Stocks to Benefit from ₹8,48,100 Cr investment in data centers in India by FY27

India’s data center market has experienced remarkable growth, drawing $60.3 billion in investment commitments from domestic and global investors between 2019 and 2024. According to a report by CBRE, a leading real estate consultancy, this momentum is expected to persist, with total investments projected to surpass $100 billion (Rs.8,48,100 crore) by 2027. 

CBRE Report on Data Centre 

India’s data center market has attracted over US$ 60 billion (Rs.5,08,860 crore) in investments over the past six years, with inflows projected to exceed US$ 100 billion (Rs.8,48,100 crore) by FY27, as per CBRE South Asia. 

Capacity is expected to reach 2,070 MW by FY25, up from 1,255 MW currently, with Mumbai, Chennai, Delhi-NCR, and Bengaluru accounting for 90 percent of the total. Leading states include Maharashtra, Tamil Nadu, Telangana, Uttar Pradesh, and West Bengal. 

The growth is driven by increasing digital consumption, global investments, and favorable government policies such as the 2020 Draft Data Centre Policy and the 2023 Digital Personal Data Protection Act. Sectors like BFSI, technology, and telecommunications, along with AI-driven workloads and internet penetration, are key catalysts. India is on track to become a global data center hub. 

Here are the few Data Center stocks to benefit from new investments:

1. Larsen & Toubro Ltd 

With a market capitalization of Rs.5.3 lakh crore, the share price of Larsen & Toubro Ltd closed at Rs.3,887.00 per share on Friday, rising 0.7 percent from its previous close. 

Larsen & Toubro (L&T) has ventured into the data center and cloud services sector with its initiative, L&T-Cloudfiniti, positioning itself to capitalize on the anticipated growth in data center investments. 

Despite being a new entrant, L&T leverages the strengths of its parent organization and its subsidiaries, LTIMindTree and L&T Technology Services, to establish a strong foundation. The company has already made a mark by constructing significant data centers for both governmental and private clients across India. 

The data center and cloud services division of L&T provides comprehensive solutions, encompassing data center infrastructure, multi-cloud services, cloud management, network security, and application integration. 

2. ABB India Ltd 

With a market capitalization of Rs.1.62 lakh crore, the share price of ABB India Ltd closed at Rs.7,703.25 per share on Friday, rising 0.6 percent from its previous close.

ABB India is well-positioned to benefit from increasing data center investments, offering solutions like high-efficiency transformers, switchgear, circuit breakers, and UPS systems for reliable power distribution. Its advanced cooling systems further support energy efficiency by maintaining optimal temperature and humidity while reducing costs. 

The company also provides a Data Center Infrastructure Management (DCIM) system, integrating software and hardware to enable effective monitoring and optimization of infrastructure. With local and remote monitoring capabilities, ABB ensures enhanced reliability and operational efficiency for modern data centers. 

3. Cummins India Ltd 

With a market capitalization of Rs.99,988 crore, the share price of Cummins India Ltd closed at Rs.3,599.9 per share on Friday, falling 0.4 percent from its previous close. 

Cummins India Ltd specializes in designing, manufacturing, distributing, and servicing diesel and alternative fuel engines ranging from 2.8 to 95 liters, along with power generator sets of up to 3,000 kW (3,750 kVA) and related components and technology. 

As a leading provider of backup power solutions for the data center industry, supported by an extensive global service network, Cummins India is well-positioned to benefit from the rapid growth in data center investments. 

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4. Schneider Electric Infrastructure Ltd 

With a market capitalization of Rs.18,145 crore, the share price of Schneider Electric Infrastructure Ltd closed at Rs.731.00 per share on Friday, falling 3 percent from its previous close. 

Schneider Electric has opened a new manufacturing facility in Bangalore, India, with a Rs.100 crore investment. Spanning 6.5 acres, the plant will produce cooling solutions for data centers, telecom, and industrial applications, with 85 percent of products intended for export. 

To meet growing global and domestic demand, Schneider plans to invest Rs.3,200 crore by 2026, enhancing its manufacturing capabilities and supporting the global data center market from India. 

In Q1FY25, the company reported a 20 percent year-on-year increase in revenue to Rs.593 crore and a 37 percent rise in net profit to Rs.48 crore. 

5. Techno Electric & Engineering Company Ltd 

With a market capitalization of Rs.17,954 crore, the share price of Techno Electric & Engineering Company Ltd closed at Rs.1,470.00 per share on Friday, falling 4.5 percent from its previous close. 

The engineering company is venturing into the data center development sector as an operator, planning to invest $1 billion to establish data centers with a total capacity of 250 MW across India by 2030.

Currently, it is constructing a 24 MW facility in Chennai. Additionally, the company can leverage its expertise in engineering, procurement, and construction to act as an EPC partner for other firms developing data centers in India. 

In Q1FY25, the company reported a 37 percent year-on-year increase in revenue to Rs.375 crore and a staggering 292 percent rise in net profit to Rs.98 crore. 

Written by – Siddesh S Raskar 

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