‘A decadal growth opportunity’ – Nomura highlights five data center product categories and its stock picks

India’s data center industry is likely to record over 30% compound annual growth rate (CAGR) over the calendar year 2025-30, and also end up outperforming the broader Asia-Pacific region, according to brokerage firm Nomura’s latest note on Tuesday, June 2.Nomura sees data centres as a decadal growth opportunity. It said lower capital expenditure and favourable power economics support attractive returns for data centres.

India’s digital, cloud and GenAI adoption is driving the data centre demand, Nomura said, adding that robust demand and sustainable premium pricing trends unlock attractive data centre opportunities for industrial equipment manufacturers.
Nomura has estimated five product categories within this space:

• Medium and low-voltage switchgear and transformers
• UPS and battery systems
• Backup diesel and gas gensets
• Precision cooling and liquid-cooling distribution units
• Rack, busway and structured cabling infrastructure together absorb 60-75% of a data centre’s $10-20 million/MW capex budget.

Nomura said the competitive landscape in India is consolidated and pricing is disciplined. It said players such as ABB India, Siemens, Hitachi Energy, GE Vernova, CG Power, Cummins, among others, act as oligopolistic suppliers across multiple sub-categories.Within this space, Nomura has a “buy” recommendation on GE Vernova and CG Power, a “reduce” rating on ABB India and a “neutral” rating on Siemens and Cummins India.

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