New Delhi, Nov 25 (LatestNewsX) – The market for India’s data‑centre operators is expected to reach an annual turnover of ₹20,000 cr by the end of FY‑2028, a trajectory that translates into a robust 20‑22 % year‑on‑year rise. Businesses and consumers alike are increasingly adopting digital platforms, driving this growth, the report said on Tuesday.
To meet the surging demand, industry capacity is projected to double, hitting roughly 2.3‑2.5 GW by March 2028.
“Capital expenditure (capex) will climb and will need sizeable debt financing, yet the sector’s credit profiles should remain solid because steady cash flows from existing capacities will keep leverage – measured by Ebitda – under control,” Crisil Ratings explained in its analysis.
Data‑centre operators now account for about 75‑80 % of India’s operational capacity, the report added.
Growth in the sector is set to be propelled by three major forces: the rapid uptake of public cloud services by enterprises amid a broader digital transformation agenda; increasingly heavy investment in artificial intelligence (AI) technologies; and the rollout of 5G, which fuels demand for low‑latency services such as video streaming, gaming, and IoT devices that need data‑centre capacity close to the end‑user.
“The strong revenue expansion of 20‑22 % for data‑centre operators will stem from a solid increase in industry capacity, which is expected to double by March 2028,” said Anand Kulkarni, Director at Crisil Ratings.
The sector is slated to add an extra 1.1‑1.3 GW between FY 2026 and 2028, a new capacity that is likely to be commissioned on time thanks to robust demand and India’s extremely low data‑centre density of just 65 MW per exabyte — one of the lowest figures worldwide.
“This will drive utilisation rates of 90‑95 %, matching the performance of the last three fiscal years,” Kulkarni noted.
A buoyant market backdrop gives the supply side ample room to scale. The report highlighted that data‑centre credit health is further reinforced by customer stickiness – high switching costs and long‑term contracts, especially with hyperscalers, secure a predictable cash‑flow stream.
Hyperscalers now represent more than half of all capacity tie‑ups, bolstering the sector’s revenue mix and providing steady, foreseeable cash flow for operators.
“The industry is expected to invest Rs 55,000‑65,000 cr in capex from FY 2026‑28 to satisfy the growing demand. Although this will require significant debt, expanding Ebitda from operating capacities will maintain leverage around 4.6‑4.7 times and support sound credit profiles,” said Nitin Bansal, Associate Director at Crisil Ratings.
aps/na
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