4 Stocks to Watch as Google Bets Big on India's Data Centre Boom

#2 Cummins India

Next on our list is the stock of Cummins India.

AI infrastructure (like what Google is investing in) is data-center heavy. These facilities run 24/7, cannot tolerate even seconds of power outage, need solid backup systems. This is where Cummins India comes in. The company stands to grow should it receive orders from Google.

The company is a leading manufacturer of diesel and natural gas engines. Cummins India is one of the largest engine manufacturers in India with presence in automotive, industrial, rail, marine, defence and power generation sectors.

Moving ahead, the company is positive about its own opportunities within the data center sector. Contributions from data centers accounted for approximately 25% of power generation revenue in Q3 FY26. There remains a strong sense of optimism at the company on the growth potential from this segment.

In the final quarter of 2025, while some industrial segments saw a dip, the power generation segment grew by nearly 49%, almost entirely propelled by data center projects and hyperscale inquiries.

Data centers require massive, reliable power in a small footprint. Cummins has stayed ahead by localizing high-end technology. In fact, the group has 300+ unique data center customers, across 51 countries.

Other than data center segments, manufacturing and infra have been doing well for the company.

According to the management of the company, a lot of movement in residential and commercial realty in the last few quarters has led to good momentum and good inquiries.

Cummins India Financial Snapshot

On the financial front, for Q3 FY26, Cummins India posted sales of Rs 30,060 m, remaining steady on a year-on-year basis. Domestic sales stood at Rs 25,350 m, reflecting a slight dip of 2%, while exports rose by 2% to Rs 4,710 m.

The gross profit margin of the company for Q3 FY26 dropped to 16.6% vs 19.3% in the corresponding period of the previous year.

The three-year average ROE of the company was placed at 24.6% and the average ROCE was placed at 32.1%.

In recent quarters, the company has concentrated on improving margins through product mix optimisation and lowering raw material costs.

Cummins India has long-term prospects driven by strong domestic demand, infrastructure spending, and rising data centre investments. The company is guiding for double-digit growth in FY27, supported by power generation, railways, and industrial recovery.

Margins remain healthy with strong cash flows, while exports may stay volatile near term.

Overall, its leadership, technology, and policy tailwinds position it well, though valuations and global uncertainties are something that investors need to study and watch.

To know more check the Cummins India fact sheet and latest quarterly results.

#3 Sterlite Technologies

Sterlite Technologies is a leader in connectivity solutions, providing end-to-end solutions for building AI-ready infrastructure, FTTx, Rural, Enterprise and Data Center networks.

Data Center Interconnect is the high-speed optical backbone that links data center buildings to one another - enabling the seamless, low-latency flow of data across campuses, metros, and regions that modern cloud and AI workloads demand.

Sterlite Technologies brings the Data Center Interconnect expertise helping operators build interconnect infrastructure that scales efficiently, meets the strictest global standards, and keeps pace with the accelerating demands of AI-era data centers.

Another area of expertise of the company is Data Center Whitespace. This refers to the purpose-built space with a data center facility where critical IT infrastructure - relating to compute, storage, and networking - is deployed alongside the power and cooling systems that sustain it.

The company enables organisations to maximise whitespace utilisation, reduce operational complexity, and build data center environments that scale seamlessly as business demands evolve.

Sterlite Technologies Financial Snapshot

On the financial front, the company reported revenues of Rs 14.41 bn for Q4 FY26 and Rs 47.45 bn for FY26, a growth of 14.7% QoQ and 18.8% YoY.

In FY26, Sterlite Technologies delivered EBITDA margins at 13.2% and EBITDA of Rs 6,280 m. The three-year average ROE of the company was placed at 3.7% and the average ROCE was placed at 10.8%.

The year was characterised by a transformative 110% surge in order intake over FY25. This indicates strong revenue visibility and sets the stage for sustained growth in the coming quarters.

The open order book at the end of FY26 stands at Rs 73.09 bn, supported by large-scale data-centre and telecom projects across its key markets - North America, Europe and India.

