1,400 crore of FY27 revenue, fresh debt tie-ups, and several broker targets between ₹410 and ₹458. Negatives: higher net debt, execution and timing risk (a Northeast Railway PPA signing was delayed), a seasonally weak Q2, and a stock price that has already run about 100% in eight months. Net adjustment: +2%.
Buy range
These zones are derived mechanically from the Weighted Fair Value of ₹370. At the reference CMP of ₹436 (06 Oct 2026), the stock sits above the fair-value zone by about 17%.
Buy Scenario – Bear, Base and Bull
Bear case
₹295Delays in commissioning, tariff pressure in merchant BESS and a higher cost of debt keep valuation multiples compressed.
Probability 25%Base case
₹390Projects commission broadly on schedule; BESS contributes meaningfully and leverage stays under the 5.5x guardrail.
Probability 50%Bull case
₹500Faster FDRE and BESS ramp, merchant BESS pricing holds, and lower cost of capital re-rates the platform.
Probability 25%The probability-weighted value across the three cases is about ₹395 per share, against a CMP of ₹436.
Sell Range
The sell range marks levels at which the market price would be regarded as materially ahead of fundamentals. It is a valuation lens, not an instruction to transact.
Sell Scenario
Overvalued
₹410+Price more than 10% above Fair Value; the stock would be regarded as fully priced unless estimates are revised upward.
Exit trigger
₹485+A move this far above Fair Value would price in near-perfect commissioning, stable merchant BESS spreads and cheap capital.
Structural break
₹260A sharp fall in merchant BESS realisations, PPA cancellations or financing stress would damage the equity thesis.
Future Growth
| Driver | What it adds |
|---|---|
| PPA-signed pipeline | 3,880 MW under construction, 85% debt tied up |
| BESS scale-up | 4+ GWh operating; target of contracting full FY27 capacity |
| FDRE and hybrids | Higher-value firm power; ₹6,000 cr+ debt tied up with REC and PFC for 700 MW |
| Policy support | Company expects recent regulatory changes to be supportive |
Management has indicated that net debt to run-rate EBITDA is to be held under about 5.5x on an operational basis. If capacity is delivered on time, EBITDA in FY28 could be about 1.5x FY27 on the Zumedha estimate, which is why valuation methods that look only at today’s earnings give much lower values than forward methods.
Risks & Catalysts
Catalysts
- Commissioning of the 300 MW solar + 100 MW wind hybrid and 300 MW / 1,200 MWh FDRE project by Q3 FY27
- Q2 FY27 results in early-to-mid November
- Full contracting of FY27 BESS capacity
- New PPA signings, including Northeast Railway
Risks
- Net debt of ₹12,600 crore and continued heavy capex
- Merchant BESS price risk and seasonally weaker Q2
- Counterparty and PPA-signing delays
- Valuation already reflects a strong run-up
Institutional Ownership
| Category | Holding (early Oct 2026) |
|---|---|
| Promoters | 71.40% |
| Institutions | 23.49% |
| Non-institutions | 5.11% |
Promoters hold a commanding stake, with institutions owning close to a quarter of the company after the June 2026 QIP. A stable promoter holding is consistent with long-term alignment, although the smaller free float can amplify price swings.
A named top-10 institutional holder table could not be sourced reliably, so it is omitted rather than estimated. Scheme-wise and FPI-wise detail is available in the BSE/NSE shareholding filings; figures may lag the live quarter.
Final Summary
Final Summary
Valuation. The weighted analysis points to a Fair Value of about ₹370 per share against a CMP of ₹436, a premium of roughly 17%. Forward-looking methods (SOTP, relative) land near or just below the market price, while DCF and EPV at a 12% discount rate sit well below it.
Growth. The business is moving from plain solar and wind toward firm, dispatchable and battery-backed power. Delivery of the 3,880 MW pipeline and BESS contracts is the central driver, with leverage as the main constraint.
What a reader may consider. On this analysis, the current price would be viewed as already discounting a large part of the growth. A reader with a long horizon and tolerance for construction and financing risk may monitor the ₹355–₹410 band as a fair-value area, and track commissioning updates, net debt to EBITDA, and BESS realisations. This is not investment advice.
Frequently Asked Questions
What is the ACME Solar share price target?
Is ACME Solar overvalued at ₹436?
What drives ACME Solar’s growth?
What are the main risks for ACME Solar?
Disclaimer: This report is for educational and informational purposes only and is not investment advice. Zumedha Insights is not a SEBI-registered investment adviser. Equity investments are subject to market risk, and data is from third-party sources and may be dated. Consult a registered adviser before investing. Full disclaimer