Data centre operator revenue to reach ₹20,000 cr by FY28: Crisil Rating

Revenue of India’s data centre operators is expected to reach around Rs 20,000 crore annually by fiscal 2028, translating to annual growth of 20–22 per cent as both enterprises and retail consumers dial up usage of digital technologies and platforms, said a Crisil Rating report.

 

The report highlighted that to cater to 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 (gross debt/earnings before interest, taxes, depreciation and amortisation [Ebitda]) in control.

 

“Our analysis of data centre operators making up 75–80 per cent of the operational capacity in India indicates as much,” the report highlighted.

 

Anand Kulkarni, director, Crisil Ratings, said: “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. 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.”

 

The data centre industry growth will be driven by three factors, said the report. One, the rapid adoption of public cloud by enterprises amid ongoing digital transformation and technological advancements. Two, growing investments in artificial intelligence (AI) technologies, which will accelerate the demand for high-density computing infrastructure. And three, 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 close proximity to demand.

 

The strong demand environment provides significant headroom for the supply side to catch up.

 

Nitin Bansal, associate director, Crisil Ratings, said: “The industry is expected to incur capex of Rs 55,000–65,000 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.”

 

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 hyperscalers 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.

 

Going forward, the ability of data centre operators to commission capacities in a timely manner and tie up with customers at adequate rates will bear watching.