These companies could be the hidden winners of India’s AI data centre push

India’s AI data centre expansion could create opportunities for electrical equipment manufacturers, with JM Financial Institutional Securities saying companies such as ABB, Siemens, Honeywell, Cummins and Kirloskar Oil Engines are well placed to benefit from the investment cycle.Speaking to CNBC-TV18, Priyankar Biswas, Head of Industrials and Logistics Research at JM Financial Institutional Securities, said the non-server portion of setting up a data centre currently costs around ₹60-70 crore per megawatt, with 10-15% of that representing the addressable opportunity for these companies.

“While it may not seem large, if you get into this gigawatt concept, it’s actually a humongous opportunity,” Biswas said, referring to India’s expected growth in AI data centre capacity.
On Kirloskar Oil Engines, Biswas said the company has expanded its offerings in the high-horsepower engine segment and has secured certifications for products of up to 2,750 kVA. He said the company’s recent HyperNext order in the 65-litre category was a “big breakthrough”.
Biswas also said valuations across the sector remain elevated, adding that JM Financial has a positive stance on Honeywell and Kirloskar Oil Engines based on their positioning.On the long-term outlook, Biswas said AI data centre investments differ from sectors that are largely dependent on government capital expenditure, such as railways or highways.

Biswas said one potential constraint to the theme would be countries imposing a moratorium on data centres, citing Singapore and Ireland as examples. He, however, added that India is “not even close” to those levels.

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Watch accompanying video for full conversation.