The unprecedented growth in India’s digital economy has also led to a significant expansion in India’s data center market.
The growth has also been aided by the wider adoption of cloud services as well as the growth of the artificial intelligence sector, with governments stepping up to incentivize investment in the data center space.
According to a report by real estate consultants Cushman & Wakefield (C&W), around 230 megawatts (MW) of data center capacity was likely added in 2024, taking India’s total capacity to around 1.21 GW.
With many greenfield projects under execution across markets next year, C&W expects to commission around 250 MW of additional data center capacity.
Another report by CBRE projects India’s data center capacity to be 2,070 MW by the end of 2025, from 1,600 MW by the end of 2024.
India’s data center market has attracted investment commitments of $60 billion in the last six years, and the cumulative inflow is estimated to surpass $100 billion by the end of 2027, according to CBRE.
The promise has caused the emergence of many Indian companies as major players in the sector, and the boom is reflected in their share prices and operational performance.
Here are four stocks to watch out for to gain from the data center industry boom:
Aurionpro Solutions
Aurionpro Solutions provides solutions with a focus on banking, mobility, payments, insurance, data center services, and government services.
In its data center build services, the company builds physical environments for enterprise data centers, colocation, and hyperscaler data centers, and data centers for research and educational institutes.
In Q2FY25, the company earned a revenue of Rs 2.8 billion, a 32% increase year-on-year. Net profit too increased by 34% at Rs 460 million.
Aurionpro’s share price has grown by more than 54% year-to-date.
The company’s Rs 11.5 billion order book reflects a strong pipeline in banking and tech innovation.
Plans include global market expansion and increased focus on AI-driven enterprise solutions.
It is also confident of achieving a guided growth of over 30% for FY25 while maintaining earnings margins.
Anant Raj
Anant Raj is primarily engaged in the development and construction of IT parks, hospitality projects, office complexes, shopping malls, and residential projects in the State of Delhi, Haryana, Andhra Pradesh, Rajasthan, and NCR.
Additionally, the company has ventured into the data center sector, planning to convert 5.66 million square feet of commercial property into a 300-megawatt (MW) data center.
It has partnered with key government agencies to support this initiative.
In July, Anant Raj also signed an MoU with Google for providing data center infrastructure, DC-managed services, and cloud platforms to various public and private enterprises.
On the earnings front, Anant Raj reported a revenue of Rs 5.1 bn in Q2FY25, a growth of 55% YoY. The net profit after tax for Q2 FY25 was Rs 1 bn, indicating a remarkable 75% growth YoY.
The company’s share price has soared by more than 177% YTD.
Earlier this month, brokerage house Motilal Oswal issued a ‘buy’ tag on the firm, with a price target of Rs 1,000 per share, indicating an upside potential of around 31% from the previous session’s closing price.
Its share price stood at Rs 826.95 at Friday’s close.
“With a planned capacity of 300MW for DC over the next 4-5 years, the company is leveraging its existing technology parks to enhance execution speed and cost efficiency,” Motilal Oswal said.
Cummins India
Cummins India is a key player in providing backup power systems to data centers, offering generators, engines, and alternative fuel solutions.
Its extensive network and diverse offerings make it a critical component of India’s data center ecosystem.
The company posted a Rs 24.9 billion revenue in Q2FY25, a 31% increase year-on-year, and a 37.5% YoY increase in net profit at Rs 4.5 billion.
The company’s share price has increased by about 69% YTD, boosted by rising demand for its solutions. It has a sufficiently high PE ratio of 46.99, which means investors are willing to pay a higher price because of better future growth expectations.
The management of the company anticipates gross margins will stabilize as the product mix normalizes and ongoing cost reduction efforts materialize.
It is expecting double-digit revenue growth in FY25.
ABB India
ABB India is also a major player in providing key services to data centers, like grid connections, data center power distribution, cooling systems, and others.
The company reported a revenue of Rs 29.1 billion in Q2FY25, up 5.2% year-on-year. Net profit stood at Rs 4.4 billion, up 21% YoY.
ABB India’s share price grew 60% in the past year. The company is optimistic about future growth, backed by strong demand and its commitment to sustainability.
Motilal Oswal expects revenue growth of 15%/18%/20% in CY24/CY25/CY26 and margins of 19.0%/18.6%/18.0%, translating into a PAT growth of 51%/16%/16% for CY24/CY25/CY26E.
Voltas
Voltas has carved a niche in the commercial air conditioning segment, offering tailored cooling solutions for data centers.
With India’s data center investments projected to exceed $100 billion by 2027, Voltas is well-positioned for long-term growth.
The company leverages its engineering expertise to provide specialized products essential for data center operations.
Its strategic focus on high-demand segments is expected to drive further share price appreciation and market expansion.
The stock has gained over 74% YTD. The company has an extremely high PE ratio of 101.73,
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