India's data centre sector is undergoing a structural transformation driven by AI adoption and hyperscaler investments. The Ministry of Power projects electricity demand from data centres to reach 13.6 GW by FY32, nearly doubling from an earlier estimate of 13.56 GW to 26.3 GW within months. This creates a massive opportunity across the power infrastructure value chain, with two companies positioned at opposite ends: CleanMax Enviro Energy Solutions supplying renewable energy and Diamond Power Infrastructure providing the physical cabling infrastructure.
CleanMax has established a dominant 35% market share of clean energy contracts for global hyperscalers including Meta, Amazon, Apple, and Google. This positioning has driven explosive growth in contracted capacity from 1,852 MW in March 2024 to 6,003 MW by March 2026—a 3.2x expansion. The data centre and AI segment alone grew 9.9x from 254 MW in FY24 to 2,380 MW by FY26, now representing 42% of CleanMax's total contracted portfolio. Transcripts +3
The company's business model is built on exceptional revenue visibility through long-term Power Purchase Agreements (PPAs) with a weighted average tenure of 23.17 years and tariffs of ₹3.9-4 per unit. This annuity-like structure provides predictable cash flows, with 74% of new contracted capacity coming from existing customers and approximately 85% of customers rated AAA or subsidiaries of multinational companies. The 23-year average PPA tenure, compared to a weighted average loan tenure of approximately 19 years, creates favorable asset-liability matching. InvestorPresentations +2
However, this growth comes at a cost. Every 1 GW of data centre IT load translates to 6 GW of new renewable energy capacity plus storage, requiring approximately ₹40,000 crore in investment. CleanMax's net debt stands at ₹10,280 crore with a net debt to EBITDA ratio of 5.0x-5.5x, creating significant financial leverage. The capital-intensive nature of the business results in a Cash ROIC of approximately 13%, substantially lower than manufacturing peers. Transcripts +3
Diamond Power Infrastructure operates at the other end of the value chain, supplying the physical infrastructure that connects data centres to the power grid. The company recently secured a ₹435 crore order for Hyderabad data centre projects (HYD22 to HYD26), representing 11.8% of its total executable order book of ₹3,687.55 crore. This order demonstrates Diamond Power's ability to capture 8-10% of data centre project capital expenditures, which typically allocate 25-35% to electrical infrastructure with cables representing a significant portion. InvestorPresentations
The company is strategically transitioning to higher-margin products, targeting high-tension cables to reach 50-55% of revenue by FY28. This shift is crucial because HT/EHV cables typically generate 14%+ margins compared to 8-9% for low-voltage cables. Diamond Power's EBITDA margin expanded 196 bps to 12.3% in Q1 FY27, driven by operating leverage as capacity utilization increased from 34% to higher levels. InvestorPresentations
A key enabler of this strategy is the converted rod mill project, which will add ₹1,880 crore of revenue potential at full utilization specifically for copper LV cables used in data centres. This facility, with a capacity of 3,502 km per month, directly addresses data centre infrastructure requirements and supports Diamond Power's target of ₹1,500 crore in data centre orders by FY28. InvestorPresentations
Diamond Power's growth is directly linked to capacity utilization improvements. The company expects cable utilization to reach 50-52% in FY27 and 60% in FY28, up from the current 34%. This utilization ramp is the primary driver behind management's revenue guidance of ₹4,300-4,500 crore for FY27. The strong operating leverage is evident in Q1 FY27 results, where revenue grew 129% YoY to ₹690 crore while EBITDA surged 172% to ₹85 crore.
The ₹2,800 crore scheduled for delivery by March 2027 provides near-term visibility, with data centre cable sales expected to contribute ₹750 crore before March 2027. However, this creates vulnerability to construction delays—if data centre construction slows, Diamond Power's order book execution would be immediately impacted.
CleanMax's growth trajectory is different. Management targets commissioning 1.5 GW of new Power Sales operational capacity in FY27, which is critical to achieving the guidance of minimum ₹3,000 crore EBITDA by FY28. This represents 2.3x growth from FY26 EBITDA of ₹1,295 crore. The path requires scaling operational capacity from 3.1 GW (March 2026) to 4.6 GW (April 2027), a 48% increase. InvestorPresentations +2
The two companies represent fundamentally different investment propositions.
The 23-year PPAs provide exceptional revenue visibility, but the high leverage (5.0x-5.5x net debt/EBITDA) and capital intensity (₹40,000 crore per GW) create financial rigidity. The company is more vulnerable to long-term slowdowns but protected in the near term by binding contracts. InvestorPresentations +1
The debt-light position post-QIP provides financial flexibility, but the project-based order book execution model creates immediate exposure to construction cycles. The company is more vulnerable to near-term slowdowns but has greater flexibility to adapt.
The customer quality differential is also significant. CleanMax's high exposure to AA/AAA-rated corporates and 72-80% repeat order rate provides payment security and customer stickiness. Diamond Power faces customer concentration risk with 40%+ orders from the Adani group, though management is targeting reduction to 20%.
CleanMax faces an additional complexity in meeting round-the-clock power requirements for AI workloads. The company is integrating Battery Energy Storage Systems (BESS) at a premium of ₹3.00-4.00 per unit of power, which adds significant cost but enables firm power supply. While BESS costs have fallen dramatically from ₹10.18/kWh in 2022-23 to ₹2.1/kWh in recent tenders, the premium still impacts project economics. Transcripts +1
The integration is necessary because data centres draw near-constant load while solar generates for part of the day and wind varies. BESS enables CleanMax to provide firm, dispatchable power to AI workloads, but the capital requirement adds to the already substantial investment needs. The company's net debt is expected to reach ₹16,000 crore in steady-state FY28, with net debt to run-rate EBITDA guidance of 5.0x-5.5x. InvestorPresentations +1
The Ministry of Power's projections provide validation for both companies' management estimates, though with significant uncertainty. The projection nearly doubled from 13.56 GW to 26.3 GW within months, highlighting the volatility in demand forecasting. CleanMax's estimate of 30-60 GW renewable installations needed appears conservative even under aggressive government projections, while Diamond Power's target of 20% of revenue from data centre cables is challenging but achievable. Transcripts
A slowdown in data centre construction would differentially impact the companies. Diamond Power would face immediate impacts on its ₹2,800 crore scheduled deliveries by March 2027, while CleanMax's 23-year PPAs provide near-term protection but create long-term exposure to capital intensity and leverage. InvestorPresentations
Both companies are well-positioned to benefit from India's data centre expansion, but investors must understand the distinct risk-return profiles. CleanMax offers stability and predictability with moderate returns, while Diamond Power offers higher returns with higher volatility and cyclicality. The choice depends on investment horizon, risk tolerance, and view on the sustainability of India's data centre construction boom.
