The Data Center industry is characterized by a massive demand for data localization, a shift toward AI-enabled infrastructure, and a move up the value chain from simple colocation to complex cloud services.
The industry is driven by a significant disparity in data generation versus storage. Anant Raj notes that while India generates approximately 28% of the world’s data, it currently houses only 1% of it. This gap presents a massive opportunity for domestic data center capacity expansion as data localization laws tighten.
The demand is moving beyond basic storage to high-density computing required for Artificial Intelligence. In addition, a significant portion of the domestic opportunity is driven by the government’s “India AI Mission,” which is currently in an active rollout phase.
The Government Push: India’s AI Mission
A second phase, which has yet to begin, will involve the government procuring GPUs for its on-premises infrastructure and data centers. Two companies that are benefitting from the data center boom and the rise of AI…
# The Hardware Backbone: Netweb’s GPU Strategy
Netweb operates as a high-end computing solutions provider, focusing on three strategic pillars: AI Systems, High-Performance Computing (HPC), and Private Cloud. Netweb designs and manufactures the complete AI server stack. The company distinguishes orders between “organic” business and large “strategic” orders.
Netweb doesn’t manufacture the GPU chips (which are sourced from partners like Nvidia) but designs the motherboard, compute, interconnect, storage, and the full software stack (middleware and AI cloud stack) to create the final integrated solution. NVIDIA is its key partner.
The AI Stack: Riding the NVIDIA Roadmap
The company has access to technology roadmaps roughly 18 months in advance. They are currently fulfilling orders based on NVIDIA Blackwell 200 and are already working on next-generation chipsets like B300 and GB300, as well as the latest solutions from Intel and AMD. It is open to other technologies (such as Google TPUs or Broadcom) if market demands it.
Fiscal Health: Margins vs. Strategic Growth
Netweb’s operating revenue rose by 92% year-on-year to ₹1,410 crore in 9MFY26. This growth was heavily influenced by the AI systems segment, which accounted for 48% of total revenue in 9MFY26. The company reported strong profitability growth alongside its revenue expansion, though margins were influenced by the mix of strategic versus organic orders.
The Financials: Margins Under Pressure?
Operating EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 88.7% to ₹188 crore in 9MFY26. EBITDA margin stood at 13.4%, while net profit increased 90% to ₹135 crore.
The ₹1,734 crore Order Book
The management maintains a guidance of 30% to 40% CAGR for the organic business over the next 2-3 years. The company is positioned to deliver consistent revenue and profitability for the current fiscal year. Netweb had a robust order book, with the organic order book standing at ₹526 crore and the strategic order book at ₹1,734 crore.
Netweb targets executing at least one-third of its large strategic orders within the current fiscal year. The execution of one such large order was brought forward to Q3, contributing significantly to the quarter’s revenue. There is an additional L1 (lowest bidder) pipeline of approximately ₹300 crore, which is expected to convert into the formal order book within the next 8 to 10 weeks.
Balancing Strategic Scale vs. Organic Margins
For large strategic orders, the company guides that margins will be about 200 bps lower at the Profit Before Tax level compared to the organic business. For the constant, organic business, the management expects margins to remain in the 13-14% range. Excluding the strategic order, the Profit After Tax (PAT) margin for the nine-month period was above 10%.
Netweb asserts it is a capability-based organization rather than a capacity-based one, and does not foresee manufacturing capacity constraints for annual revenues of ₹2,500-3,000 crores.
Netweb Growth Drivers
Management views the current surge in AI demand as the “tip of the iceberg,” with global demand expected to sustain for a long period. The company anticipates further opportunities from the government’s “AI Mission,” specifically the upcoming phase in which the government will procure GPUs for its own infrastructure, which has not yet begun.
The HPC and Private Cloud segments are witnessing strong, sustained demand, having grown by over 20% year to date. The data center market is described as “booming”. The company is working on plans regarding quantum computing, but will disclose them only after a complete government policy is in place
The industry is experiencing shortages and price increases in flash memory and storage due to global demand for AI. However, Netweb expects to manage these challenges without disruption through inventory planning and strong technology partnerships. For new orders, pricing will be aligned with prevailing market dynamics to account for component cost increases.
