4 Stocks Set to Gain as India Embraces SMR-Led Nuclear Energy for AI and Data Centre Growth

India's artificial intelligence (AI) boom is creating a challenge of powering the massive data centres that fuel our digital world.

As AI adoption increases, the country's data centre capacity must grow from 1.3 gigawatts (GW) today to over 5 GW by 2030, which requires US$ 30 bn in new infrastructure.

But many power sources can't deliver the 24/7 reliable electricity these facilities demand. Solar doesn't work at night, wind is unpredictable, and coal is too polluting for companies with environmental goals.

The solution?

Small Modular Reactors (SMRs).

These nuclear reactors offer 30-300 MWe capacity with relatively fast deployment and manageable capital requirements. Their modular design and enhanced safety features make them ideal for data centres and industrial applications.

The Indian government is actively promoting SMR-led nuclear energy for data centres, creating massive opportunities for companies in this space.

In this editorial, we will talk about four companies that could gain in this sector.

#1 Larsen & Toubro (L&T)

L&T's relevance to this theme is a classic "pick-and-shovel" play.

Its heavy civil Infrastructure business is a leading builder of data centres, while its long-standing expertise in nuclear engineering makes it a partner for any SMR-related project in India.

Operational & Project Insights

L&T is engaged in building state-of-the-art hyperscale data centres in key locations like Mumbai and Chennai.

In the nuclear sector, the company has a proven track record, having contributed to all 22 operational nuclear reactors in India.

It recently secured an order worth US$ 285 million (m) from the Nuclear Power Corporation of India Ltd (NPCIL) for the Kudankulam nuclear project, which includes the installation of reactor and turbine systems.

The company is well placed to benefit from the government's ambitious Nuclear Energy Mission, which targets a 100 GW capacity by 2047.

Financial Performance

L&T delivered impressive financial results in FY25, with group revenue growing 16% to Rs 2.55 trillion (tn) and PAT surging 15% to Rs 150.37 bn.

The momentum accelerated in Q1 FY26, with order inflows jumping 33% to Rs 945 bn and PAT climbing 30% to Rs 36 bn.

Despite margin pressures due to execution costs, the company's return on equity improved to 17%, reflecting strong operational efficiency.

#2 NTPC (National Thermal Power Corporation) Ltd

NTPC's entry into nuclear energy positions it to lead the country's clean energy transition through innovative reactor technologies.

With a target of 30 GW nuclear capacity by 2047, NTPC will benefit from India's nuclear expansion, as a critical beneficiary of the country's nuclear-powered infrastructure revolution.

Operational & Project Insights

NTPC has emerged as India's first major power producer to actively pursue Small Modular Reactors (SMRs) for replacing ageing thermal plants.

The company issued India's first-ever tender for SMR feasibility studies, marking a historic shift since the country opened its nuclear sector.

This groundbreaking move involves identifying coal plants within NTPC's massive 63 GW coal portfolio that can be retired within five years and strategically replaced with SMRs.

NTPC is executing an ambitious two-pronged nuclear expansion:

1. Large-Scale Nuclear Projects: Through its ASHVINI joint venture with NPCIL, NTPC is developing the Rs 504 bn Mahi Banswara Rajasthan project featuring four 700 MW reactors (2,800 MW total). The project has secured regulatory clearances. Operations are planned for 2032. NTPC also plans to build large nuclear reactors with 15 GW combined capacity.
2. SMR Leadership: The company's wholly-owned subsidiary, NPUNL, established in January 2025, is spearheading India's SMR revolution. NTPC has engaged with international firms from Russia and the US for SMR technology partnerships and identified 28 potential sites across multiple states. This positions NTPC as the first Indian company to formally pursue SMR deployment through competitive tendering.

Fundamental Strength & Financial Performance

NTPC delivered high FY25 results with total income rising 5% to Rs 1.91 tn and profit surging 12.3% to Rs 239.53 bn, driven by record power generation of 438.68 bn units.

Group capex jumped 37% to Rs 485.95 bn, reflecting aggressive expansion plans. Q1 FY26 momentum continued with PAT growing 11% to Rs 61.08 bn.

