Data center capacity in India is projected to more than double to US$22 billion (around ₹2 lakh crore) by 2030, up from US$10 billion in 2025, according to property consultant Vestian. Vestian states that the sector attracted about $13-15 billion in investments between 2020 and 2024, of which 80% came from foreign investors.
The report further stated that the data center investment pipeline also remains robust at US$ 60-70 billion (about ₹6.5 lakh crore). Hyperscalers drive a significant portion of this investment. Not just India, but the global data center market capacity is also expected to more than double to 100 gigawatt by 2030, up from 40-50 GW currently.
The data center sector in India is expected to benefit massively from the recent tax break. The budget 2026 introduced a tax holiday until 2047 for foreign cloud service providers using Indian data centers, safe harbor provisions, and other incentives. The report states that India’s data center capacity could reach 4-5 GW by 2030, up from around 2 GW by the end of 2026.
Most of this data centre infrastructure remains concentrated in key metros, led by Mumbai, due to strong connectivity and infrastructure. Chennai acts as a global data gateway with multiple submarine cables, while Hyderabad, Bengaluru, and Pune are emerging as secondary hubs.
Against this backdrop, this article discusses two companies (hidden gems) with expanding presence in data centers.
#1 The ₹1.3 Lakh Crore Pivot: Why Lodha is Betting on Palava’s 3GW Power
Lodha Developers is one of India’s largest and most valuable real estate developers. It is known for premium, luxury, and mid-income residential developments. It holds a dominant 10% market share in the Mumbai Metropolitan Region, and has also expanded into Pune, Bengaluru, and even Delhi NCR.
Strategic Pivot: Building India’s Most Reliable Data Center Park
Lodha Developers is transforming its Palava township into a major economic hub by developing one of India’s largest and most reliable data center parks. This initiative is a strategic effort to accelerate value creation through land monetization and to build long-term recurring annuity income.
The Palava Advantage: Power, Water, and Global Clients
The planned data center park at Palava is built on 400 acres of shovel-ready, contiguous land with all necessary approvals in place. It boasts infrastructure capable of supporting Tier 4 data centers, which is the highest reliability standard globally. The site infrastructure aligns with the needs of data centers.
The park has 3 gigawatts (GW) of available power, supplied through a highly reliable network comprising five circuits. Data centers require massive amounts of non-potable water for cooling. Lodha has secured approximately 100 million liters per day of recycled water from a nearby industrial park to reduce costs and improve efficiency.
Global Cost Advantage: Reducing CAPEX by 15% via Green Infrastructure
Thanks to the Maharashtra government’s Green DC policy and the park’s efficient infrastructure, operators at Palava enjoy highly competitive economics and sustainability benefits. Clients can see up to a 15% reduction in CAPEX. A turnkey shell data center, which typically costs $8-12 million per megawatt globally, can be built in Palawa for approximately $6 million.
Data Center Opportunity
Operating costs can be reduced by more than 30%, bringing electricity costs down to $0.06 per kilowatt-hour (kWh), lower than $0.10–0.12 per kWh in the U.S. Furthermore, operators can source 90% of their energy from renewable sources, thereby mitigating the traditionally heavy environmental impact associated with data centers.
The Amazon Web Services and Temasek Connection
The site currently features five existing optical fiber routes, with the potential to scale up to ten. Lodha has already secured marquee global players as anchor clients, specifically Amazon Web Services and ST Telemedia, a Temasek subsidiary. It expects additional hyperscaler or colocation (colo) players to sign up over the next 12 to 18 months.
Furthermore, Lodha has also signed two Memorandums of Understanding with the Government of Maharashtra under its Green Integrated Data Centre Park Policy. This agreement facilitates a massive combined investment of ₹130,000 crores between Lodha and its clients. Lodha employs a dual strategy to monetize this opportunity.
The 8X Multiplier: Why Lodha’s ₹21 Cr/Acre Land Bank is the Real Story
The company has been monetising its surplus land by selling it to data center operators. Even the infrastructure has seen value appreciation, with land prices growing 8X since 2021, from ₹2.6 crore to ₹21 crores per acre. Lodha anticipates this land value to continue accelerating, targeting ₹50-60 crore per acre over the next few years.
