Nomura initiates coverage on two renewable players with up to 26% upside

India has one of the largest installed renewable capacities in the world. With the share of renewable energy increasing in the country’s electricity mix, issues such as grid instability and mismatch in the timing of power generation and consumption are popping up.

Japanese brokerage Nomura has initiated coverage on two renewable players, ACME Solar Holdings and NTPC Green Energy, as it expects these companies to benefit from the rising use of renewable energy.

Nomura has initiated coverage with a ‘Buy’ rating on ACME Solar and has a target price of Rs 505. This implies an upside of 26% from the stock’s current price of Rs 400.15 apiece.

For NTPC Green, the brokerage has a ‘Neutral’ rating and a target price of Rs 100. This reflects an upside of nearly 19% from its current price of Rs 84.14 apiece.

Nomura expects ACME Solar to add 4.3 gigawatt (GW) of contracted capacities over FY27 to FY29. This will drive a revenue growth of 66% on a compounded annual growth rate (CAGR) basis and earnings before interest, tax, depreciation, and amortisation (EBITDA) growth of 65% CAGR over the same period.

The company is transitioning from a conventional solar independent power producer into a firm, dispatchable platform, with firm and dispatchable renewable energy (FDRE) now forming more than half of its total portfolio capacity. FDRE projects are structured around pairing larger generation assets with storage, enabling developers to match a utility’s defined delivery schedule and consumption pattern, Nomura said.

ACME Solar has been able to expand margins following the decline in Lithium-ion cell prices over the past few years, and projects won at tariffs assuming higher battery energy storage system (BESS) cost. The company is benefitting from margin improvement for a second time through early commissioning of BESS.

“By installing BESS at sites where solar is already operational, it reuses existing evacuation infrastructure and energizes the battery into the merchant market ahead of FDRE CoD, with over 5 GWh already operating this way. Pulling BESS online one year early adds more than 1,000bp to project equity IRR, we estimate,” the brokerage said.

ACME Solar’s strong order pipeline provides earnings growth visibility through FY29, subject to its commissioning schedules. ACME’s total portfolio is around 8.1 GW as of June 2026, which rose to 8.4 GW on a recent 300 MW FDRE award.

Only about 3 GW is operational currently, with the under-construction book carrying signed power purchase agreements on roughly 4.3 GW of storage-linked capacity and a further 1.1 GW awaiting signature.

NTPC Green Energy is the renewable subsidiary of state-owned NTPC. Nomura expects the company’s revenue to expand at 74% CAGR over FY27 to FY29 and EBITDA to rise 72% CAGR over the same period. This will be driven by consolidated capacity additions of 18 GW over the same period.

NTPC has committed to 60 GW of renewable capacity by FY32, with NTPC Green Energy as the group’s principal renewable vehicle. NTPC Green has around 12.9GW of under-construction capacity in its wholly owned subsidiary and 3.4GW under joint ventures, with the balance to be built out through further tender wins.

“This materially reduces pipeline replenishment risk, which we regard as the principal constraint on growth for Indian renewable developers; MoUs carry a second-order benefit: they give NGEL access to land parcels and state transmission connectivity, easing the two conditions that most commonly delay commissioning, in our view,” Nomura said.

“As an NTPC subsidiary, NGEL inherits both execution capability and relatively low funding cost. The parent’s track record across large projects provides NGEL with a delivery capability that is difficult to replicate, in our view. The sharper advantage is relatively low cost of debt. The benefit further adds up with cheaper debt supporting higher leverage at the same coverage ratio, so less equity is locked into each megawatt, and the same equity base rotates through more projects,” Nomura added.

Disclaimer: This article is based on research reports from one or more brokerage firms and is for informational purposes only. The views, target prices, and recommendations expressed are those of the respective brokerage firms and do not reflect the official policy or position of Financial Express. This should not be construed as an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor before making any investment decisions.