ACME Solar Hold.

ACME Solar Holdings significantly expanded its operational capacity in Q3 FY25, doubling it from 1,340 MW to 2,540 MW. This 90% increase was primarily driven by the commissioning of a 1,200 MW solar capacity, which is designed to operate at a 30% CUF and is currently achieving 31-33%. The overall CUF for the company improved to 23.7%, contributing to a substantial 34.5% increase in generation for the nine months ended December 31, 2024, reaching 250 crore units.

The company reported strong financial results for Q3 FY25, with revenue reaching INR 401 crores, a 45% increase YoY on an adjusted basis. EBITDA grew by 59% YoY (adjusted) to INR 359 crores, reflecting a high 90% margin on a reported basis. PAT surged 152% YoY (adjusted) to INR 112 crores, and Cash PAT saw a 149% YoY (adjusted) increase to INR 189 crores. The PAT margin for the quarter stood at 28%, significantly higher than 12% in the prior year.

ACME Solar successfully reduced its net debt by INR 2,070 crores, bringing the total net debt down to INR 6,882 crores from INR 8,755 crores in the previous quarter, primarily utilizing IPO proceeds. The company also refinanced INR 5,500 crores (50-55% of its debt) at an average interest rate of 8.8% per annum, which is expected to reduce the cost of debt by approximately 70 basis points for these projects. Greenfield financing of INR 16,500 crores has been sanctioned, covering about 40% of the under-construction projects, and the net operational debt to annual EBITDA is maintained at ~5X, below the guided 5.5X.

The total contracted portfolio of ACME Solar now stands at 6.97 GW, with 1,900 MW of new capacity won in the current financial year. PPAs have been signed for 2,340 MW out of the 4,430 MW under-construction capacity, and tariffs have been adopted for 2,500 MW. Management is optimistic about signing the remaining 2,090 MW PPAs within the next one to two months, driven by central government support and attractive tariffs, especially under the new ALCM regime which is expected to make existing bids more favorable.

The company has a clear strategy for funding its substantial project pipeline, which includes an equity requirement of INR 7,500-8,000 crores for the 4.6 GW capacity. This will be met through IPO proceeds of INR 2,400 crores, expected securitization proceeds of approximately INR 2,500 crores (including INR 1,000 crores from the SECI project), and construction margins (EPC accruals) of INR 2,000-2,500 crores. This multi-pronged approach, combined with free cash flow from operational projects, is expected to cover the equity needs for the current won capacity until 2028 without requiring further equity raises.

ACME Solar maintains high operational standards with plant availability at 99.4% and grid availability at 99.6%. The company is committed to continuous innovation, planning to test new technologies like FDRE projects with battery storage to improve forecasting and deviation settlement. Management also highlighted that the per-megawatt corporate cost is expected to decrease as more capacity is added, demonstrating efficient scaling of operations.