New Delhi, Nov 25 Revenue of India’s data centre operators is expected to reach Rs 20,000 crore annually by fiscal 2028, translating to a robust annual growth of 20-22 per cent as both enterprises and retail consumers dial up usage of digital technologies and platforms, according to a report on Tuesday.
To cater to the buoyant demand, capacity in the industry is expected to double to 2.3-2.5 gigawatt (GW) by March 2028.
"While capital expenditure (capex) is set to rise and will require sizeable debt funding, credit profiles should remain healthy as stable cash flows from operating capacities will keep leverage (Ebitda) in control," Crisil Ratings said in its report.
According to the report, data centre operators making up 75-80 per cent of the operational capacity in India indicate as much.
The data centre industry growth will be driven by three factors: the rapid adoption of public cloud by enterprises amid ongoing digital transformation and technological advancements.
Growing investments in artificial intelligence (AI) technologies, and proliferation of 5G technology, which drives demand for low-latency applications, such as video streaming, gaming, and internet of things-based devices, requiring data centre capacity in proximity to demand.
“The healthy revenue growth of 20-22 per cent for data centre operators will emanate from robust industry capacity addition, which is expected to double by March 2028," said Anand Kulkarni, Director, Crisil Ratings.
The incremental capacity of 1.1-1.3 GW estimated to be commissioned during fiscals 2026-2028 is expected to achieve timely tie-up backed by strong demand and India’s data centre density of just 65 MW per exabyte, one of the lowest globally.
"This will translate into comfortable utilisation of 90-95 per cent, in line with the past three fiscals," he added.
The strong demand environment provides significant headroom for the supply side to catch up.
According to the report, credit profiles of data centres also benefit from customer stickiness, given the high switching costs and long-term agreements with customers, especially hyperscalers.
Notably, the share of hyperscales in the overall revenue mix has been rising. They now account for more than half of the capacity tie-ups, providing stable and predictable cash flow visibility to data centre operators.
“The industry is expected to incur capex of Rs 55,000-Rs 65,000 crore over fiscals 2026-2028 to cater to the surging demand. While this would require sizeable debt funding, growing Ebitda from operational capacities will keep leverage steady at 4.6-4.7 times and support credit profiles,” said Nitin Bansal, Associate Director, Crisil Ratings.
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