Why Could Data Centres Create the Next Big Opportunity for CG Power and GE Vernova?
About Nomura's Data Centre Thesis
Nomura believes India's data centre industry is entering a decade-long expansion phase driven by digitalisation, cloud migration and the rapid adoption of Generative AI. The brokerage expects the industry to grow at more than 30% CAGR between CY25 and CY30, making it one of the fastest-growing infrastructure segments in the country.
Unlike traditional infrastructure sectors, data centres benefit from recurring demand generated by cloud computing, artificial intelligence workloads, digital payments, e-commerce, enterprise software and government digital initiatives. As computing requirements increase, demand for power equipment, transformers, switchgear and transmission infrastructure is also expected to rise significantly.
The opportunity extends beyond data centre operators and could create substantial business opportunities for industrial equipment manufacturers supplying mission-critical electrical infrastructure.
Key Nomura Observations
🔹 Data centre industry expected to grow at over 30% CAGR during CY25–30.
🔹 India expected to outperform the broader Asia-Pacific region.
🔹 Digitalisation remains a major structural growth driver.
🔹 Cloud adoption continues to accelerate across industries.
🔹 Generative AI is creating a new wave of infrastructure demand.
🔹 Lower capex intensity and favourable power economics support attractive returns.
🔹 Industrial equipment suppliers are likely to benefit significantly.
🔹 Nomura's preferred beneficiaries include CG Power and GE Vernova T&D.
Investors are increasingly focusing on indirect beneficiaries of the AI and cloud boom because equipment suppliers often participate in growth without taking the same level of operational risk as developers. Many traders also follow 👉 Nifty Trading Tip insights to identify emerging infrastructure themes.
Why Data Centres Need Massive Electrical Infrastructure
| Requirement | Potential Beneficiaries |
|---|---|
| Power Distribution Systems | Electrical equipment manufacturers |
| Transformers | Power equipment suppliers |
| Transmission Infrastructure | Grid and transmission companies |
| Backup Power Systems | Industrial electrical suppliers |
| High-Density AI Facilities | Advanced power infrastructure providers |
As AI workloads become more power-intensive, electrical infrastructure is emerging as one of the most important bottlenecks in global data centre expansion.
Strengths and Weaknesses
Strengths🔹 Long-duration structural growth theme. 🔹 AI adoption remains in early stages. 🔹 Strong cloud migration trends. 🔹 Increasing digital infrastructure investments. 🔹 Attractive opportunities for equipment suppliers. |
Weaknesses⚠ Large capital requirements. ⚠ Dependence on reliable power availability. ⚠ Long project execution cycles. ⚠ Technology upgrades remain continuous. ⚠ Regulatory and approval risks. |
Unlike many infrastructure segments, demand visibility for data centres is increasingly linked to secular technology trends rather than traditional economic cycles.
Opportunities and Threats
Opportunities🔹 Rapid GenAI adoption. 🔹 Expansion of hyperscale data centres. 🔹 Growth in cloud infrastructure. 🔹 Rising enterprise technology spending. 🔹 Strong demand for power equipment. |
Threats⚠ Delays in data centre investments. ⚠ Power shortages in key regions. ⚠ Economic slowdown impacting spending. ⚠ Higher financing costs. ⚠ Technology disruption risks. |
One notable aspect of Nomura's thesis is the expectation that India will outperform the broader Asia-Pacific region, highlighting the country's favourable digital growth trajectory.
Valuation and Investment View
🔹 Nomura views data centres as a decadal growth opportunity rather than a short-term cyclical trend.
🔹 Equipment suppliers may benefit from sustained order inflows as capacity expands.
🔹 CG Power and GE Vernova T&D are identified as preferred beneficiaries.
🔹 The AI infrastructure build-out could support earnings growth for several years.
Investors tracking infrastructure opportunities often combine sector research with BankNifty Trading Tip analysis to evaluate broader market positioning and institutional flows.
Investor Takeaway: Nomura's latest report reinforces the view that data centres could become one of India's largest infrastructure growth themes over the next decade. With industry growth projected above 30% CAGR and India expected to outperform the broader APAC region, opportunities may extend well beyond data centre operators. Derivative Pro & Nifty Expert Gulshan Khera, CFP® believes companies supplying electrical infrastructure, transformers, transmission equipment and power solutions could become some of the biggest indirect beneficiaries of the AI and cloud computing boom. Read free content at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on Data Centres and Power Infrastructure
🔹 Why is Nomura bullish on India's data centre industry?
🔹 How can CG Power benefit from data centre growth?
🔹 Why is GE Vernova T&D a preferred pick?
🔹 How does Generative AI increase power demand?
🔹 Which sectors gain from data centre expansion?
🔹 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
