The global data centre capacity is projected to nearly double from 103 gigawatts to 200 GW by 2030, with AI investment potentially exceeding US$3 trillion. US hyperscalers are expected to spend around US$700 billion in capex in CY26, creating massive infrastructure buildout opportunities. According to The Financial Express, this AI boom is driving demand for both power generation and connectivity infrastructure, creating parallel needs for reliable power and high-speed connectivity that extend beyond traditional data centre operators. In North America, data-centre capacity driven by hyperscalers and AI is expected to double from 63GW to 126GW by 2030, while India offers another major opportunity with data-centre capacity expected to expand seven-fold from 1.6GW to 10GW by 2030.
TD Power Systems (TDPS) is a heavy engineering manufacturer specializing in AC generators and motors, designing and manufacturing power-generation equipment for both conventional and renewable energy applications. The company's product portfolio includes steam turbine generators up to 250 MW, gas turbine generators up to 250 MVA, hydro generators up to 45 MW, and diesel/gas engine generators up to 25 MVA. As reported by The Financial Express, TDPS manufactures heavy-duty AC generators that connect directly to gas engines and turbines, providing continuous, reliable on-site power for data centres. The company sells to OEMs who assemble complete power plants for US data centres, with management indicating the gas turbine and gas engine business as its strongest-performing segment.
Sterlite Technologies (STL) is a global market leader in digital connectivity infrastructure and advanced optical connectivity solutions, holding a 9% global market share in optical fibre cables excluding China. According to The Financial Express, STL designs, manufactures, and installs dense fibre cables and connectors that link chips inside server racks and connect different data centres. The company serves hyperscalers, neo-cloud providers, and regional data centre operators, with notable projects including a leading developer choosing STL to link an upcoming 25 MW data centre in Kolkata and a major hyperscaler using STL's cabling in Mumbai. In Q1FY27, STL's Data Centre & Cloud segment contribution reached 21% of total revenue, up from just 1% in FY26, making it the fastest-growing business avenue. The company's order book surged 155% quarter-on-quarter to ₹18,600 crore in Q1FY27, led by the US hyperscaler order, with momentum continuing with $210 million orders from a leading international telecom infrastructure company and ₹9.6 billion from a domestic telecom operator in the current quarter. As per CLSA, STL secured a $1.1 billion AI data centre order from a US hyperscaler, significantly expanding its AI portfolio through its Neuralis division.
Both companies demonstrated strong Q1FY27 performance with significant growth metrics. STL reported revenue of ₹19.1 billion, up 87% year-on-year, with EBITDA growing 184% to approximately ₹4 billion, yielding a margin of 20.8% - the highest in nearly 20 quarters. Net profit expanded 19.7% to ₹1,970 million. TD Power Systems achieved revenue of ₹6.4 billion, up 71% year-on-year, with EBITDA increasing 72% to ₹1.2 billion and margins at 19%. Net profit grew 72% to ₹860 million. As reported by The Financial Express, STL's revenue contribution from the Americas region surged to 54% in Q1FY27 from 39% in FY26, while TDPS's order backlog stood at ₹22.1 billion with generator and motor manufacturing contributing ₹19.3 billion.
ESDS Software Solution is preparing to launch its IPO, positioning itself as a comprehensive data centre and AI infrastructure provider serving 2,501 customers in FY26 across BFSI, government, and enterprise segments. The company operates five Tier-3 data centres in India and is expanding into GPU-as-a-Service and AI infrastructure. According to the draft red herring prospectus, ₹5.76 billion (80% of IPO proceeds) is earmarked for cloud-computing equipment and data-centre infrastructure, which could substantially increase its capacity. The entire ₹7.2 billion IPO is a fresh issue, with the company targeting expansion into Europe and Southeast Asia to diversify beyond India. ESDS has demonstrated strong profitability improvement with operating margins improving from 41.1% in FY25 to 48.7% in FY26, while the grey market premium stands at ₹280, indicating strong investor interest despite the premium valuation.
Both established players are investing significantly in capacity expansion to capitalize on the data centre boom. TD Power Systems is investing ₹0.5 billion in debottlenecking to scale peak revenue potential to ₹32 billion by FY28, with plans for capacity additions targeting ₹40+ billion for FY29 and FY30. The company expects order inflows to sustain at ₹7 billion per quarter with full-year inflow target of over ₹28 billion. STL plans to invest ₹5 billion per year over the next three years to upgrade manufacturing plants, targeting 70%+ capacity utilization by Q4FY27. The company maintains a net debt-free status and aims to keep Net Debt-to-EBITDA ratio below 1.2 for FY27. CLSA forecasts 14-21% CAGR in revenue and EBITDA between FY27 and FY29 for STL, with further upside possible if current order win momentum continues. As per CLSA, STL's balance sheet is expected to improve significantly, with net debt falling from ₹163.6 crore in FY26 to ₹4.47 crore in FY27, before turning into net cash of ₹438.3 crore in FY28.
