In a new initiation report, HSBC said it expects Acme Solar to benefit from strong capacity additions, a robust project pipeline, and improved visibility into cash flows as execution picks up across key markets. The brokerage highlighted that the company is well placed to capitalise on the acceleration in solar capacity auctions and policy support for clean energy.
HSBC has set a target price of Rs 350, implying a potential upside of roughly 28% from the stock’s last closing price, arguing that current valuations do not fully reflect Acme Solar’s growth runway and balance sheet improvements. The report pointed to declining financing costs, better capital discipline and more competitive bidding as levers that can drive an expansion in returns over the medium term.
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The brokerage noted that Acme Solar’s operational portfolio, combined with its under-construction assets, provides multi-year earnings visibility, underpinned by long-term power purchase agreements and a diversified counterparty mix. It also underlined management’s focus on deleveraging and prudent capital allocation, which, in its view, strengthens the company’s equity story at a time when investors are increasing exposure to renewable platforms.
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HSBC believes that concerns around execution and tariffs are “overdone”, adding that recent bid discipline and a sharper focus on returns rather than sheer growth should help support margins. The brokerage expects earnings growth to accelerate as new projects are commissioned and receivables cycles gradually normalise.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)