ACME Solar Holdings Limited Q1 FY27 Earnings Call Summary

Event Participants

Executives

4
Ankit Verma, Arun Chopra, Manoj Upadhyay, Nikhil Dhingra

Analysts

8
Aniket, Anuj Bhardwaj, Apoorva Bahadur, Mohit Kumar, Nikhil Abhyankar, Sambhav Kela, Subhadip Mitra, Yogesh Patil

Financials & KPIs

Geographic & Segment Commentary

• Solar / RE Generation: Record CUF of 30.9% (vs 28.5% YoY) and generation of 2,020 million units (+23% YoY) drove core EBITDA, supported by continuous repowering of existing plants. RE portfolio EBITDA margin held at 88-89%; curtailment from state projects was contained at ~1% of revenue, with management adding co-located batteries to eliminate it. Management guided ex-BESS core EBITDA margin in the 88-92% range.

• BESS Operations: Commissioned 2.3 GWh during the quarter, taking cumulative capacity to 3.62 GWh (~40% of India's cumulative installed BESS). Q1 BESS power sales of ₹226 crores (85% short-term contracts, balance merchant) delivered >20% annual EBITDA-to-CapEx yield. Battery operating metrics beat design expectations—round-trip efficiency ~89%, depth of discharge ~93%, state of health >99.9%, plant availability >99%—with demonstrated 15-minute slot FDRE charging/discharging.

• FDRE & Hybrid Pipeline: Signed 600 MW of FDRE and hybrid PPAs with SECI, taking PPA-signed capacity to 3,880 MW of 5,080 MW under construction; ~1,200 MW of PPAs expected to be signed shortly. Total portfolio stands at 8,070 MW, entailing ~20 GWh of battery storage, with debt tied up for ~85% of the PPA-signed portfolio.

Company-Specific & Strategic Commentary

• BESS Early Deployment Strategy: Management is deliberately commissioning BESS ahead of solar to capture short-term peak-power revenue (one year of merchant operations before PPA backing). BESS commissioning guidance upgraded from 10 GWh by CY2027 to >10 GWh by FY2027—brought forward by nearly three quarters—with an upward bias as contracted volumes exceed 10 GWh. Committed short-term contracts of >₹1,400 crores represent 70-80% of targeted FY2027 BESS capacity at realizations of ₹8-10 per unit.

• Capital Allocation & QIP: Successfully completed QIP, providing flexibility to prepone CapEx for under-construction projects and improve return economics. FY2027 CapEx upgraded to ₹15,000-20,000 crores (~₹3,000 crores spent in Q1). Goal is zero open merchant BESS capacity by year-end—all operating capacity except the 300 MW plant (scaling from 2 to 4 hours) is PPA-backed.

• Procurement & Hedging: Ordered >15 GWh of battery from CATL and Lithium Werks (~90% of the 20 GWh portfolio contracted), well within budgeted cost. Hedged >$300 million of dollar exposure at ₹89-93/USD, providing a positive cost bias. Modules are being bought opportunistically at sub-₹12/Wp (currently ~₹11.60) ahead of China regulation changes and a 6% export tax from January.

• BESS Safety & In-house Capability: Post-incident root cause analysis at ACME Suryodaya confirmed the fire originated from an electrical short circuit in AC cabling between transformer and PCS—not within battery systems, which were undamaged. Enhanced safety infrastructure deployed: AI-enabled video analytics, arc flash sensors in PCS panels, aerosol-based fire suppression, and improved cable protection. Built a 50-member in-house EPS BESS team handling integration, installation, commissioning, and operations.

• Regulatory Tailwinds: MNRE extended commissioning deadlines for open-access/net-metering projects to December 2026 (smoother ALMM transition); Ministry of Power extended graded ISTS waiver benefits for transmission-delayed projects; CTU began granting BESS connectivity via right-of-first-refusal route, accelerating BESS deployment and enabling evening-peak participation.

• New Growth Areas: Actively exploring C&I and data-center opportunities with team hiring underway; management expects data centers (alongside EV growth) to be a major demand driver for round-the-clock renewable and peak power, and would participate via SECI aggregation or directly if profitability thresholds (mid-to-high teen IRRs) are met.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

BESS Capacity & Merchant Strategy

• Question: What quantum of open/merchant BESS capacity is estimated for FY2027 and beyond? (Subhadip Mitra, Nuvama)
• Answer: 10 GWh will be available on a daily basis by March 2027, with an upward bias since contracted capacity is higher. All BESS is PPA-backed—first year runs merchant before locking into PPA; target is zero open capacity by year-end. (Nikhil Dhingra)
• Additional: Every year at least 10 GWh of battery will remain available for the short-term power market, going into PPAs the following year; plan is 10-12 GWh annually for the next five years. Only the 300 MW plant (scaling from 2-hour to 4-hour) is currently open and will be contracted in the next bid. (Manoj Upadhyay)

BESS Contract Realizations & Tenure

• Question: What is the realization range for the locked-in short-term BESS contracts? (Subhadip Mitra)
• Answer: Realizations are between ₹8-10 per unit, in some cases higher, based on bids on the DEEP portal and HP-TAM markets, which are publicly available. Contracts are typically under one year—six to nine months ahead—reflecting the short-term market. (Nikhil Dhingra)

