CleanMax targets C&I renewable growth as data centre demand expands

Investment View and Valuation

JM Financial Institutional Securities initiated coverage of Clean Max Enviro Energy Solutions on September 21, 2026, with a BUY recommendation. The broker views CleanMax as India’s largest pure-play commercial and industrial renewable energy player, with a 13.6 per cent to 14 per cent share of the renewable open-access market.

JM Financial values CleanMax at 10.5x FY28E run-rate EBITDA, deriving a target price of Rs 1,501 and implied upside of 17 per cent from the report’s Rs 1,279 CMP.

CleanMax operates through two segments: RE Power Sales, which supplies electricity from wind and solar projects under power purchase agreements, and RE Services, which includes turnkey project development and carbon services.

Open-Access Renewable Demand Outlook

JM Financial’s central thesis is that commercial and industrial open-access renewable demand should remain strong beyond its existing tariff-arbitrage driver. Green open-access solar costs Rs 3 to Rs 4 per kWh, or Rs 4 to Rs 6 per kWh for group captive projects, compared with industrial grid tariffs of Rs 7 to Rs 10 per kWh.

The broker expects demand to be supported by grid power deficits, industrial electrification, rising captive-power requirements and data-centre expansion. Commercial and industrial consumers account for nearly half of India’s electricity consumption. Corporate decarbonisation commitments and demand from data centres and AI customers are also expected to remain important growth drivers.

Operating Scale and Customer Profile

CleanMax’s operational capacity rose from 1 GW at March 31, 2023 to 4.2 GW at June 30, 2026, consisting of 3.5 GW in RE Power Sales and 0.7 GW in RE Services. Including 2.5 GW of contracted and under-construction capacity, its total RE Power Sales portfolio is 6 GW.

JM Financial considers the increase in repeat orders evidence of customer stickiness. Under the group captive model, customers hold at least a 26 per cent equity stake in project-specific special-purpose vehicles, which raises switching costs.

Financial Performance and Margin Trends

Actual revenue and EBITDA grew at compound annual growth rates of 27 per cent and 45 per cent, respectively, from FY23 to FY26. EBITDA margin improved from 40 per cent in FY23 to 59 per cent in FY26, supported by operating leverage and a higher RE Power Sales revenue mix.

The RE Power Sales revenue mix increased from 62 per cent in FY24 to 73 per cent in FY26. Q1 FY27 EBITDA margin declined to 51 per cent from 66 per cent in Q1 FY26 because the RE Power Sales mix was 63 per cent versus 89 per cent. However, adjusted EBITDA margins improved to 87 per cent in RE Power Sales and 11 per cent in RE Services, from 78 per cent and 9 per cent respectively.

Growth Forecasts and Balance Sheet Outlook

JM Financial estimates RE Power Sales capacity additions of 1.4 GW in FY27E, 1.5 GW in FY28E and 1.5 GW in FY29E. It forecasts revenue of Rs 32,308 million in FY27E, Rs 43,455 million in FY28E and Rs 55,955 million in FY29E, with EBITDA margin increasing to 69 per cent by FY29E.

The broker expects net debt to EBITDA to decline from 10x in FY26 to 6.5x by FY29E. CleanMax’s cost of debt had already fallen from 9.5 per cent at March 31, 2024 to 8.4 per cent at June 30, 2026 after CARE upgraded its rating to CARE AA-/Stable.

Key Risks and Execution Concerns

• Higher discom charges could reduce open-access savings.
• Adverse regulation, greater commercial and industrial competition and tariff renegotiation pressure could affect growth and profitability.
• Grid-infrastructure constraints could limit project utilisation and expansion.
• Curtailment at the 525 MWp Bikaner II CTU solar project remained a specific concern, with grid availability at 30 per cent during trailing Q1 FY27. Management expected curtailment to remain an overhang through FY27.
• The forthcoming ALMM-II regime and the Deviation Settlement Mechanism could raise costs or penalties for CTU-connected assets.