New Delhi [India], June 3 (ANI): India’s industrial equipment manufacturers will likely dig a capex opportunity of USD 35 billion, profiting from India’s growing data center (DC) industry, says Nomura. The Indian DC industry is growing at a rapid speed with DC IT load increasing from Rs 350MW in 2019 to Rs 1.5-1.6GW in 2025, reflecting a Rs 29 per cent CAGR versus Rs 20 per cent globally, it said.
The brokerage firm noted that the DC industry is expected to grow to “Rs 7GW, at a CY25-30F CAGR of +30%" unlocking attractive opportunities for industrial equipment manufacturers.
“We estimate incremental capacity of Rs 5.1GW until CY30F will provide a capex opportunity of USD 35 billion, a majority of which will be captured by industrial equipment manufacturers supplying electrical/mechanical and cooling solutions to DCs," said Nomura.
“India’s share in global DC capacity consequently increased from Rs 1.5% in 2019 to Rs 2-3% in 2025. Our analysis, based on announced pipelines, suggests the industry has visibility on +15GW of incremental capacity over the next decade, and we expect India’s DC capacity to reach Rs 7GW by CY30F (+30% CAGR)," it said.
The industry is being supported by increasing cloud/AI adoption and rapid digitalization. Furthermore, “India remains cost-efficient with construction costs of Rs USD6-7mn/MW versus Rs USD10-18mn/MW across developed APAC and Western markets," noted Nomura.
“In our view, competitive electricity sourcing at Rs USD7c-8c/KW through open access, renewable PPAs, and captive power arrangements further strengthens India’s operating cost advantage," it said.
At the same time, the DC industry, led by “led by a large announced pipeline (+15GW) on the supply front," is creating favorable prospectus for the industrial equipment manufacturers owing to “robust demand and sustainable premium pricing trends," noted Nomura.
“Companies operating in switchgear, transformers, generator sets, UPS systems, cooling equipment, and rack infrastructure should benefit from sustained premium pricing and multi-year order visibility. Overall, this presents a compelling long-term opportunity across both DC developers and broader supply chain," the report added.
The brokerage firm further noted that “the most attractive exposure is in the industrial supply chain, for investors. “We estimate five product categories: (i) medium- and low-voltage switchgear and transformers, (ii) UPS and battery systems, (iii) backup diesel and gas gensets, (iv) precision cooling and liquid-cooling distribution units, and (v) rack, busway, and structured cabling infrastructure together absorb 60-75% of a DC’s USD10-22mn/MW capex budget," it said.(ANI)
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