Land Value up 8X
In addition to outright land sales, Lodha is building dedicated teams to develop and lease powered shells (data center buildings with cooling and power infrastructure, excluding servers) to global clients. Lodha expects this model to generate significant long-term rental income, with the cost to build these power shells estimated at roughly ₹30 lakh/megawatt, inclusive of land.
Profitability Check: Revenue and PAT Surge in 9MFY26
From a financial perspective, revenue from operations rose by 25.2% year-on-year to ₹11,960 crore in 9MFY26. Pre-Sales grew 14% to ₹14,640 crore, accounting for 70% of FY26 pre-sales guidance. Adjusted EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) grew by 14.2% to ₹4,000 crore, while net profit surged by 31.4% to ₹2,420 crore.
#2 The Edge Advantage: How RailTel’s 102 Nodes are Capturing the $10B Data Race
RailTel Corporation is a Navratna public sector enterprise under the Ministry of Railways. It functions as a neutral telecom infrastructure and Information and Communication Technology provider in India. The company’s operations are broadly categorized into two main segments: Telecom Services and Project Work Services.
Within the telecom services, the company leverages its PAN-India network and multiple telecommunication licenses to offer end-to-end managed data services. It offers a wide portfolio of managed and cloud services, including Infrastructure as a Service, Platform as a Service, Software as a Service, and Co-location services.
RailTel operates Tier-III-certified data centers in Gurugram and Secunderabad. It established its first Tier-III data center and launched DC services on a Pan-India basis in FY14. The data centers are MeitY-empaneled, providing “RailCloud” for hybrid cloud solutions
These facilities host mission-critical applications for Public Sector Undertakings and government departments. They maintain highly reliable operations with a 99.9% uptime Service Level Agreement for cloud services and a 99.9% uptime SLA for co-location services. Like Lodha, Railtel also offers 15% energy saving using motion sensors.
Noida 10 MW Powerhouse: Scaling Digital Infrastructure for 2027
Furthermore, RailTel is making significant investments to expand its data center network in order to meet the growing demand for digital infrastructure. It is constructing a state-of-the-art 10 MW data center in Noida. The first phase of this project, with a capacity of 5 MW, is expected to be ready between March and May 2027.
The Edge Advantage: Deploying 102 Data Nodes with Techno Electric
The company has partnered with Techno Electric & Engineering Company to develop Edge Data Centers at 102 locations across India. Small-scale edge data center operations are already active in Gurgaon and Mumbai. Upcoming facilities in Chandigarh, Indore, and Vizag are expected to be operational by October 2026.
From RailCloud to Ethiopia: Evaluating RailTel’s 3-Year Revenue Visibility
RailTel has also signed MoUs with private entities like Anant Raj, L&T, and TCS to jointly offer Data Centre Colocation and Managed Services and drive business traction. In addition, the company is currently under active consideration for establishing a greenfield Data Centre for the Ministry of Foreign Affairs in Addis Ababa, Ethiopia.
RailTel’s 9MFY26 Scan: Strong Visibility vs Margin Pressures
From a financial perspective, revenue rose by 20.2% year-on-year to ₹2,608 crore in 9MFY26. Operating profit surged by 8.6% to ₹403 crore, while margins stood at 15.5%, down 160 basis points. Net Profit surged 9% to ₹204 crore. The order book stood at ₹10,166 crore, providing about three years of revenue visibility as per FY25 revenue.
The Valuation Check: P/E Ratios vs. Historical Medians
RailTel stands out with strong Return on Capital Employed and Return on Equity, whereas Lodha, operating in the real estate sector, reflects more moderate return ratios.
Valuation-wise, Lodha trades in line with the industry multiple and at a discount to the 5-year historical median. Railtel, on the other hand, is trading in line with historical multiples but premium to the industry.
| Peer Comparison (X) | |||||
| Company | P/E | 5Y Median P/E | Industry Median P/E | ROCE (%) | ROE (%) |
| Lodha | 25.7 | 46.9 | 27.3 | 15.6 | 14.7 |
| Railtel | 33.2 | 31.1 | 21.7 | 21.8 | 16.5 |
| source: screener.in (As of 15 April 2026) | |||||
India’s data centre market is projected to scale from $10 billion in 2025 to $22 billion by 2030, supported by a $60-70 billion investment pipeline and capacity expansion to 4-5 GW.
While the sector’s growth visibility is strong, the real differentiation lies in execution, where the ability to translate scale into consistent returns remains to be seen across players. Meanwhile, keep them in your watchlist.
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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