Target: ₹363
CMP:₹285.25
ACME Solar’s operational capacity is set for a step-change growing from 2,540 MW in FY25 to 6,270 MW by FY28E, as firm and dispatchable renewable energy (FDRE) projects progressively commission. We expect a revenue/ EBITDA/PAT CAGR of 71 per cent/70 per cent/77 per cent respectively as the mix shift toward higher-tariff, higher CUF FDRE driving EBITDA per MW from ₹64 lakh to ₹1.34 crore by FY30E with FDRE contributing 57 per cent of consolidated EBITDA by FY28E rising to 70 per cent by FY30E.
ACME holds the largest FDRE contracted pipeline at 4,031 MW, with 2,980 MW already converted into firm PPAs with government-backed counterparties. Project-level equity IRRs are compelling with 25 per cent for Assured Peak, 20 per cent for Peak-Only, and 16 per cent for RTC. These returns have structural upside from post-commissioning debt refinancing and battery cost deflation, every $10/kWh decline in BESS costs adds 150-300 bps to equity IRRs.
We value ACME at 10.5x FY28E EV/EBITDA, arriving at a target price of ₹363. This multiple is backed by a DCF valuation and translates into an implied 3x FY28E P/BV, which appropriately reflects the sharp improvement in return profile (FY28E at 23 per cent ROE) as high-CUF, high-tariff FDRE assets scale. At current levels, the stock trades at a discount to renewable peers despite superior 70 per cent/77 per cent EBITDA/PAT CAGR and the largest FDRE pipeline in India. We initiate coverage with a BUY rating.