India is entering a massive digital infrastructure expansion phase. With the Union Budget 2026 introducing potential tax benefits for foreign cloud revenue generated through Indian data centers, the spotlight is now shifting toward companies connected to the data center ecosystem. According to industry discussions, India currently generates nearly 20% of the world’s data, yet only around 3% is stored locally. That gap itself represents a huge long-term opportunity.
Industry veterans are comparing this phase to the software boom of the 1990s. Global tech companies are already committing billions of dollars toward cloud infrastructure, AI computing, and data localization in India. As this ecosystem expands, several Indian companies operating in power systems, cables, cooling, real estate infrastructure, and AI hardware could become indirect beneficiaries.
In this article, we break the data center opportunity into five major categories and analyze companies that may benefit from this trend.
1. Power Backup & Electrical Reliability – Cummins India
Every data center requires uninterrupted power supply. Even a few seconds of downtime can create major operational losses. That is where diesel generators and backup power systems become critical.
Cummins India manufactures high-power generator sets and alternative fuel engines used in large-scale infrastructure projects, including data centers. As India’s data center market grows, demand for reliable backup power solutions is expected to increase significantly.
Key Highlights
India’s data center power market is projected to grow from around ₹9,000 crore to ₹24,000 crore by 2031.
Estimated industry CAGR is nearly 17%.
The company delivered approximately:
15% sales CAGR in the last 5 years
22% profit CAGR in the last 5 years
Positives
Improving operating margins
Strong cost control
Reduced dependence on non-operational income
Strong distribution segment growth
Risks
Industrial sales and exports showed weakness in recent quarters.
The stock is already trading at premium valuations, increasing downside risk if growth slows.
2. Power Transmission & Cable Infrastructure – Polycab India
A data center is not just about servers. It also requires a massive electrical backbone involving high-capacity cables, connectivity systems, and fire-safe infrastructure.
Polycab India is India’s largest wires and cables manufacturer. While many investors associate the company with consumer electrical products, its real strength lies in infrastructure-grade electrical systems.
Why It Matters
India’s data center capacity is expected to rise sharply by 2030, supported by large-scale investments across cloud and AI infrastructure.
Growth Drivers
India’s data center capacity could grow at nearly 30% CAGR.
Expected investments of ₹2–2.5 lakh crore by FY27.
If the company maintains its market share, data center demand alone could potentially generate ₹1,500 crore revenue by FY27.
Strengths
Consistent market share expansion
Strong volume growth
Improving cash conversion cycle
Large future capex plans under “Project Spring”
Risks
Raw material price volatility affects margins.
Rising competition from large industrial players.
Recent promoter selling remains a concern for investors.
3. Data Center Developers & Operators – Anant Raj
Building a data center requires more than hardware. It needs land, power access, connectivity, cooling infrastructure, and long-term operational planning.
Anant Raj is traditionally a real estate developer, but the company is now aggressively entering the data center and digital infrastructure business using its land bank and IT parks.
Business Model
The company offers:
- Colocation services – clients bring their own servers while the company provides infrastructure.
- Cloud services – the company provides computing infrastructure on a subscription basis.
Key Numbers
Data center segment currently contributes around 5.5% of revenue.
Over the last 5 years:
Sales CAGR: 49%
Profit CAGR: 74%
Major Advantages
Large debt-free land bank
Strong margins
Rapid debt reduction
Improving operational efficiency
Future Potential
The company aims to reach 117 MW capacity by FY28. According to management estimates, the data center segment alone could potentially generate more than ₹3,000 crore annual revenue in coming years.
Risks
Majority revenue still comes from real estate.
NCR property demand slowdown could affect overall business.
Data center expansion requires heavy capital expenditure.
4. Cooling & Thermal Management – Blue Star
Data centers generate enormous heat. Without advanced cooling systems, servers can fail or become inefficient. This makes cooling one of the most critical parts of the industry.
Blue Star is widely known as an air-conditioner brand, but its commercial cooling and electro-mechanical projects business plays a major role in industrial infrastructure.
Market Opportunity
India’s data center cooling market may expand from around ₹27,000 crore to nearly ₹85,000 crore by 2031.
Financial Highlights
17% sales CAGR over the last 5 years
32% profit CAGR over the last 5 years
Commercial and infrastructure projects continue to support growth
Strengths
Strong order book
Improving margins
Growing commercial infrastructure demand
Risks
Rising debt levels
Pressure from inventory buildup
Weakness in some consumer-facing product segments
5. AI Servers & Computing Infrastructure – Netweb Technologies India
AI, cloud computing, and high-performance workloads are creating demand for advanced servers and storage systems. This is where hardware-focused infrastructure companies become important.
Netweb Technologies India develops high-end computing systems, including servers and storage infrastructure used in AI and data center ecosystems.
Why Investors Are Watching It
AI-related revenue contribution surged sharply in recent quarters.
Strong growth momentum in enterprise AI infrastructure.
Financial Growth
Over the last 5 years:
Sales CAGR: 49%
Profit CAGR: 96%
Strengths
Rapid AI infrastructure growth
High repeat customer ratio
Strong order book visibility
Aggressive market expansion strategy
Risks
Margins are under pressure due to aggressive pricing.
Customer concentration risk is increasing.
Valuation remains extremely expensive at high PE multiples.
India’s data center ecosystem is still in the early stages of expansion. The growth opportunity extends far beyond just technology companies. Businesses involved in power systems, cables, cooling, real estate infrastructure, cloud services, and AI hardware could all participate in this long-term trend.
However, investors should remember that strong industry themes do not automatically guarantee successful investments. Valuations, execution capability, debt levels, competition, and market cycles will continue to play a major role.
The data center boom may become one of India’s biggest infrastructure stories over the next decade — but careful research and disciplined investing remain essential.
Disclaimer
This article is for educational and informational purposes only and should not be considered investment advice or a stock recommendation. Investors should conduct their own research and consult a financial advisor before making investment decisions.
Investments in the securities market are subject to market risks. Read all related documents carefully before investing.
