Some of India’s biggest data-centre operators are enjoying a rare combination: faster revenue growth and fatter margins. But the boom in their earnings for fiscal year 2026 (FY26) is being driven less by artificial intelligence (AI) than by existing capacity filling up.
Bharti Airtel-owned Nxtra Data, AdaniConneX, Sify Infinit Spaces and IPO-bound ESDS Software Solutions reported strong revenue growth in FY26, according to a Mint review of company filings. All four reported their fastest revenue growth and strongest operating margins in at least three years. AdaniConneX and Nxtra also recorded their sharpest operating-margin expansion in at least three years.
Together, the four account for more than a third of India’s data-centre market, according to Anarock Capital, the investment and financial advisory arm of real estate services firm Anarock Group.
Four others—CtrlS Datacentres, STT Global Data Centres India, NTT India and Yotta Data Services—also reported higher revenue growth in FY25, but have yet to disclose their FY26 earnings.
The performance comes amid a broader expansion in India’s data-centre industry, driven by rising cloud adoption, data localization and the growing computing demands of AI. Over the past year, domestic conglomerates, global technology companies including Google, Amazon, Microsoft and Meta, and standalone operators have committed more than $250 billion to new data centre capacity in India, according to a Mint analysis of investment announcements made.
“FY26’s high revenue and profitability come from capacity built in the last cycle reaching utilization, rather than from AI workloads,” said Sanchit Vir Goghia, chief executive of technology advisory firm Greyhound Research.
“AI is becoming an important source of incremental demand, but it is not yet the main driver of current revenues,” said Kashyap Kompella, analyst and founder of technology consultancy firm RPA2AI Research. “Most current earnings continue to come from cloud, enterprise, BFSI, telecom, digital content and other conventional workloads.”
Capacity starts paying off
Nxtra’s revenue jumped 17.1% year-on-year to ₹2,434 crore in FY26, its fastest growth in three years, helped by capacity expansion. In March, it raised $1 billion from Alpha Wave Global, Carlyle and Anchorage Capital to expand further.
Sify Infinit Spaces, a subsidiary of Sify Technologies and the first to build a commercial data centre in India, reported a 23.2% revenue increase to ₹1,760.5 crore, against 28.2% rise in FY25. The company attributed the growth to “continued demand from hyperscale clients, whose expanding digital infrastructure requirements are reshaping the sector.”
“With hyperscalers and small clients alike expanding rapidly, there is ample opportunity to capture customers, even though the market is competitive,” chief executive Sharad Agarwal had told Mint on 11 August.
AdaniConneX, the joint venture between Adani Enterprises and EQT-backed EdgeConneX, reported revenue of ₹1,084 crore, its fastest growth in two years. It aims to develop 2GW of renewable-powered data-centre capacity by 2030 to “meet the surging demand for Data Center infrastructure and solutions,” according to its FY26 annual report.
ESDS Software Solutions, which is eyeing a listing, reported a 30.7% jump in revenue to ₹472.2 crore. More than two-thirds of its incremental revenue came from a single client that contributed about ₹75 crore, according to its exchange filings.
Experts also attributed the growth to rising demand for data sovereignty.
“The jump in revenue is primarily on the back of rising demand from enterprises to meet their data sovereignty needs. Earlier, most hyperscalers like Microsoft and Google invested in data centres but since there has been a need to store India’s data within India, more companies are investing in data centres to store local data within the country,” said Amit Chandra, vice-president, HDFC Securities.
The four operators also expanded their operating margins. Nxtra, Sify, AdaniConneX and ESDS reported margins of 40.3%, 45.1%, 62.6% and 49.6%, respectively, up 250 basis points, 70 basis points, 2,570 basis points and 670 basis points.
The gains came as companies sold more capacity and power while costs remained largely flat. As of March, Nxtra, Sify and AdaniConneX had operational capacity of 250MW, 188MW and 55MW, respectively. ESDS does not disclose its capacity.
Most data centre operators currently run colocation facilities, where customers rent space, power and cooling. The model carries high margins because much of the cost base is fixed, according to a 2 June Nomura report.
A massive buildout
India currently has about 1.5GW of installed data centre capacity, according to government data. Nomura expects this to reach about 7GW by 2030, implying a roughly 30% compound annual growth rate from 2025 to 2030, supported by digitalization and rising cloud and AI adoption. The industry has an announced pipeline of more than 15GW, the report said.
The Indian data-centre market was valued at $5.55 billion in 2025 and is projected to reach $13.11 billion by 2034, implying a 10.01% CAGR between 2026 and 2034, according to market research firm IMARC.
The expected demand is prompting companies beyond traditional data-centre operators to enter the market. Two of India’s three largest technology services companies have announced their own investments.
In October last year, Tata Consultancy Services announced a $6.5 billion investment to develop 1GW of data-centre capacity over the next six years. HCL Technologies followed in July with an investment of about ₹3,500 crore ($365 million) to build and operate data centres with up to 50MW of capacity.
Yet the scale of investment may not translate into a proportionate economic payoff. Despite the massive investments, the industry may add just 0.13% to India’s GDP by 2030, when a sizeable share of planned capacity is expected to be operational, according to a Moody’s report published Tuesday.
The employment impact is expected to be smaller still. Moody’s projects that data centres will increase jobs in India by just 0.02% over the next four years.