ACMESOLAR - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.1

📊 Fundamental & Valuation Analysis

ACME Solar Holdings is a fast-growing renewable energy company with a strong pipeline and ambitious expansion plans. However, its financial structure and valuation warrant a balanced view.

🔍 Key Metrics

Metric Value Interpretation

ROE 7.5% Moderate, room for improvement

ROCE 8.4% Below ideal for capital-intensive sector

PEG Ratio 0.88 Undervalued relative to growth potential

Dividend Yield 0.07% Negligible income generation

Debt-to-Equity 2.43 High leverage, risk factor

P/E Ratio 42.5 Fair vs industry PE of 41.2

Price-to-Book ~3.85 Slightly expensive on book basis

📈 Growth & Profitability

PAT Growth: ₹143 Cr vs ₹132 Cr — steady improvement

Revenue Growth: 71% YoY in Q1FY26

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EBITDA Margin: ~90% — excellent operational efficiency

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Capacity Expansion: Operational capacity up 116% YoY to 2,890 MW

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📉 Technical & Trend Analysis

Current Price: ₹287

RSI: 59 — neutral to slightly bullish

MACD: +8.74 — bullish crossover

DMA 50/200: ₹260 / ₹240 — trading above both

Volume: Above average — strong buying interest

📌 Ideal Entry Price Zone

Support Levels: ₹260 and ₹240

Fair Entry Range: ₹265–₹280

Below ₹280 offers better risk-reward

Avoid entry above ₹300 unless breakout confirmed

🧭 Exit Strategy & Holding Period

If you already hold the stock

✅ Hold If

You believe in India’s renewable energy boom

You trust management’s 10GW solar + 15GWh BESS target by FY30

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You’re comfortable with high debt and cyclical cash flows

🚪 Exit Strategy

Short-Term Exit: If price rallies near ₹320–₹350 without earnings support

Hold Period: 3–5 years to benefit from capacity ramp-up and margin expansion

Re-evaluate: If ROE stagnates below 8% or debt-to-equity exceeds 3.0

🧠 Final Verdict

ACME Solar is a high-growth renewable play with strong execution and a robust order book. While debt levels are elevated, the PEG ratio and EBITDA margins suggest undervalued potential. Ideal for long-term investors who can tolerate volatility and believe in the clean energy transition.

Would you like a comparison with Adani Green or NTPC Green to evaluate sector positioning?

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The Financial Express

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