Adani Green, NTPC Green, ACME Solar: ICICI initiates coverage on 3 stocks; check targets

Domestic brokerage firm ICICI Securities has initiated coverage on three renewable energy counters including Adani Green Energy, NPTC Green Energy and ACME Solar Holdings, with mostly positive outlook. The brokerage sees up to 80 per cent upside potential in these utilities’ counters. From this space, ICICI Securities already had Tata Power and JSW Energy under its coverage.

Energy transition is gaining momentum in India. The country has promised over 40 per cent renewable energy (RE) penetration by FY30 and has set a target of net zero emissions by 2070, said ICICI Securities. Hence, a series of conducive steps have been taken like – renewables consumption obligations, reduction in transmission charges for RE and bidding for over 40GW in FY24 and FY25, it said.

“The undergoing transition is well rooted in RE economics. Decline in storage cost is further improving RE’s prospects while adoption of green hydrogen may further increase the total addressable market. We expect this to lead to an accelerated investment in RE – creating opportunities for RE power producers,” it added.

The brokerage believes that the winners will have certain characteristics, including high capital efficiency which can be best measured with capex to Ebitda metrics. EV to EBITDA for locked-in portfolio is the best metric to value the portfolios given the higher growth prospects for renewable generators, it said.

“We are assigning multiples to various portfolios based on expected capex to EBITDA for the portfolio, cost of capital, access to renewable resources, scale and size; and track record for delivery,” ICICI Securities added. “We initiate coverage on ACME Solar and Adani Green with ‘buy’ and ‘add’ on NTPC Green.”

ICICI Securities has given Adani Green and ACME Solar target prices of Rs 1,150 and Rs 35,, suggesting upsides of 24 per cent and 80 per cent, respectively in them. It sees an upside potential of nearly 15 per cent NTPC Green. JSW Energy and Tata Power are the other stocks which have ‘buy’ ratings for them with target price of Rs 632 and 470, respectively.

ACME Solar Holdings and NTPC Green Energy made their respective stock market debuts in November 2024. While the former one raised Rs 2,900 crore via IPO by selling its shares for Rs 289 apiece, the latter one mopped Rs 10,000 crore from primary markets by selling its shares for Rs 108 apeice.

Shares of ACME Solar have crashed to Rs 192 on Friday, down 35 per cent from its IPO price. Similarly, shares of NTPC have fallen more than 9 per cent from its IPO price to Rs 98.40 on Friday. However, shares of NTPC Green soared to Rs 155.30 in December 2024 and it is 37 per cent down from it’s all time high. ACME Solar, on the other hand, scaled its high at Rs 292.

Recently, domestic brokerage firm IIFL Capital also initiated coverage on ACME Solar with a ‘buy’ rating and a target price of Rs 290 and NTPC Green with an ‘add’ rating and a target price of 105.  It anticipates energy transition to quadruple the profit pool for renewable developers by shifting profits from government; value capture by backward integration; and creation of new profit pools by forward integration.