Data centers are expected to be in focus during the announcements under Budget 2026. The sector continues to see strong structural growth driven by cloud adoption, artificial intelligence and increasing data consumption. Data centers use a lot of energy. Therefore, industry people want policy support on good availability of power, access to green energy and easy financing. Although the number of companies directly involved in data centers and listed data-centre operators is limited, marketers remain optimistic given the opportunity and strong visibility on long-term demand.
A recent report by CRISIL Ratings estimates that revenues of India’s data-centre operators will grow at an annual rate of 20-22 per cent to around Rs 20,000 crore by FY2028. This is supported by the increasing use of digital platforms by enterprises and consumers and increasing demand from hyperscale cloud providers. To meet this demand, the installed capacity is expected to almost double to 2.3-2.5 GW by March 2028.
CRISIL believes that there are three main factors responsible for the expansion of this sector – rapid adoption of public cloud services by enterprises, increasing investments in Artificial Intelligence, and the rollout of 5G. 5G is driving demand for low-latency applications such as video streaming, gaming, and Internet-of-Things services.
India’s data-center capacity will increase five times by 2030
A Jefferies report of November 2025 estimated that India’s data-center capacity would grow fivefold to about 8 gigawatts by 2030. This means that approximately 6.4 GW of new capacity will be added in the next 5 years. This expansion will require an estimated $30 billion in capital spending on facilities. The typical construction cost will be 40-50 lakh dollars per MW. Data-center leasing revenues are projected to grow fivefold to $8 billion by the end of the decade.
Which shares will keep an eye on
Large domestic companies like Reliance Industries, Bharti Airtel and AdaniConneX can contribute 35-40 percent of the total capacity by 2030. Jefferies says rising data traffic, increased adoption of AI, strict data-localization norms, near-full occupancy in hubs like Mumbai and Chennai are maintaining the sector’s momentum. Due to this, investors are looking at players from across the ecosystem to invest in this theme. These include operators and platform players such as Bharti Airtel (Nextra Data), Tata Communications, Reliance Industries (Jio Platforms) and real estate developer Ananth Raj. There are also engineering and EPC firms like Larsen & Toubro and KEC International.
Power and backup solution providers such as ABB India, Cummins India, Kirloskar Oil Engines and Hitachi Energy, as well as cooling solution specialists such as Blue Star and Voltas, are seen as potential beneficiaries from the sector’s expansion. Analysts expect these stocks to be in focus during the Union Budget announcement on February 1.