ACME Solar Holdings Ltd Q1 FY26 Earnings Analysis

- ACME Solar targets a contracted capacity of 7 GW by FY '27-'28 and aims for 10 GW by FY '30, combining FDRE (Firm Delivery Renewable Energy) and hybrid projects. - Revenue growth is expected from commissioning near-ready projects totaling 450 MW in FY '26 and about 1.89-2.2 GW in FY '27. - The company focuses on profitability over just installed capacity, with installed capacity potentially over 20 GW including battery and solar. - Increasing focus on technology innovation and execution to meet India's growing energy demand, especially base and peaking power via FDRE and hybrid solutions. - Financial prudence with no intent to raise further equity; capex scheduled as per secured PPAs and balanced year-wise commissioning. - Expansion aided by free cash flows, EPC margins, and credit lines supporting INR 20,000 crores capex. - Continued increase in capacity utilization factor (CUF) expected due to Rajasthan focus and full-run operations of new plants.

- ACME Solar targets reaching around 10 GW contracted capacity by FY '30, expanding from 2.7 GW operational currently, with 3.5-4.5 GW capacity additions planned by FY '27-'28. - FY '26 capacity addition expected around 450 MW; FY '27 approximately 1.89-2.2 GW, primarily backed by signed PPAs. - EBITDA is expected to improve with capacity additions; FY '25 EBITDA was INR 1,400 crores with an 89% margin, showing strong growth (up 43% YoY). - PAT and cash PAT saw significant growth in FY '25, up 290% and 155% respectively, signaling improving profitability. - Cost of debt expected to decline gradually due to credit rating improvements and lower interest rates, aiding better financials. - The company emphasizes financial prudence; no major equity raise planned, relying on cash accruals and financing for capex. - Operational efficiency improvements and capacity utilization factor gains (25.6% to improving further) indicate future profit growth potential.

- Capex of around INR 20,000 crores planned, funded by INR 16,500 crores debt and ~INR 4,000 crores equity (from cash accruals and unutilized credit lines). - Focus on executing large infrastructure projects requiring contiguous land; efforts ongoing to secure government land to improve execution capacity. - Capex locked-in for batteries at prices well below initial budget, with Tier 1 Chinese suppliers and currency hedges in place. - Strategic investments in equipment including PCS, transmission lines, transformers, wind turbines, and gas-insulated substations for improved reliability and efficiency. - Building operational and near-commissioning projects, targeting increased capacity to 10 GW by FY '30, staggered yearly for balanced execution. - No capex on Pumped Storage Plants (PSP) until a good tariff aligned with construction risk is secured. - Pilot Battery Energy Storage System (BESS) project of 200 MW targeted for Q2; larger scale BESS projects planned for Q3 commissioning.

- ACME Solar has secured debt financing of around INR16,500 crores for 1,700 MW of under-construction projects. - The INR16,500 crores refers solely to debt; equity funding is supplemented by internal accruals and unutilized credit lines (~INR4,000 crores equity). - The company does not intend to raise further equity to fund capex; capex will be scheduled based on existing financial resources. - Refinancing sanctions of INR7,700 crores at reduced interest rates (around 8.5%-8.6%) were obtained to lower cost of debt. - No explicit mention of new fundraising plans beyond this; focus is on optimizing existing financing and staggered commissioning aligned with PPA timings. - The company aims to be financially prudent, not building plants unless debt financing is secured, minimizing risk exposure.

- Under construction locked-in capacity stands at 4.3 GW. - Of this, around 2.2 GW is already PPA signed. - Balance 2.1 GW are LOA awarded, with PPA signing expected soon. - Bunching up of PPA signing expected; around three PPAs aggregating to ~750 MW are in the final stage and expected to be signed soon. - Tariff adopted and order reserved for over 90% of the 4.3 GW under construction projects. - Connectivity in place for the entire portfolio plus surplus connectivity of 2.5 GW applied/secured for future bids. - Land acquisition: over 50% for solar components, over 60% for wind components for PPA signed projects. - Additional land applications for over 10,000 acres in various approval stages to support under-construction and future projects.