HSBC Raises Target For ACME Solar - Details Below

shares jumped nearly 5% after HSBC raised its target price by 15% to ₹450 from ₹390 while retaining its Buy rating. HSBC believes the renewable energy sector is showing early signs of recovery after a relatively weak FY26 and muted Q1 FY27, with rising power demand and growing adoption of battery storage supporting the next phase of growth. But the bigger question for ACME is whether this recovery can translate into better project economics and sustainable returns. PPA Conversion Is Becoming the Key Catalyst One of the strongest positives is ACME’s ability to convert awarded projects into actual PPAs. The company has converted 730 MW of Letters of Award into PPAs over the last two quarters, improving visibility on future capacity deployment. ACME has also recently won a 300 MW project at a discovered tariff of ₹6/kWh for four-hour assured evening supply. This highlights its increasing exposure to firm and dispatchable renewable energy rather than conventional intermittent generation. For investors, the conversion of awarded capacity into PPAs is important because headline project awards have limited value until they translate into contracted projects, construction and eventually cash flows. ACME Is Moving Beyond Conventional Solar Another important part of HSBC’s thesis is ACME’s transition towards FDRE projects combining solar, wind and battery energy storage. This could position the company to benefit from India’s growing requirement for reliable and dispatchable renewable power. Early BESS commissioning could also create opportunities for merchant revenue, potentially providing another earnings lever. However, the opportunity comes with a trade-off. Competitive intensity has resulted in some deterioration in project economics, meaning higher capacity additions do not automatically translate into higher shareholder returns.