⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
ACMESOLAR - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.5
| Stock Code | ACMESOLAR | Market Cap | 13,210 Cr. | Current Price | 218 ₹ | High / Low | 324 ₹ |
| Stock P/E | 255 | Book Value | 76.2 ₹ | Dividend Yield | 0.09 % | ROCE | 7.63 % |
| ROE | 5.18 % | Face Value | 2.00 ₹ | DMA 50 | 229 ₹ | DMA 200 | 247 ₹ |
| Chg in FII Hold | -1.54 % | Chg in DII Hold | 0.48 % | PAT Qtr | 31.7 Cr. | PAT Prev Qtr | 29.4 Cr. |
| RSI | 46.8 | MACD | -3.99 | Volume | 3,63,828 | Avg Vol 1Wk | 6,10,929 |
| Low price | 172 ₹ | High price | 324 ₹ | PEG Ratio | 4.61 | Debt to equity | 0.64 |
| 52w Index | 30.2 % | Qtr Profit Var | 2,394 % | EPS | 0.88 ₹ | Industry PE | 25.4 |
📊 Core Financials
- Revenue & Profitability: PAT improved slightly from 29.4 Cr. to 31.7 Cr., but EPS remains very low at ₹0.88.
- Margins: ROE at 5.18% and ROCE at 7.63% are weak, reflecting limited efficiency.
- Debt: Debt-to-equity ratio of 0.64 indicates moderate leverage, adding financial risk.
- Cash Flow: Earnings are inconsistent, raising concerns about sustainable cash generation.
💹 Valuation Indicators
- P/E Ratio: 255 vs. industry average of 25.4 — extremely overvalued.
- P/B Ratio: Current price (₹218) vs. book value (₹76.2) → ~2.9x, moderately expensive.
- PEG Ratio: 4.61, suggesting growth is priced at a very high multiple.
- Intrinsic Value: Current valuation far exceeds fundamentals, indicating overpricing.
🏢 Business Model & Competitive Advantage
- Acme Solar operates in renewable energy, a sector with strong long-term demand potential.
- Competitive advantage lies in early positioning within solar energy, but profitability remains weak.
📈 Technicals & Entry Zone
- DMA 50 (₹229) and DMA 200 (₹247) are above current price, showing weakness.
- RSI at 46.8 indicates neutral momentum; MACD negative suggests bearish sentiment.
- Entry Zone: Attractive only if price corrects closer to ₹170–185 range, aligning with fundamentals.
- Long-Term Holding: Risky unless earnings improve significantly; better to wait for consistent profitability.
✅ Positive
- Operates in renewable energy, a sector with long-term growth potential.
- Quarterly PAT growth (+2,394% YoY) shows improvement from a low base.
- DII holdings increased (+0.48%), showing some domestic institutional support.
⚠️ Limitation
- Extremely high P/E ratio (255) compared to industry average.
- Weak ROE (5.18%) and ROCE (7.63%).
- Moderate debt-to-equity ratio (0.64) adds financial risk.
📉 Company Negative News
- FII holdings decreased (–1.54%), signaling reduced foreign investor confidence.
- Stock trading below DMA 50 and DMA 200, showing technical weakness.
📈 Company Positive News
- Quarterly PAT improved slightly, showing operational progress.
- Institutional domestic support increased (+0.48%).
🏭 Industry
- Renewable energy industry is poised for long-term growth due to government support and rising demand.
- Industry average P/E (25.4) highlights Acme Solar’s extreme overvaluation.
🔎 Conclusion
- Acme Solar is fundamentally weak with low profitability and high debt.
- Valuations are stretched far beyond industry averages, making it risky.
- Recommendation: Avoid fresh entry at current levels; consider only if price corrects to ₹170–185 and earnings stabilize. Long-term holding viable only with significant improvement in profitability.