India's AI and Cloud Infrastructure: Key Sectors and Stocks to Watch

India’s data centre capacity is projected to more than double from 1 GW today to over 2 GW by 2026, with analysts forecasting a five-fold expansion to 8 GW by 2030. This growth is expected to be fueled by a $30 billion CapEx. Four categories of listed companies sit in the path of that spending. But not all of them are equal in terms of valuation, order book visibility, or how well-known the opportunity already is.

Power Equipment: The First Layer of Every Data Centre

Data centres consume massive amounts of electricity. A large hyperscale campus can use power comparable to a small town. More importantly, that power must remain uninterrupted. This creates demand for transformers, switchgear, substations, backup systems, and grid integration equipment. Siemens Energi India, ABB India, Hitachi Energy India, CG Power, and Cummins India are the primary listed beneficiaries. The order book data confirms the thesis is already playing out. ABB India’s Q4 orders surged 52% year-on-year to Rs 4,096 crore, its highest quarterly intake in five years, driven by strong traction in data centres, automotive, and railways, with an order backlog of Rs 10,471 crore providing clear revenue visibility.

The catch is valuation. Hitachi Energy India trades at a PE of over 170x, ABB India at approximately 91x, and Siemens Energy India at around 95x, suggesting substantial future growth is already priced into these stocks. These are quality businesses with confirmed data centre exposure, but investors entering today are paying for tomorrow’s earnings in advance. The story is real. The margin of safety is thin.

Cables and Connectivity: Steady, Less Celebrated

Every server rack inside a data centre connects to thousands of others through fibre optic and copper cabling. The data centre boom is also a cable boom. Polycab India, KEI Industries, Apar Industries, and Finolex Cables are the primary listed plays, alongside Tata Communications and RailTel for network backbone exposure.

This category is less discussed than power equipment, which may be its advantage. The stocks have not been re-rated as aggressively on the AI theme, yet the demand linkage is just as direct. Every gigawatt of data centre capacity added translates into cable procurement that runs through these companies’ order books. For investors looking for data centre exposure without paying the peak multiples of the power equipment stocks, cables deserve a closer look.

Cooling Systems: The Underestimated Opportunity

This is the angle that is structurally under-discussed relative to its importance. Cooling accounts for approximately 40% of a data centre’s total energy consumption. AI compute racks generate significantly more heat per unit than conventional server infrastructure, making precision cooling more critical and more technically demanding than anything built in India before.

Blue Star and Voltas are both actively targeting the segment. Blue Star through chillers and liquid cooling units in advanced development, and Voltas through oil-free centrifugal chillers and single-source MEP bids. Blue Star’s MEP order book stands at Rs 5,080 crore, with data centres a confirmed growth driver.

The smaller and less-followed name is KRN Heat Exchanger, which has expanded capacity nearly six times and is targeting up to 50% market share in heat exchanger supply for large data centre projects, estimating the Google Visakhapatnam campus alone as a Rs 1,500 crore opportunity. Q3 FY26 net profit rose 65% year-on-year, driven by data centre and export demand, with a new plant commissioned in March 2026 already adding over 40 new customers. Of the three cooling names, KRN is the only one where data centres are a primary revenue driver rather than one segment among many.

Data Centre Real Estate: Monetising the Physical Layer

Anant Raj and Macrotech Developers (Lodha) are the clearest listed plays here. Anant Raj has an NCR land bank with a genuine data centre commitment and has brought in a revenue of ~101 crores from this segment. Lodha is targeting 1GW of build-to-suit data centre capacity at its Palava campus near Mumbai, with AWS and STT as confirmed anchor tenants. Among other real estate names, Prestige, DLF, Brigade, the data centre exposure is currently optionality rather than a core business. Worth monitoring, but the thesis requires watching capital allocation, not just press releases.

Market Takeaway

India’s AI story may create many software winners over time, but the near-term listed opportunity could lie in simpler businesses selling physical necessities. No data centre can run without electricity, cooling, cables, and land. That means while operators compete for market share, the suppliers enabling the ecosystem may quietly compound alongside the entire industry. For investors, the smarter question may not be who wins AI but who gets paid to build it.