Why Could Data Centres Become India's Next Decadal Growth Story?
About Nomura's Data Centre Outlook
Nomura believes India's data centre industry is entering a multi-year expansion cycle that could rival some of the country's biggest infrastructure opportunities. According to the brokerage, accelerating digitalisation, rising cloud adoption and the explosive growth of Generative AI are creating unprecedented demand for computing power, storage and network infrastructure.
The sector is expected to witness more than 30% compound annual growth between CY25 and CY30, making it one of the fastest-growing segments within India's digital economy. As businesses increasingly migrate workloads to the cloud and AI applications become mainstream, demand for high-performance data centres is expected to rise sharply.
The data centre opportunity extends beyond operators and could benefit a broad ecosystem of equipment manufacturers, power infrastructure providers and engineering companies.
Key Nomura Takeaways
🔹 India's data centre industry could grow at more than 30% CAGR during CY25–30.
🔹 Digitalisation remains a major long-term demand driver.
🔹 Cloud computing adoption continues to accelerate.
🔹 Generative AI is creating a new wave of infrastructure demand.
🔹 Favourable power economics support attractive project returns.
🔹 Industry pricing remains disciplined due to market consolidation.
🔹 Equipment suppliers may benefit from strong pricing power.
🔹 Five product categories account for nearly 60%–75% of total data centre capital expenditure.
Investors are increasingly tracking data centre-related opportunities because the sector sits at the intersection of AI, cloud computing, power infrastructure and digital transformation. Many market participants also follow 👉 Nifty Trading Tip insights to identify emerging structural themes.
Major Drivers Behind the Data Centre Boom
| Growth Driver | Potential Impact |
|---|---|
| Digitalisation | Higher enterprise technology spending |
| Cloud Adoption | Increased demand for computing infrastructure |
| Generative AI | Massive increase in data processing requirements |
| Power Availability | Improved economics and project viability |
| Industry Consolidation | Disciplined pricing and healthier profitability |
The emergence of AI workloads has fundamentally changed the economics of data centres, with higher-density computing environments requiring significantly greater investments in power, cooling and networking equipment.
Strengths and Weaknesses
Strengths🔹 Multi-year structural growth opportunity. 🔹 Strong demand visibility from AI and cloud adoption. 🔹 Attractive power economics. 🔹 Consolidated industry structure. 🔹 Growing enterprise digital transformation spending. |
Weaknesses⚠ Capital-intensive business model. ⚠ High dependence on reliable power supply. ⚠ Long project development cycles. ⚠ Significant upfront investment requirements. ⚠ Technology upgrade requirements remain continuous. |
The scale of infrastructure investment required means only a limited number of players are likely to emerge as dominant participants over time.
Opportunities and Threats
Opportunities🔹 AI infrastructure expansion. 🔹 Cloud migration by enterprises. 🔹 Government digital initiatives. 🔹 Rising demand for hyperscale facilities. 🔹 Growth opportunities for equipment suppliers. |
Threats⚠ Power shortages or tariff increases. ⚠ Technological obsolescence. ⚠ Delays in infrastructure approvals. ⚠ Global economic slowdown. ⚠ Unexpected increase in competition. |
One of the most important observations from the report is that pricing discipline has remained intact despite rapid capacity expansion, supporting healthy returns on capital.
Valuation and Investment View
🔹 Data centres appear positioned as one of India's most compelling infrastructure themes for the next decade.
🔹 Equipment manufacturers and infrastructure suppliers could benefit alongside operators.
🔹 AI adoption is likely to remain the most powerful demand catalyst.
🔹 Investors should monitor companies exposed to power systems, cooling solutions, networking equipment and digital infrastructure development.
Investors evaluating long-term themes often complement sector research with BankNifty Trading Tip insights to understand broader market trends and institutional positioning.
Investor Takeaway: Nomura's outlook reinforces the view that data centres could become one of India's defining infrastructure growth stories over the coming decade. Driven by digitalisation, cloud adoption and Generative AI, the industry is expected to expand at more than 30% CAGR through 2030. Derivative Pro & Nifty Expert Gulshan Khera, CFP® believes the opportunity extends well beyond data centre operators and could create significant value for companies supplying power infrastructure, cooling systems, networking equipment and digital infrastructure solutions. Read free content at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on Data Centres and AI Infrastructure
🔹 Why is Nomura bullish on India's data centre industry?
🔹 How is Generative AI increasing data centre demand?
🔹 Which sectors benefit from data centre expansion?
🔹 Why are power economics important for data centres?
🔹 What companies could gain from AI infrastructure spending?
🔹 Can India's data centre industry sustain 30% CAGR growth?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
Written by Indian-Share-Tips.com, which is a SEBI Registered Advisory Services