#2 The Pivot: Anant Raj’s Asset-Heavy Cloud
Traditionally a real estate company, Anant Raj is now aggressively diversifying into the Data Center and Cloud Infrastructure sector. It operates under the Ashok Cloud brand. The company positions its offerings as “AI-Enabled Infrastructure,” leveraging its existing real estate assets to provide scalable solutions ranging from Colocation to Cloud service.
Ashok Cloud is a sovereign cloud platform designed to offer end-to-end digital services. The company’s infrastructure is explicitly marketed as “AI Enabled,” designed to support the high-density computing requirements of AI workloads. This includes providing easily scalable resources in response to demand.
Anant Raj benefits from lower capital expenditure because it retrofits existing buildings that are already owned and debt-free. The additional spend to convert these structures into data centers is approximately ₹26 crore per MW, which is cost-competitive.
The company currently provides Infrastructure-as-a-Service. It is in the advanced stages of operationalizing Platform-as-a-Service and Software-as-a-Service in partnership with global technology players, including Orange Business. As of 9MFY26, Anant Raj has operationalized 28 MW of IT load capacity.
The Brownfield Advantage: Retrofitting Real Estate for AI
This facility has been expanded to 21 MW IT load capacity and holds Tier III and TIA-942 Rated-3 certifications, ensuring high reliability for mission-critical AI operations. A second facility in Panchkula with a 7 MW IT load capacity is now operational. Anant is also building a 200 MW plant, with an initial phase of 20 MW.
By offering cloud services, Anant aims to achieve higher revenue per megawatt than traditional colocation. Management estimates that while Colocation yields approximately ₹90 lakh per MW/month, Cloud services can generate up to ₹12 crore per MW/month.
Capacity Roadmap: Targeting 357 MW by 2032
The company has outlined a roadmap to reach a total capacity of 357 MW by 2032, a significant increase from previous targets. For this, Anant recently signed an MoU with the Government of Andhra Pradesh to develop a 50 MW Data Center and IT Park.
Upcoming Capacities
This project involves an investment of approximately ₹4,500 crore. It aims to reach 63 MW operational capacity by December 2026, 117 MW by FY28, and 357 MW by 2032. To ensure market reach, Anant has secured strategic alliances and certifications. The company has tie-ups with RailTel and private technology partners, such as Orange Business, for cloud services, and Schneider Electric.
Data Center Capacity Roadmap
The Data Center vertical is becoming a key revenue driver with high profitability margins. In 9M FY26, revenue from Data Center infrastructure and allied services stood at ₹101.99 crore. The segment delivers robust margins of 75%.
From a financial perspective, revenue rose by 23% year-on-year to ₹1,865 crore in 9MFY26. EBITDA increased by 39% to ₹527 crore, while margins expanded by 321 bps to 27.7%. Net profit increased by 33% to ₹408 crore. Management estimates a peak revenue of ₹1,200 crore once the 63 MW capacity becomes fully operational by FY28.
The Bottom Line
Netweb is a capital-light business, and so it boasts a strong Return on Capital Employed (RoCE) and Return on Equity (RoE). Valuation, however, is exponentially high, even though it has a short trading history. There are no comparable peers to Netweb, yet it continues to trade at a much higher multiple than its industry.
| Peer Comparison (X) | |||||
| Company | P/E | Median P/E | Industry P/E | RoCE (%) | RoE (%) |
| Anant Raj | 34.2 | 45.9 | 30.9 | 11.2 | 10.9 |
| Netweb | 98.8 | 134.9 (2.5Y) | 26.6 | 32.4 | 23.9 |
| Source: Screener.in | |||||
Anant Raj operates in a capital heavy business. So, its return ratios are sharply lower. Valuations, however, have moderated after recent corrections.
In summary, India’s data center story is evolving into a long-term opportunity for AI and cloud infrastructure.
Netweb plays this theme through high-end AI computing and capability-led growth, albeit at elevated valuations.
Anant Raj offers a more asset-backed, infrastructure-led route with improved returns as cloud monetisation scales.
The contrast highlights two distinct ways to participate in the same structural trend, with different risk and valuation trade-offs.
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 was not available have we used an alternate but widely used and accepted source of information.
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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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