Acme Solar Holdings Limited

The renewable energy sector witnessed significant growth, adding 35 GW of new capacity from January to October 2025, bringing the total installed capacity to 247 GW. This expansion led to renewables contributing approximately 27% of India's total energy generation. Key regulatory updates include a reduction in GST rates on solar and wind equipment from 12% to 5%, lowering capital costs. Additionally, Renewable Energy Purchase Obligations (RPO) have been replaced with a wider Renewable Energy Consumption Obligation (RECO), targeting a minimum of 43% RE consumption by 2030. The CERC also amended connectivity and GNA regulations to accommodate battery energy storage systems (BESS) for grid stability and merchant operations. The Supreme Court's directive to liquidate ₹1.5 lakh crores of regulatory assets within four years is expected to bring financial discipline to electricity tariff determination.

ACME Solar Holdings reported robust financial performance for Q2 FY26. Total revenue for the quarter stood at ₹601 crores, marking a substantial 104% increase year-on-year. EBITDA also saw a significant rise of 108% to ₹534 crores, achieving a strong margin of 89% compared to 87% last year. Profit After Tax (PAT) was ₹115 crores, with a PAT margin of 19%. The company noted that the Narela K3 line of the ACME Sikar project (300 MW) is currently operating under temporary GNA/STOA due to a delay in connectivity line commissioning, which is expected to be operational by December, shifting the plant to LTOA and full revenue potential.

The company is on track to meet its FY26 execution guidance of commissioning 450 MW of renewable energy capacity, having already commissioned 378 MW, with the remaining 72 MW in advanced stages. The operational portfolio now stands at approximately 2,918 MW, capable of generating an annual steady-state project-level EBITDA of ₹2,025 to ₹2,075 crores, with an EBITDA yield of 14%-15%. In Q2, the company generated 153.9 crore units, a 134% increase year-on-year, and improved its capacity utilization factor (CUF) to 24.1% from 22.2% last year, with plant and grid availability above 99%.

ACME Solar demonstrated strong capital optimization efforts. The company achieved a significant interest rate reduction of approximately 75 basis points on ₹2,080 crores of existing debt for operational projects, driven by a credit rating upgrade. One operational project was refinanced for ₹1,100 crores at an optimized interest rate of around 8.4%, with further reductions anticipated. For greenfield projects, ₹7,000 crores in financing was secured from SBI and REC for 680 MW FDRE projects. The company's net operational debt to EBITDA stands at 4.3x, and net debt to net worth is 1.9x. The credit rating for ACME Solar was upgraded to AA- by CRISIL and ICRA, with 1,100 MW of operational projects also receiving an AA- rating.

During the quarter, ACME Solar won new projects totaling 720 MW, including a 50 MW FDRE project and a 670 MW solar plus BESS project. This expands the under-construction portfolio to 4.5 GW, with a total PPA signed capacity of 2.3 GW. The 220 MW RUMSL Morena solar park project, secured at a competitive tariff of ₹2.764 per unit, benefits from cost efficiencies like non-applicability of ALCM, reduced GST, and free night charging by DISCOM. The 450 MW SJVN project, with a peak power tariff of ₹6.75, involves a 2,200 MWh battery and is expected to deliver a strong EBITDA to capex yield of 14%-15%. The company also placed new orders for 2 GWh BESS, bringing total BESS orders to 5.1 GWh, with installations expected to begin in Q4 FY26.

ACME Solar successfully commissioned a 10 MWh pilot BESS project at its ISTS plant, which helped in assessing effectiveness across configurations. This pilot project improved efficiency, reducing capex and generating the same energy output, and enhanced reliability in round-trip efficiency and discharge rates. Learnings from the pilot will reduce installation time and bill of materials for future projects. The company plans to operate 1 GWh of merchant BESS from Q4 FY26, projected to generate an annual EBITDA upside of ₹170 crores. The total planned capex for FY26 is ₹12,000 crores, with ₹9,000 crores from debt and ₹3,000 crores from equity, and a similar capex of ₹12,000-13,000 crores is planned for FY27.