Goal: ₹330
CMP: ₹228.20
ACME Photo voltaic Holdings (ACME) boasts a diversified portfolio of about 7GW of renewable capability (operational + beneath building + pipeline) spanning photo voltaic, wind, hybrid, and agency & dispatchable renewable power (FDRE) tasks. As of date, the corporate has an operational portfolio of round 2.5GW, whereas the entire mission pipeline, together with under-construction tasks, stands at round 4.4GW.
About 86 per cent of the corporate’s portfolio is contracted with central off-takers, together with SECI, NTPC, SJVN, and NHPC, involving minimal counterparty threat.
We provoke protection on ACME with a BUY ranking and a TP of ₹330.
We consider ACME’s steep valuation low cost vs NTPC Inexperienced is unsustainable and will slim within the coming quarters. We additional consider that NTPC Inexperienced’s premium valuation is essentially a operate of decrease financing prices. Nevertheless, this benefit is dented on condition that NTPC Inexperienced outsources each EPC and O&M for its tasks.
Assuming a ten per cent EPC margin and a 50 per cent O&M margin for photo voltaic tasks, we estimate NTPC Inexperienced will lose 79 per cent of the curiosity price financial savings over the mission life. Whereas we acknowledge NTPC Inexperienced’s superior financing price, we spotlight that ACME (in addition to different gamers who undertake in-house EPC/O&M for tasks) saves important prices
