ACME Solar remains poised to continue benefiting from its stable and predictable revenue streams, which are supported by long-term power purchase agreements (PPAs) with central and state-level utilities.
The company remains well-positioned within the rapidly growing renewable energy landscape in India.
Currently, the company has 5.1 GW of renewable capacities in hand, which are under construction.
What is also encouraging is that the company has already managed to secure transmission connectivity for almost the entire pipeline.
As projects move from the construction phase to the operational phase, the company can expect a substantial increase in its generation and profitability.
Another important catalyst mentioned by the brokerage is battery energy storage solutions (BESS). With the rising focus on renewable energy sources in India, energy storage solutions are becoming increasingly important for managing power on the grid.
The accelerated expansion of ACME Solar’s BESS solutions could offer incremental revenue opportunities to the company.
The brokerage points out that the adoption of BESS in ACME’s schemes could potentially lead to upside in earnings estimates over the next few years as policy support and storage tenders start to gain momentum.
At the industry level, MOSL highlights that the competitive landscape of independent power producers (IPPs) is changing. This is because developers are increasingly focusing on hybrid solutions, integrated renewable portfolios, and storage-based projects to address the evolving needs of utilities and grid operators.
ACME Solar appears to be well-placed within this transition as it has the execution capabilities, diversified portfolio of renewables, and focus on new technologies such as energy storage.
Overall, MOSL remains constructive on ACME Solar’s growth trajectory, highlighting strong capacity addition visibility, stable contracted revenues, and optionality from storage solutions.
With a large under-construction pipeline and improving industry dynamics, the brokerage believes ACME Solar is well placed to deliver sustained earnings growth over the medium term, supporting its Buy recommendation with a target price of Rs 341.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
