India’s data center opportunity is no longer a distant theme. Rather, it is translating into tangible demand across power, cooling, and digital infrastructure. The country’s IT load is expected to expand from about 1.7 gigawatt (GW) currently to 7-8 GW over the next five years, driven by AI adoption, cloud expansion, and tailwinds from digitalisation.
This Shift is not just about capacity addition, but it is also reshaping how infrastructure is designed, deployed, and monetised.
These two companies are positioning themselves at different layers of this value chain. One enables power distribution and digital backbone, the other addresses precision cooling and electromechanical execution. Both are already seeing data centers emerge as a meaningful growth driver within their order books and project pipelines.
Let’s take a look…
#1 Schneider Electric Infrastructure: The AI backbone
Schneider Electric (SEIL) specializes in energy management, power distribution, and industrial automation. Its primary business revolves around the creation, design, manufacturing, and servicing of technologically advanced products and systems for power distribution.
It provides power distribution, digital infrastructure, and energy management systems required to power the data centers and hyperscale environments where advanced AI and GPU clusters operate. To support the massive computational demands of modern data centers, SEIL delivers reliable, scalable, and rapidly deployable electrical solutions.
From 1.7 GW to 8 GW: Capturing India’s exponential data demand
SEIL identifies cloud and service providers (data centers) as key “sunrise segments” driving its future growth. The widespread adoption of AI, machine learning (ML), and digitalization is increasing demand for data center power. As a result, India’s IT commission load is projected to grow from about 1.7 gigawatts (GW) today to between 7-8 GW over the next five years.
The ₹20,000 crore support under the national data center policy
This explosive growth is supported by the government’s draft National Data Center Policy. The policy aims to position India as a global data center hub by offering infrastructure status and single-window clearances, along with an anticipated investment of around ₹20,000 crore.
Currently, data center projects contribute to about 10% of SEIL’s total order inflows, and the company expects this share to grow significantly.
Speed-to-market: Modular power skids and prefabricated E-houses
To support this, SEIL plays a key role in building the digital infrastructure backbone for cloud and service providers. Data centers operating massive computing clusters require infrastructure to be built at unprecedented speeds. To address aggressive execution timelines, SEIL provides prefabricated E-Houses and modular power skids.
E-Houses are compact, with mobile substations fully integrated into steel enclosures, bypassing the need for slow civil construction. Modular power skids allow the entire electrical distribution setup to be installed on a single platform as a composite structure, providing plug-and-play benefits that significantly reduce on-site complexity and commissioning time.
SEIL has developed specific, standardized power solutions to address the unique footprint and scalability challenges of modern data centers. The suite consists of Power Train Modules ( 2.5), PIX EZ Panels, and GMSeT Switchgear. SEIL innovated the PTM 2.5 to resolve space constraints in a data center project.
This is a highly compact, type-tested 2.25 MVA packaged substation that meets stringent digital-substation expectations and includes a dry transformer and an LV ICOG panel. SEIL deploys PIX Easy vertical medium-voltage switchboards.
These are bundled with advanced components like PowerLogic P5 relays and ION 9000 meters to ensure operational simplicity and ease of maintenance for future facility expansions.
Natively digital: Next-gen switchgear for predictive facility management
SEIL recently launched the GMSeT, a next-generation, natively digital Gas Insulated Switchgear (GIS) manufactured in India. It features embedded sensors and IoT for medium-voltage applications up to 36 kV, making it highly suitable for data centers. This enables predictable power management.
In addition, SEIL integrates its hardware with sensors to provide visibility into asset health and to enable predictive maintenance.
Profitability profile: Growth amidst exceptional gratuity adjustments
From a financial perspective, sales increased 12.3% year-on-year to ₹2,301 crore in 9MFY26. EBITDA rose 7.6% to ₹339 crore, while margins contracted 70 bps to 14.7%. Net Profit was 10.6% lower at ₹191 crore. The bottom line was impacted by a ₹24.6 crore exceptional item related to changes in gratuity liability under the new labor code.
#2 Blue Star: The Cooling King
Blue Star is India’s leading air conditioning, commercial refrigeration, and MEP (mechanical, electrical, plumbing, and fire-fighting) contracting company. It operates in three primary segments: EMP and commercial air conditioning systems, unitary products, and Professional Electronics and Industrial Systems.
Dominating the 50% commercial air conditioning market
The EMP segment accounts for nearly half of the company’s revenue. Blue Star dominates the commercial market, holding an estimated 50% market share in ducted systems, 45% in scroll chillers, and around 20% in Variable Refrigerant Flow (VRF) systems and screw chillers.
The Unitary Products segment covers residential room air conditioners, air coolers, air purifiers, and commercial refrigeration solutions. Blue Star has steadily grown its residential market share to 14% and aims to reach 15% by FY26. The company provides deep freezers, water-cooled storage units, and modular cold rooms.
Strategic pivot: Positioning for the semiconductor and data center boom
Beyond supplying cooling products, Blue Star aims to build a strong market share and become the preferred choice for customers building data center and semiconductor infrastructure.
Blue Star is expanding its presence in the data center cooling market due to strong demand for infrastructure in the sector. The company views data centers as a key growth vertical that delivers high-margin projects and contributes significantly to its electromechanical projects (EMP) and commercial air conditioning business.
The CDU roadmap: In-house chillers and liquid-cooling innovation
As an established, large-scale player in the chiller market, Blue Star is currently developing specialized data center chillers entirely in-house. The company’s management has noted that they do not require external collaborations or joint ventures to develop these conventional chiller systems.
To address the more advanced cooling requirements of data centers, it is also developing specific liquid-cooling solutions, often referred to as Cooling Distribution Units (CDUs). Because this is a new technological frontier for the company, it is exploring multiple joint-venture partnerships across various geographies.
Financial Vitals: Managing Margins and Labor Code Impacts in 9MFY26
From a financial perspective, sales increased 5% year-on-year to ₹8,330 crore in 9MFY26. EBITDA rose 1.2% to ₹604 crore, while margins contracted 20 bps to 7.3%. Profit Before Tax (before exceptional items) was 12% lower at ₹462 crore. The bottom line was impacted by a ₹56 crore exceptional item due to the new labour code.
Comparison of Valuation and Returns
Schneider distinguishes itself as the peer leader in capital efficiency with one of the industry’s leading return ratios, including Return on Capital Employed (ROCE) and Return on Equity (ROE). Valuation-wise, both companies are still trading at a premium relative to industry multiples, while valuations have cooled below their historical valuations.
| Peer Comparison (X) | |||||
| Company | P/E | 5Y Median P/E | Industry P/E | ROCE (%) | ROE (%) |
| Schneider | 79.2 | 77.6 | 31.2 | 40.9 | 74.0 |
| Blue Star | 62.4 | 65.2 | 41.9 | 26.2 | 20.6 |
India’s data center build-out is moving from policy support to execution, with power and cooling emerging as core enablers. Schneider and Blue Star sit on different ends of this value chain, yet both benefit from the same structural tailwind.
As demand scales, execution capability and capital efficiency will separate long-term winners. Meanwhile, add them to your watchlist and stay tuned.
Disclaimer
Note: Throughout this article, we have relied on data from http://www.Screener.in and the company’s investor presentation. Only in cases where the data were unavailable have we used an alternative, widely accepted, and widely used source of information.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.
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