New Delhi, Nov 25 (NationPress) The revenue generated by data centre operators in India is projected to soar to Rs 20,000 crore annually by the fiscal year 2028, reflecting a strong yearly growth rate of 20-22%. This surge is driven by increasing adoption of digital technologies by both businesses and individual consumers, as reported on Tuesday.

To meet this rising demand, the industry's capacity is anticipated to double, reaching 2.3-2.5 gigawatts (GW) by March 2028.

According to Crisil Ratings, while capital expenditure will increase and necessitate substantial debt financing, the credit profiles of these operators are likely to remain robust due to stable cash flows from their operational capacities, maintaining leverage (Ebitda) under control.

The report indicates that data centre operators account for approximately 75-80% of the operational capacity in India.

The growth of the data centre industry will be fueled by three key factors: the swift adoption of public cloud solutions by enterprises amidst ongoing digital transformation, investments in artificial intelligence (AI) technologies, and the rollout of 5G technology. These advancements are driving the demand for low-latency applications like video streaming, gaming, and IoT devices, which in turn require data centres to be strategically positioned close to their demand centers.

“The anticipated 20-22% revenue growth for data centre operators will stem from significant industry capacity expansion, expected to double by March 2028,” stated Anand Kulkarni, Director at Crisil Ratings.

During the fiscal years 2026-2028, an incremental capacity of 1.1-1.3 GW is projected to come online, driven by strong demand and India's relatively low data centre density of just 65 MW per exabyte, one of the lowest rates globally.

This growth is expected to result in utilization rates of 90-95%, consistent with the previous three fiscal years.

The favorable demand landscape offers ample room for supply to catch up.

The report also notes that the credit profiles of data centres benefit from customer loyalty, primarily due to high switching costs and long-term contracts with clients, particularly hyperscalers.

Importantly, the share of hyperscalers in the overall revenue mix has been increasing, now representing over half of capacity agreements, thereby providing stable cash flow visibility for data centre operators.

“The industry is projected to incur capex of Rs 55,000-Rs 65,000 crore during the fiscal years 2026-2028 to satisfy the escalating demand. Although this will necessitate considerable debt funding, the rising Ebitda from operational capacities will keep leverage stable at 4.6-4.7 times and bolster credit profiles,” remarked Nitin Bansal, Associate Director at Crisil Ratings.