Data centre operators likely to invest up to ₹60,000 cr by FY28, revenue to hit ₹20,000 cr: Crisil

India’s data centre operators are expected to clock annual revenue growth of 20-22% through fiscal 2028, taking the industry’s topline to around Rs 20,000 crore, ratings agency Crisil said on Tuesday.

To meet rising demand, the country’s data centre capacity is projected to double to 2.3-2.5 gigawatt (GW) by March 2028.

The sharp scale-up will require capital expenditure of ₹55,000-65,000 crore between fiscals 2026 and 2028, much of which will be funded through debt, the agency said.

“The industry is expected to incur capex of ₹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," said Nitin Bansal, Associate Director, Crisil Ratings.

Crisil expects 1.1-1.3 GW of incremental capacity to be commissioned over fiscals 2026-2028, supported by strong demand and India’s relatively low data centre density of about 65 MW per exabyte. This, it said, should lead to utilisation levels of 90-95%, similar to the past three years.

“Our analysis of data centre operators making up 75-80% of the operational capacity in India indicates healthy revenue growth of 20-22% will emanate from robust industry capacity addition, which is expected to double by March 2028,” said Anand Kulkarni, Director, Crisil Ratings.

The growth outlook is underpinned by accelerating cloud migration among enterprises, rising investments in AI-led high-density computing and the expansion of 5G services.

The report said long-term customer contracts and high switching costs ensure strong revenue visibility, with hyperscalers now accounting for more than half of capacity tie-ups.

However, their growing bargaining power and plans to set up captive data centres could exert pricing pressure on third-party operators, it cautioned.

Crisil said timely commissioning of new facilities and securing customer agreements at adequate rates will be key monitorables for operators going ahead.