Why Is ACME Solar Attracting Attention With Record-Low Tariffs?
Brokerage house Nuvama has turned constructive on ACME Solar, assigning a target price of ₹360, backed by a bullish view on its execution and growth visibility. The optimism comes on the heels of ACME securing a record-low tariff for a hybrid solar and battery energy storage (BESS) project, positioning the company at the forefront of India’s renewable energy transition.
About ACME Solar
ACME Solar is one of India’s largest independent renewable power producers with a portfolio spanning solar, hybrid, and energy storage projects. Known for its aggressive participation in competitive bidding, the company has consistently secured projects at benchmark tariffs while maintaining profitability through efficient capital allocation and integrated infrastructure strategies.
Record-Low Solar + BESS Tariff
ACME Solar recently achieved a milestone by securing a levelized tariff of ₹2.76/kWh at the Rewa Ultra Mega Solar Limited (RUMSL) Unit-2 project. This 220 MW project combines solar generation with battery energy storage (BESS), enabling round-the-clock green power supply. The tariff is significant not only for its competitive edge but also for signaling India’s progress in cost-effective renewable integration.
Robust IRR and Financial Outlook
Nuvama estimates mid-to-high teens Internal Rate of Return (IRR) for the project, supported by low capex and innovative tariff design. One standout feature is free night charging from Madhya Pradesh, ensuring that the discharge tariff remains unchanged and project economics stay resilient even in fluctuating demand environments.
Growth Projections: FY25–FY28
Looking ahead, Nuvama expects ACME Solar to deliver strong growth across multiple parameters:
- 40% capacity CAGR between FY25 and FY28.
- 57% Operating Cash Flow (OCF) CAGR during the same period.
- Increased contribution from FDRE (Firm & Dispatchable Renewable Energy) and hybrid projects, expected to reach 49% by FY28.
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Why the Hybrid Model Matters
Hybrid renewable energy projects, which combine solar or wind with storage solutions, provide more reliable and dispatchable power. This ensures that utilities and industrial buyers can secure green power even during non-solar hours. For ACME Solar, an increasing share of FDRE and hybrids means reduced volatility in earnings and stronger long-term contracts.
Investor Takeaway
Nuvama’s bullish stance on ACME Solar rests on strong project economics, industry-leading tariffs, and aggressive capacity expansion. The combination of high IRR potential, scalable hybrid projects, and robust cash flow projections makes ACME a standout in India’s renewable landscape. Investors should monitor execution progress and policy support as key variables driving performance.
Find more in-depth renewable energy insights and investment analysis at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
