Bernstein has identified three Indian stocks that could benefit significantly from a sharp increase in capital expenditure on artificial intelligence (AI) data centres across India.
According to Bernstein, India’s data centre market is approaching a major turning point. Although the country currently ranks as the ninth-largest market globally by installed capacity, it is already among the top three user bases for many AI platforms. This gap between demand and infrastructure suggests strong long-term growth potential.
India’s large and rapidly expanding AI user base, combined with recent government tax incentives for data centre development, has attracted tens of billions of dollars in new investments. Many of these commitments were announced during the India AI Impact Summit held in New Delhi in February.
Bernstein estimates that around $57 billion in data centre investments have been announced across India, excluding projects linked to Reliance. Major global hyperscalers are committing substantial capital to expand local computing capacity. This surge in investment is expected to generate broad opportunities across construction, engineering, and power infrastructure sectors.
Larsen & Toubro (L&T)
Bernstein rates Larsen & Toubro as Outperform and considers it the most direct beneficiary of India’s data centre expansion. As a leading engineering, procurement, and construction (EPC) contractor, L&T plays a key role in building data centres and related power infrastructure. With hyperscalers accelerating capital deployment, the company is well positioned to secure a meaningful share of large-scale construction and engineering contracts.
Adani Green
While maintaining an Underperform rating on Adani Green, Bernstein acknowledged the company and its parent, the Adani Group, as potential indirect beneficiaries of rising electricity demand from data centres. The group’s extensive land holdings provide a structural advantage in securing solar-plus-pumped-storage or solar-plus-battery energy storage system (BESS) agreements. Bernstein expects these hybrid renewable solutions to become the preferred power model for Indian data centres. The firm also noted that Adani Green could participate in future nuclear energy partnerships, although any material impact is likely at least a decade away.
NTPC
NTPC is rated Outperform by Bernstein and is viewed as another indirect beneficiary of growing data centre power demand. Even if coal-based power purchase agreements are not directly signed with data centre operators, rising overall electricity consumption could delay coal plant retirements and increase utilization rates at existing thermal facilities. Nuclear power is also seen as a longer-term growth opportunity for NTPC, though Bernstein cautions that significant contributions from this segment remain more than ten years away.
