ACME Solar Holdings Limited

Utilities — Utilities - Renewable · NSE

₹410.05+₹2.45 (+0.60%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by high debt relative to equity, negative free cash flow.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:47 pm

Understanding the Business

Company site ↗

The 60-second version of ACME Solar Holdings Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

ACME Solar Holdings Limited, a solar independent power producing company, engages in the develops, constructs, owns, operates, and maintains grid-connected renewable energy projects in India.

IndustryUtilities - Renewable

SectorUtilities

Employees947

Annual revenue₹2,023 Cr

How does it make money?

Turns over ₹2,023 Cr a year. Of every ₹100 of sales, about ₹25 reaches shareholders as profit, with ₹105 left at the operating level before interest, tax and depreciation. Each of its 947 employees supports ₹2.14 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.14 Cr

Who are its competitors?

The closest listed comparisons in its industry are NTPC LTD, POWER GRID CORP. LTD., TATA POWER CO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 7.0% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE13.7%

What is the outlook?

12 analysts covering the stock expect revenue to grow about 80.7% and earnings to grow about 89.1% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+80.7%

Est. earnings growth+89.1%

Analysts12

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +56% while net margin moved -10263% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+56%

Margin effect-10263%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Debt/Equity of 3.93x is high — earnings must service borrowings before shareholders see anything
✓ Current ratio of 2.17 — short-term bills are well covered
✗ Free cash flow is negative — growth is being funded by borrowing or fresh equity
✗ Interest cover of only 1.6x — little room if profits dip
✗ Debt has grown 30.2% a year — worth checking what it bought

Quality vs. Valuation

Company Quality

65/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

40/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

42.3x

2Y Median

50.3x

25 monthly readings · mean 45.4x · range 16.6x–84.0x

Sector Median

14.6x

median of 3 sector peers

🟢Current valuation is approximately 16% below its 2y median of 50.3x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 189% above the peer median of 14.6x.

vs. its own history

Fair

50.3x median over 25 months · -16%

vs. sector peers

Expensive

14.6x median of 3 peers · +189%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

22.3x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 95.2% to 105.2% over 3 years.
Return on equity is rising
ROE has improved from -0.2% to 9.9%.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

5 items require attention · 5 high

🔴Debt has risen sharplyFinancial
Total debt is up 121% over 3 years, from ₹9,014 Cr to ₹19,896 Cr.
🔴High leverageFinancial
Debt/Equity of 3.93x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.6x — little room if earnings dip.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 95.2% to 105.2%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 9.3x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
A premium to the sector to defend
It trades 189% above the peer median. That premium needs a reason that persists, or it closes.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Several serious flags at once
5 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 12% a year✓ 16.0% CAGR
Latest reported year was 46.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 103%✓ 105.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 9.3x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹4,073 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 1.6x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 4 neutral · 4 weak

Market Cap

₹28,961 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

42.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

4.91x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹9.69

Profitable

Profitable on a per-share basis

ROE

9.9%

Moderate

Moderate capital efficiency

ROCE

7.0%

Weak

Low return on total capital employed

Debt/Equity

3.93x

High

High leverage

Revenue Growth (YoY)

46.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

71.5%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.05%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹4,073 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

17.0x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

67.6%

Good

Healthy core-business profitability

Net Margin

21.1%

Good

Strong bottom-line conversion

Current Ratio

2.17

Comfortable

Healthy short-term liquidity

52W Range Position

76%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

433.1 / 409.2

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

32.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,294 Cr	₹1,319 Cr	₹1,405 Cr	₹2,023 Cr	+16.0%
EBITDA	₹1,232 Cr	₹1,235 Cr	₹1,401 Cr	₹2,129 Cr	+20.0%
EBITDA Margin	95.2%	93.6%	99.7%	105.2%	—
PAT (Net Profit)	-₹3 Cr	₹698 Cr	₹252 Cr	₹499 Cr	—
EPS	₹-0.05	₹11.53	₹4.53	₹8.16	—
ROE	-0.2%	26.9%	5.6%	9.9%	—
ROCE	7.0%	13.9%	6.4%	7.0%	—
Total Debt	₹9,014 Cr	₹8,536 Cr	₹10,976 Cr	₹19,896 Cr	+30.2%
Free Cash Flow	₹495 Cr	-₹1,389 Cr	-₹1,723 Cr	-₹4,073 Cr	—

🟢 Revenue has grown at 16.0% a year over 3 years.

🟢 EBITDA has grown at 20.0% a year over 3 years.

🟢 EBITDA Margin has risen from 95.2% to 105.2% over 3 years (+10.0 pts).

🟢 PAT (Net Profit) has turned positive, from -₹3 Cr to ₹499 Cr.

🟢 EPS has turned positive, from ₹-0.05 to ₹8.16.

🟢 ROE has risen from -0.2% to 9.9% over 3 years (+10.0 pts).

🟡 ROCE has held roughly flat at 7.0% over 3 years.

🔴 Total Debt has grown at 30.2% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹495 Cr to -₹4,073 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹28,540 Cr

Total Liabilities

₹23,480 Cr

Cash & Equivalents

₹1,339 Cr

Operating Cash Flow

₹1,249 Cr

Capex

-₹5,321 Cr

Shareholding (proxy)

Institutional Holding

20.9%

Insider Holding

71.7%

Corporate Actions

Dividend Rate

₹0.2

Ex-Dividend Date

06 Feb 2026

Analyst Consensus

Recommendations

11 Buy · 1 Hold · 1 Sell

Target Price (Mean)

₹448.85

+9.5% vs CMP

Target Range

₹390 – ₹550

Peer Comparison

Company	P/E	ROE
NTPC LTD	11.0x	13.7%
POWER GRID CORP. LTD.	14.6x	15.8%
TATA POWER CO LTD	29.3x	9.8%

Recent News

4 mixed2 general

70% YTD returns! Axis Capital sees 30% more upside in this renewable power stock; do you own? Target price

Livemint, 15 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Acme Solar shares: Axis Capital initiates coverage, sees 31% upside; check stock reaction

Business Today, 15 Oct

ACME Solar Holdings soars 6%, hits all-time high; stock up 103% in 8 months

Business Standard, 18 Sept

Acme Solar Holdings Ltd. Share Price News on Large-Cap Rise

Univest, 19 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Acme Solar Holdings shares jump 3% on bagging 300 MW Assured Peak power project from SECI; key details

Upstox, 28 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Acme Solar Holdings - FIIs, MFs raise stakes in 10 stocks; shares gain up to 40% in 3 months

The Economic Times, 26 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability

MiddlingValuation

WeakFinancial Health · Risk

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 5 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