Bernstein sees up to 50% upside in six power stocks as India’s data centre boom drives electricity demand. The Ministry of Power’s 2032 demand estimate doubled to 26 GW between March and July. While companies like Adani and Reliance lead, the report said, "How much finally materializes remains to be seen."
Every app you open, every video you stream, every AI chatbot you try runs on data centres. These are giant buildings full of computers. They eat enormous amounts of electricity. The key question now is - who is actually lining up for that power in India?
Also, India's data centre boom is creating a new question for investors - which companies could benefit from the massive electricity requirements of artificial intelligence (AI) and cloud computing?
According to the Bernstein report, India's data centre opportunity is becoming more visible through applications for electricity connectivity across central and state grids.
Why is Bernstein tracking data centre power demand?
A data centre is a facility that houses computer servers used to store information, run applications and support digital services. These facilities require a steady supply of electricity to operate servers and cooling systems. Securing grid connectivity is therefore a critical step before a project can become operational.
Bernstein's report pointed to a sharp increase in India's estimated electricity requirements. The Ministry of Power's estimate of data centre power demand for 2032 doubled from around 14 gigawatts (GW) to approximately 26 GW between March and July, according to the brokerage's account of a parliamentary filing.
The report also mapped applications for around 35 GW of connectivity across central and state grids, of which 12 GW had received approval.
The brokerage cautions that approvals do not guarantee completed projects. "How much finally materializes remains to be seen," the report said, highlighting the scale of investment required and uncertainty over funding.
However, Bernstein believes India could still meet the government's initial demand projections.
Bernstein's top power and infrastructure stocks
The brokerage's recommendations cover companies involved in engineering, electricity generation and transmission.
Stock targets: How much upside does Bernstein see?
Which companies are leading the connectivity race?
The central grid offers an early indication of which companies are preparing to build data centres. Bernstein identified around 4.4 GW of demand that could be directly linked to data centres based on applicant names. Another 6.5 GW could be inferred from the parent companies of applicants.
The Adani group stands out in this assessment. According to the brokerage report, it is the only applicant with around 1.5 GW of approved connectivity for data centre use, alongside another 6-8 GW of applications directly associated with such projects.
Reliance Industries also has around 14 GW of demand under process. However, Bernstein expects this to cover several uses, including captive power, green hydrogen and data centres. It cautions against treating the entire amount as data centre demand.
Maharashtra and Andhra Pradesh emerge as key markets
At the state level, Maharashtra remains an important data centre hub. The brokerage mapped around 8 GW of approved or pending connectivity, with Navi Mumbai accounting for a substantial share. Applicants include global technology companies and data centre operators, alongside real estate developers.
Andhra Pradesh is also attracting investment. Bernstein mapped around 4 GW of data centre grid approvals, excluding the Google-Adani project tracked through the central grid. These include projects linked to Reliance, ReNew, Sify, Greenko and other operators.
State incentives, including electricity tariff concessions and exemptions from certain charges, could support development. Tamil Nadu, traditionally another major data centre destination, could see fresh applications if its proposed policy encourages further investment.