Green Energy Stock with ₹17,000 Cr Capex Plans: A Potential 70% Upside Investment
India’s green energy sector is experiencing rapid growth, driven by government initiatives and increasing adoption of solar power. Among the frontrunners in this revolution is ACME Solar Holdings Ltd, a company with ambitious expansion plans and strong financial backing. With a ₹17,000 crore Capex plan, ACME Solar aims to significantly boost its renewable energy capacity, making it a stock to watch for investors seeking high-growth opportunities.
India’s Renewable Energy Boom
India’s transition towards green energy has been remarkable. Over the past decade, solar power capacity has increased 30 times, rising from 2.5 GW in 2014 to 94.16 GW by November 2024. The government’s aggressive push, including initiatives like the International Solar Alliance (ISA), has positioned India as a global leader in renewable energy. ACME Solar is leveraging this momentum to strengthen its foothold in the sector.
ACME Solar’s ₹17,000 Cr Capex Plan
ACME Solar recently announced an ambitious capital expenditure (Capex) plan worth ₹17,000 crore to expand its renewable energy capacity to 5 GW by FY26. The company’s CEO, Nikhil Dhingra, revealed plans to diversify into nuclear energy alongside solar expansion. ACME Solar aims to scale its solar capacity to 3.5 GW by 2026, 7 GW by 2027, and ultimately 10 GW by 2030.
Dhingra emphasized the company’s strategy to focus on revenue and margin accretive Hybrid and FDRE Renewable Energy projects to strengthen its business model. This strategic shift is expected to boost profitability and long-term growth prospects.
Operational Capacity & Earnings Growth
As of FY25, ACME Solar’s total project portfolio stands at 6,970 MW, with:
- 2,540 MW operational capacity
- 4,430 MW under development
- 49% focused on hybrid and FDRE projects
The company’s operational assets are expected to generate an annual EBITDA of ₹1,750 – ₹1,800 crore, ensuring stable cash flows. Additionally, its power purchase agreements (PPAs) are well-diversified:
- 67% of sales to central government entities
- 33% of sales to state governments
Stock Price & Potential Upside
On Monday, shares of ACME Solar closed at ₹188.2, reflecting a slight dip of 2.5% from the previous close of ₹193.10. However, leading brokerage Nuvama remains highly bullish on the stock. The firm has assigned a “Buy” rating with a target price of ₹328 per share, representing an impressive 74% upside from current levels.
Financial Performance Overview
The company has delivered strong financial performance, with significant growth in key metrics:
| Financial Metric | Q3FY24 | Q3FY25 | YoY Growth |
|---|---|---|---|
| Net Profit | ₹44 Cr | ₹112 Cr | +152% |
| Revenue | ₹332 Cr | ₹349 Cr | +5.2% |
| EBITDA | ₹310 Cr | ₹359 Cr | +15.7% |
These numbers indicate robust earnings growth and improving profitability, making ACME Solar an attractive investment option.
Stock Valuation & Key Ratios
Below are some key valuation metrics and financial ratios for ACME Solar Holdings Ltd:
| Metric | Value |
|---|---|
| Market Cap | ₹11,330 Cr |
| Current Price | ₹187 |
| 52-Week High / Low | ₹292 / ₹168 |
| Stock P/E | 92.1 |
| Book Value | ₹32.4 |
| Dividend Yield | 0.00% |
| ROCE (Return on Capital Employed) | 8.41% |
| ROE (Return on Equity) | 5.48% |
| Debt-to-Equity Ratio | 5.46 |
| Price-to-Book Value | 5.79 |
| Intrinsic Value | ₹132 |
| Graham Number | ₹221 |
| RSI (Relative Strength Index) | 41.5 |
| Debt | ₹10,698 Cr |
| 200-Day Moving Average (DMA) | ₹238 |
While the stock’s P/E ratio of 92.1 indicates it is trading at a premium, strong future growth prospects justify this valuation.
Why Should Investors Consider ACME Solar?
- Aggressive Growth Plans – The ₹17,000 Cr Capex will drive capacity expansion, revenue growth, and profitability.
- Strong Industry Tailwinds – Government support for renewable energy is a major catalyst for future growth.
- High Potential Upside – A 74% upside from current levels makes it a compelling buy.
- Stable Earnings & Cash Flows – A well-diversified portfolio ensures consistent revenue streams.
- Entry into Hybrid & FDRE Projects – Higher-margin projects will enhance profitability.
Conclusion
With the Indian government pushing for 100% renewable energy adoption and companies like ACME Solar leading the charge, this stock presents a lucrative long-term investment opportunity. Backed by strong fundamentals, an ambitious expansion plan, and a bullish price target from analysts, ACME Solar Holdings Ltd is a green energy stock to buy now for a potential 70% upside.
For more market insights, follow our news.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resource like ET, NSE India.
Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.