Profit rose, but margin slipped as other income did the heavy lifting
Consolidated earnings benefited from a sharp rise in other income, while interest costs grew 64.18% YoY and operating margin narrowed.
Filed 08 May 2026, 01:41 IST · ACME Solar Holdings Ltd (ACMESOLAR)
Key takeaways
- Consolidated net profit rose 13.29% YoY, but other income contributed 90.23% of pre-tax profit.
- Operating margin fell 2.10 percentage points YoY as expenses grew 34.96%, faster than revenue growth of 12.52%.
- The stock fell 5.28% on results day, close to its 5.34% median absolute move after the past six results.
Price around the results
Other income drove the earnings increase
Consolidated revenue grew 12.52% YoY and net profit increased 13.29%, but other income rose 347.64%. With other income accounting for 90.23% of pre-tax profit, the earnings increase was materially supported by non-operating income rather than operating growth alone. Profit before tax rose 14.25% YoY.
Higher costs and interest weighed on margins
Expenses grew 34.96% YoY against 12.52% revenue growth, narrowing operating margin by 2.10 percentage points. Interest expense increased 64.18% YoY and 17.17% QoQ, adding pressure below the operating line. The tax rate was broadly stable, rising 0.61 percentage points YoY and falling 0.05 percentage points QoQ, so the profit increase was not mainly tax-led.
Q4 interrupted the margin recovery
Operating margin had recovered from 85.56% in Q2FY26 to 89.47% in Q3FY26, before falling 2.07 percentage points QoQ to 87.40% in Q4. Even after the decline, ACME Solar's margin was 52.21 percentage points above the 35.19% median for the 17 Utilities peers that had reported the quarter. Sequentially, revenue rose 10.28% and net profit increased 21.63%, helped by a 42.81% rise in other income.
New capacity supported generation and expansion
The presentation said Q4 power generation increased 13.7% because of new capacity additions, while the company fully commissioned a 100 MW wind project and operationalized approximately 2.3 GWh of BESS in phases from February to May 2026. Management said it had committed approximately Rs 12,475 cr of FY26 capex, of which Rs 6,445 cr had been incurred, and had acquired over 15,000 acres for its under-construction portfolio. The company said it is targeting 10 GW of generation capacity and 20 GWh of BESS capacity by 2030.
The initial stock reaction was within its usual range
The stock fell 5.28% on the results date and was down 7.55% after five sessions. The first-day decline was close to the 5.34% median absolute move after the past six results, although the historical pattern was positive in four instances and negative in two.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹548 cr | ₹497 cr | +10.28% | +12.52% |
| Other income | ₹171 cr | ₹120 cr | +42.81% | +347.64% |
| Expenses | ₹69 cr | ₹52 cr | +31.94% | +34.96% |
| Operating profit | ₹479 cr | ₹444 cr | +7.73% | +9.89% |
| Operating margin (%) | 87.40% | 89.47% | — | — |
| Interest | ₹337 cr | ₹288 cr | +17.17% | +64.18% |
| Depreciation | ₹123 cr | ₹120 cr | +2.17% | +20.12% |
| Profit before tax | ₹190 cr | ₹156 cr | +21.54% | +14.25% |
| Tax | ₹52 cr | ₹43 cr | +21.32% | +16.90% |
| Net profit | ₹138 cr | ₹114 cr | +21.63% | +13.29% |
| EPS (₹) | ₹2.30 | ₹1.88 | +22.34% | +6.98% |
Operating margin of 87.40% compares with a Utilities sector median of 35.19% across 17 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -5.28% | -4.66% |
| Next session | -2.78% | — |
| 5 sessions | -7.55% | -4.74% |
| 15 sessions | +2.90% | — |
| 30 sessions | +17.18% | — |
Volume on the results session was 3.13× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Power generation increased 13.7% in Q4 FY26, driven by new capacity additions.
- Approximately 2.3 GWh of BESS was operationalized in phases from February to May 2026.
- The commissioned BESS achieved 88–90% round-trip efficiency under current operating conditions.
Guidance & outlook
- The company targets a portfolio of 10 GW generation capacity and 20 GWh BESS capacity by 2030.
- The company expects its central-offtaker share to rise to 84%, further reducing DSO days.
- The company expects its future upcoming BESS portfolio to be approximately 10 GWh.
Expansion
- The company committed approximately INR 12,475 crore of capex in FY26, with INR 6,445 crore incurred.
- The company has over 15,000 acres of land acquired for its under-construction portfolio.
- The company commissioned approximately 2.32 GWh of BESS capacity to date.
- The company fully commissioned a 100 MW wind project, its largest wind project.
New orders
- The company won a 301 MW FDRE project from SECI in Q4.
- The company added 1,401 MW of projects during FY26.
New initiatives
- The company is using existing operational-project transmission infrastructure for its commissioned BESS.
Problems & risks
- Grid availability was lower because a transmission line was shut down for 20 days for LILO connection work.
- FY26 grid availability fell because of a transformer failure at a Rajasthan solar-park pooling substation.
- FY26 grid availability also fell because of a planned 20-day transmission-line shutdown for LILO connection work.
What to watch
- Whether operating margin recovers from 87.40% after the 2.07-percentage-point QoQ decline.
- Whether interest-cost growth moderates from +64.18% YoY while other income remains 90.23% of pre-tax profit.
- Progress against management's stated plan to raise the central-offtaker share to 84% from 67%.