Clean Max Enviro Energy shares: Macquarie's target price sends stock soaring 8%

Shares of Clean Max Enviro Energy Solutions Ltd, India's largest pure-play C&I renewables platform by capacity, rallied 8 per cent in Wednesday's trade after foreign brokerage Macquarie initiated coverage on the stock with an 'Outperform' rating and a target price of Rs 1,700. A repeat Commercial and Industrial (C&I) business and data and AI exposure support CleanMax's growth and longer-term earnings upside in an underpenetrated C&I renewables market, Macquarie said.

Following the development, the stock rose 7.78 per cent to hit a high of Rs 1,480.20 apiece on BSE.

Macquarie said it views CleanMax as a corporate-energy platform rather than a conventional IPP, supported by 600 customer relationships, multi-state regulatory capabilities and integrated energy solutions.

"Repeat C&I business supports steady growth, while Data & AI transactions (c.42 per cent of contracted capacity) provide longer-term upside," it said.

Macquarie forecast 5 GW of incremental capacity through FY29, driving a Power Sales Ebitda CAGR of 50 per cent over FY26-29. While capex may keep free cash flow (FCF) negative and leverage elevated, lower borrowing costs, strategic co-investments and Ebitda growth may reduce net debt/Ebitda towards 7.5 times by FY29, Macquarie said.

"We believe sustained customer savings versus conventional procurement will support faster capacity additions than the market expects. While cognisant of regulatory, execution and dilution risks, our 25 per cent-weighted bull case assumes annual additions of more than 2 GW and an FY26-29E Ebitda CAGR of 60 per cent," Macquarie said.

The brokerage forecast FY26-29E revenue and Ebitda CAGRs of 42 per cent and 51 per cent, respectively, driven by 5 GW of incremental capacity additions.

"Our scenario-weighted valuation delivers a Rs 1,700 target price, implying 26 per cent upside from current levels. Catalysts include upgrade to FY27E/28E commissioning guidance, increased transmission availability and lower borrowing costs," Macquarie said.

Macquarie said India's C&I renewable opportunity combines structurally rising electricity demand with a large substitution pool. C&I users account for more than 50 per cent of consumption, with two-thirds reliant on relatively expensive distribution company (DISCOM) supply. Renewable penetration could materially outpace demand growth as corporates seek lower costs, with potential savings of up to 35 per cent, and decarbonisation, it said.