Mumbai (Maharashtra) [India], November 25 (ANI): The revenue of India’s data centre operators is expected to reach nearly Rs 20,000 crore annually by fiscal year 2028, according to a report released Tuesday by Crisil Ratings. This reflects strong annual growth of 20–22 percent as both enterprises and retail consumers accelerate their use of digital technologies and platforms.
Crisil noted that to meet this rising demand, industry capacity is projected to double, reaching 2.3–2.5 gigawatts (GW) by March 2028. While capital expenditure is set to increase significantly and will require substantial debt funding, the agency expects operators’ credit profiles to remain stable. Steady cash flows from existing facilities are likely to help maintain leverage metrics, including EBITDA, at manageable levels.
According to Crisil’s assessment of operators representing 75–80 percent of India’s current capacity, the sector’s expansion will be driven by three key factors. These include rapid adoption of public cloud services as enterprises continue large-scale digital transformation, rising investments in artificial intelligence (AI) that are increasing demand for high-density computing infrastructure, and the growing reach of 5G technology, which is boosting the need for low-latency applications such as video streaming, gaming, and IoT devices. This, in turn, is driving demand for edge-proximate data centres.
The report underscores strong customer stickiness in the sector due to high switching costs and long-term contracts, particularly with hyperscalers. These large cloud service providers now account for more than half of all capacity tie-ups, offering operators predictable and stable cash flows.
However, Crisil cautioned that hyperscalers’ substantial bargaining power and their expected shift toward establishing captive data centres could heighten competition and potentially create pricing pressure for third-party operators. Although contract pricing has remained mostly stable over the past two years, it remains an important area to monitor.
Looking ahead, the agency said the sector’s performance will depend on operators’ ability to commission new capacity on time and secure customer commitments at sustainable pricing levels. (ANI)
About The Author
