ACME Solar Holdings Share Price Target: A Potential 70% Upside
In a recent development, Nuvama Institutional has initiated coverage of ACME Solar Holdings with a ‘Buy’ rating and set a target price of Rs 328, implying a potential gain of over 70% from the current price. This is a significant upside, considering the company’s current trading price of around Rs 192, which is only 35% of its IPO price of Rs 289.
Strong growth prospects for the sector and the company
The renewable energy sector is growing rapidly, with huge investments being made in it. According to analysts, if power demand rises by just 5%, India may face a shortage by 2030-32. ACME Solar Holdings is well-positioned to capitalize on this growth, with plans to increase its power generation capacity from 1.3GW to 7GW by 2028. The company has a strong project pipeline and expects to secure agreements to sell 53% of its power.
In-house EPC and O&M advantage
ACME Solar Holdings has an in-house engineering, procurement, and construction (EPC) division, as well as an efficient operation and maintenance team. This in-house capability provides flexibility in processes, costs, and timelines, allowing for optimization and cost savings.
Long-term power purchase agreements (PPAs)
ACME Solar Holdings generates power and then enters into long-term power purchase agreements (PPAs) with customers, state governments, and the central government. These agreements are typically for 25 years at a fixed tariff, providing a stable and predictable revenue stream for the company.
A ‘Buy’ rating and a price target of Rs 328
Nuvama Institutional’s analysts believe that ACME Solar Holdings has significant upside potential, with a target price of Rs 328, representing a 70% gain from the current price. This is a bullish call, considering the company’s strong fundamentals and growth prospects.
Disclaimer
The investment advice on stocks mentioned here is provided by a brokerage house and does not reflect the views of Zee Business. Please consult your financial advisor before investing.
In conclusion, ACME Solar Holdings has a strong growth outlook, driven by the rapidly growing renewable energy sector, its in-house EPC and O&M capabilities, and long-term power purchase agreements. With a ‘Buy’ rating and a price target of Rs 328, investors may want to consider this stock for a potential 70% gain.
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