GNA Delays & Commissioning Approach

• Question: For SJVN/FDRE projects with GNA in FY2028, will you prepone battery commissioning and push solar out? (Aniket, SBI Mutual Fund)
• Answer: BESS for Hirapur and Bikaner is already commissioned; solar will only be commissioned when GNA is available. Management will not commission on T-GNA because curtailment is detrimental to shareholder returns and lender comfort. ~80% of non-module CapEx is done; modules will be bought opportunistically at INR 11.60-12/Wp, balancing IDC minimization. (Nikhil Dhingra)

Battery Financials in P&L

• Question: Can you provide depreciation and interest for the BESS in the quarter? (Mohit Kumar, ICICI Securities)
• Answer: Depreciation policy is 20 years for batteries. For the quarter, battery interest was ~₹32 crores and depreciation ~₹27 crores. (Arun Chopra)

CERC Free-Exit Route Impact

• Question: How does CERC's free-exit option on merchant conversion help ACME? (Mohit Kumar, ICICI Securities)
• Answer: It will free up stranded connectivity where PPAs are unsigned, benefiting ACME in accessing high-GHI connectivity previously unavailable. It also improves CTU grid planning, and the ROFR attached to freed connectivity (including BESS) creates additional opportunities. (Nikhil Dhingra)

PPA Signings & Configuration Changes

• Question: Were there changes in PPA terms, especially for the hybrid project? What is the status of ACME Marigold? (Sambhav Kela, HSBC)
• Answer: The hybrid project now offers one hour of battery—a change from the standard configuration; the other project is unchanged. ACME Marigold PPA with a Northeast state was delayed due to a Supreme Court case on railway open-access status; bank guarantee is submitted and signing is expected very shortly. (Nikhil Dhingra)

BESS Capital Cost & Merchant Market Depth

• Question: The capitalized BESS cost is ~₹93 lakhs/MWh. How will cost trends evolve, and how deep is the merchant market given competition replicating this strategy? (Apoorva Bahadur, IIFL)
• Answer: BESS cost could rise 5-10% on lithium volatility, but savings come from PCS costs below budget, substations with existing lines, and >$300 million hedged at ₹89-93/USD. Market depth: current peak demand is ~300 GWh, likely rising toward 400-500 GWh and possibly 1 TWh as the duck curve deepens with more rooftop, KUSUM, and FDRE solar; most BESS supply will be PPA-backed, so pure-merchant supply is limited. (Nikhil Dhingra, Manoj Upadhyay)

Ex-BESS EBITDA Growth & Curtailment

• Question: What drove ~20% ex-BESS EBITDA growth without significant capacity addition, and what is the curtailment impact? (Nikhil Abhyankar, UTI Mutual Fund)
• Answer: CUF improved to an all-time high of 30.9% (from 28.5% YoY) and continuous repowering of existing plants drove the improvement. Curtailment was ~1% of revenue from state projects; management is adding co-located batteries at state projects to capitalize on surplus generation and pursuing regulatory changes to bring state curtailment provisions in line with central grid norms. (Nikhil Dhingra, Manoj Upadhyay)

Revenue Sustainability & Core EBITDA Margin

• Question: Is the ₹1,400+ crores BESS revenue sustainable beyond the El Niño year, and what is the core EBITDA margin guidance? (Yogesh Patil, Dolat Capital)
• Answer: Volume tie-up is at 80% of the 10 GWh target, so revenue can exceed ₹1,400 crores. Demand is structural—due to the duck curve, AC penetration, EV adoption, and unmet 4-hour peak needs—not just El Niño-driven; hydro and PSP cannot competitively meet these peaks. This revenue level is assumable for the next 2-3 years based on the PPA pipeline. Core (ex-BESS) EBITDA margin was 91% in Q1, with a 88-92% range historically; FDRE projects with healthier realizations may improve it further. (Nikhil Dhingra, Manoj Upadhyay)

Key Takeaway

ACME Solar delivered its highest-ever quarterly revenue of ₹954 crores (+63% YoY) and EBITDA of ₹831 crores (+56% YoY) in Q1 FY2027, driven by a record 30.9% CUF, BESS revenue of ₹226 crores, and repowering gains; PAT grew 80% to ₹235 crores. The company commissioned 2.3 GWh of BESS (3.62 GWh cumulative, 40% national share), locked in >₹1,400 crores of short-term BESS revenue at ₹8-10 per unit, and raised FY2027 CapEx guidance to ₹15,000-20,000 crores. Strategically, management is accelerating BESS deployment to >10 GWh by FY2027 with all capacity PPA-backed, ~90% of the 20 GWh battery pipeline contracted, and a longer-term target beyond 10 GW by 2030. Key watch points include transmission/GNA delays pushing solar commissioning into FY2028, state-level curtailment (1% of revenue), and sustainability of BESS merchant pricing post the El Niño year, though management remains confident in structural peak-power demand growth.

Transcript incomplete - [exact call date/time and formal section updates such as new project awards/CAPEX rundown not disclosed in the provided excerpt] not available for summary.