In FY26, Sterlite Technologies established partnerships with global customers like Colt, Netomnia, Mynet, SLICFiber and Swoop. There was momentum across key markets in North America, UK, Europe, and Asia.

AI-driven data centre expansion is a major tailwind for Sterlite Technologies. Rising demand from hyperscalers is boosting need for optical fibre and connectivity. As global capacity doubles by 2030, the company can receive higher orders, positioning it as a key infrastructure provider in the AI ecosystem.

To know more check the Sterlite Technologies fact sheet and latest quarterly results.

#4 KRN Heat Exchanger and Refrigeration

KRN Heat Exchanger and Refrigeration is an Indian manufacturer specialising in heat exchangers used in HVAC (heating, ventilation, air conditioning), refrigeration, and industrial cooling systems. Its products include condenser coils, evaporator coils, and customized cooling solutions.

The data center boom and AI boosts demand for companies like KRN Heat Exchanger and Refrigeration because cooling is mission-critical.

Data centers generate massive heat from servers and require efficient HVAC and heat exchange systems to maintain uptime. The company supplies condenser and evaporator coils used in these cooling systems.

The shift toward energy-efficient and compact cooling solutions aligns with KRN Heat Exchanger's product strengths, positioning it for long-term structural growth in data center infrastructure.

By the close of Q3 FY26, approximately 15% of the company's revenue originated from AI data centers. According to a conference call held in February 2026, the management said that in the previous two months, KRN Heat Exchanger and Refrigeration has experienced a consistent flow of substantial orders, with a notable portion coming directly from these data centers. The management expects data centers to play a key role in driving the company's growth over the next three to four years.

KRN Heat Exchanger and Refrigeration Financial Snapshot

On the financial front, KRN Heat Exchanger and Refrigeration reported revenues of Rs 1,532 in Q3 FY26 m vs Rs 1,115 m YoY, showing a jump of 27%. The net profits too moved higher to Rs 227 m vs Rs 137 m YoY.

The gross profit margin of the company saw a significant improvement to 20.5% in Q3 FY26, against 14.2% in the corresponding period of the last year. This was led by improved operational efficiencies.

The three-year average ROE of the company was placed at 31.7% and the average ROCE was a solid 40.9%.

As of early 2026, the company's prospects are anchored by a 6 times capacity expansion plan and a strategic pivot into high-growth segments like data centers and electric vehicle (EV) cooling.

The management in a recent concall in February 2026, says they remain confident about the growth trajectory of the company. According to them, the industry outlook remains positive, the order pipeline is stable, and customer engagement across domestic and export markets continues to be encouraging.

The company's focus remains on disciplined execution, improving operational efficiency, expanding its product offerings in a calibrated manner, and building a sustainable business that can deliver consistent performance over the long term.

To know check the KRN Heat Exchanger and Refrigeration fact sheet and latest quarterly results.

Conclusion

Investing in AI and data-center-linked stocks needs a focus on real beneficiaries, not hype. Large tech investments flow through multiple layers, so only companies supplying critical components actually capture meaningful value.

The strongest opportunities lie in businesses providing essential infrastructure like backup power, cooling systems, fiber connectivity, and large-scale project execution.

Avoid companies that simply label themselves as "AI plays" without proven capabilities, contracts, or execution history. Many such stocks rise on sentiment rather than earnings visibility.

Valuation discipline is also crucial-several AI-themed stocks already price in aggressive future growth, leaving little margin for error.

A smarter strategy is to build a "picks and shovels" portfolio-companies that supply the backbone of data centers. These businesses grow regardless of which global tech player drives demand.

Also, prioritise firms with scalable operations, export exposure, and strong balance sheets, as they are better positioned to capitalise on sustained AI infrastructure growth.

Invest gradually rather than chasing momentum, since AI capex is a multi-year, cyclical trend with phases of hype and consolidation.

Bottom line: The opportunity is real, but success depends on focusing on fundamentals, avoiding overvaluation, and backing durable, ecosystem-level players rather than speculative names.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...