The company's two nuclear entities - ASHVINI and NPUNL- are positioned for growth within its Rs 7 tn capex roadmap through 2032.

#3 Bharat Heavy Electricals Ltd (BHEL)

BHEL's has five decades of indigenous nuclear expertise. Here are the details...

Operational & Project Insights

BHEL is India's sole indigenous supplier for nuclear steam turbines and generators, controlling 56% of the country's total installed nuclear capacity.

The company has supplied 45 nuclear steam generators more than any manufacturer in India, with equipment demonstrating exceptional reliability through an 82.7% operational availability rate in FY25.

BHEL is uniquely positioned to capitalise on India's ambitious SMR roadmap, particularly the government's target to operationalise 5 indigenously developed SMRs by 2033.

As the only Indian company with proven nuclear steam turbine and generator capabilities, BHEL is a partner in India's SMR deployment, whether for traditional grid applications or emerging captive uses like data centres.

The company's track record spans all three stages of India's nuclear power program, covering equipment for 220 MWe, 540 MWe, and 700 MWe plants.

Anticipated amendments to the Atomic Energy Act could enable private sector participation and foreign investment. BHEL is actively working with stakeholders to expand its nuclear offerings.

BHEL's experience in India's nuclear program, along with a recognition of nuclear power for captive applications like data centres, positions the company as an indispensable beneficiary of this growth.

Financial Performance

BHEL delivered good FY25 results with revenue rising 19% to Rs 283.39 bn and PAT surging 89% to Rs 5.34 bn, driven by record order inflows of Rs 925.35 bn.

However, Q1 FY26 showed seasonal weakness with revenue declining 39% QoQ to Rs 54.87 bn and the company posting a Rs 4.56 bn loss versus Rs 5.04 bn profit in the previous quarter.

Despite the quarterly volatility, the company's strong order book of Rs 1.96 tn provides revenue visibility for its nuclear expansion plans.

#4 Netweb Technologies India

Netweb is an essential hardware provider for energy-intensive computing demands that nuclear power must address.

Operational & Project Insights

While Netweb isn't directly involved in SMR technology, the company is strategically positioned at the intersection of AI infrastructure and energy efficiency - the exact challenge that nuclear-powered data centres aim to solve.

Netweb is actively developing AI-native, energy-efficient platforms across its three core pillars - High-Performance Computing (HPC), Private Cloud, and AI Systems.

It's innovative Skylus.ai platform serves as a composable GPU orchestration system designed for rapid AI infrastructure deployment and optimisation.

The company's addresses the energy challenge through multiple initiatives: implementing high-efficiency power supplies (80 Plus Gold or higher), exploring liquid cooling methodologies to reduce air conditioning demands, and deploying automatic scripts to shut down idle systems.

India projects data centre capacity to reach 17 GW by 2030. Netweb's specialised hardware for GPU-intensive workloads, machine learning, and deep learning applications, position it as a beneficiary of the infrastructure buildout that will require reliable, clean nuclear power to operate sustainably.

Financial Performance

Netweb delivered good FY25 results with revenue surging 59% to Rs 11,490 m and PAT climbing 51% to Rs 1,145 m, driven by strong demand across HPC, Private Cloud, and AI segments.

Q1 FY26 momentum accelerated with revenue doubling to Rs 3,012 bn and PAT growing 100% YoY, boosted by AI segment contribution reaching 29% of revenue.

However, QoQ performance declined from Q4 FY25 due to typical seasonality, as government and corporate CAPEX cycles create Q4 billing concentration, making it the strongest quarter annually.

Conclusion

India's nuclear-powered data centre revolution represents a significant structural shift across multiple industries, creating opportunities throughout the infrastructure value chain.

L&T, NTPC, BHEL, and Netweb each occupy distinct positions within this ecosystem - from nuclear engineering capabilities to AI hardware solutions.

The sector's development depends on regulatory frameworks for SMR deployment, execution of large-scale infrastructure projects, and the pace of digital transformation driving data centre demand in the coming decade.

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...

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