ACMESOLAR - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.2
| Stock Code | ACMESOLAR | Market Cap | 17,643 Cr. | Current Price | 291 ₹ | High / Low | 324 ₹ |
| Stock P/E | 53.9 | Book Value | 81.7 ₹ | Dividend Yield | 0.07 % | ROCE | 9.27 % |
| ROE | 6.89 % | Face Value | 2.00 ₹ | DMA 50 | 276 ₹ | DMA 200 | 257 ₹ |
| Chg in FII Hold | -0.43 % | Chg in DII Hold | 0.18 % | PAT Qtr | 266 Cr. | PAT Prev Qtr | 31.7 Cr. |
| RSI | 48.5 | MACD | 0.02 | Volume | 8,87,746 | Avg Vol 1Wk | 12,65,838 |
| Low price | 196 ₹ | High price | 324 ₹ | PEG Ratio | 0.61 | Debt to equity | 0.86 |
| 52w Index | 74.2 % | Qtr Profit Var | 2,760 % | EPS | 5.61 ₹ | Industry PE | 28.5 |
📊 Financials: ACME Solar shows moderate fundamentals with ROE at 6.89% and ROCE at 9.27%, reflecting limited efficiency. Debt-to-equity is relatively high at 0.86, indicating leveraged operations. Quarterly PAT surged to ₹266 Cr. from ₹31.7 Cr., showing a massive 2,760% variance. EPS stands at ₹5.61, but margins remain thin relative to valuation.
💰 Valuation: The stock trades at a P/E of 53.9 compared to the industry average of 28.5, suggesting overvaluation. P/B ratio is ~3.56 (Price ₹291 / Book Value ₹81.7). PEG ratio of 0.61 indicates reasonable growth-adjusted valuation. Intrinsic value appears lower than current price, making entry less attractive at present levels.
🏢 Business Model: ACME Solar operates in renewable energy, focusing on solar power generation. Its competitive advantage lies in scale, government support for renewables, and rising demand for clean energy. However, profitability metrics and high leverage limit overall health.
📈 Entry Zone: A more attractive entry would be near ₹220–250, closer to its 52-week low. Current valuation is stretched. Long-term holding is favorable given industry tailwinds, but investors should wait for better valuation levels before fresh entry.
Positive
- 📌 Strong quarterly profit growth (2,760% variance)
- 📌 PEG ratio of 0.61 indicates fair growth-adjusted valuation
- 📌 Rising demand for renewable energy supports business model
Limitation
- ⚠️ High P/E ratio (53.9) vs industry average (28.5)
- ⚠️ Weak ROE (6.89%) and ROCE (9.27%)
- ⚠️ High debt-to-equity ratio (0.86)
- ⚠️ Very low dividend yield (0.07%)
Company Negative News
- 📉 Decline in FII holdings (-0.43%) indicates reduced foreign investor confidence
Company Positive News
- 📈 Increase in DII holdings (+0.18%) shows domestic institutional support
- 📈 Strong rebound in quarterly PAT
Industry
- 🏦 Industry PE at 28.5, lower than ACME Solar’s valuation
- 📊 Renewable energy sector benefits from government incentives and rising demand
Conclusion
🔎 ACME Solar is fundamentally overvalued with weak return metrics despite strong quarterly profit growth. Entry is advisable only near ₹220–250. Long-term holding is favorable given renewable energy demand, but investors should be cautious about leverage and valuation risks.
Would you like me to also prepare a valuation comparison chart between ACME Solar and renewable energy peers to highlight its relative positioning?