5 Data Center Stocks to Watch for Long-Term Growth

#2 TD Power Systems

Second on the list is TD Power Systems (TDPS).

TDPS primarily manufactures steam turbine generators, hydro generators, diesel engine generators, and industrial motors. It's a manufacturing partner that supplies generators to gas engine and turbine OEMs.

Its product portfolio includes steam turbine generators (up to 250 MVA), gas turbine generators (up to 250 MVA), hydro generators (up to 45 MVA), and diesel/gas engine generators (up to 25 MVA).

Management notes that the power needs for the AI data center market in the US alone are projected to be around 100 GW. The timeline to install this capacity is expected to span 5 to 7 years.

This capacity could double if the rest of the world is factored in. This creates a multi-year cycle of high demand for power generation equipment.

TDPS consolidated revenue grew 71% YoY to Rs 6.4 bn in Q1FY27. EBITDA increased 72% to Rs 1.2 bn, while margins stood at 19%. Net profit increased 72% to Rs 860 m.

On the back of strong Q1FY27 performance, TDPS has upgraded its FY27 revenue guidance to Rs 26 bn, up from earlier guidance of Rs 24 bn. EBITDA margin is expected to be between 18% and 19%.

At the end of Q1FY27, TDPS's cumulative manufacturing segment order book stood at Rs 22.1 bn. Of this, generator and motor manufacturing contributed Rs 19.3 bn.

Exports and deemed exports made up 93% (Rs 6.8 bn) of the Q1FY27 order inflows (Rs 7.3 bn). The American market (North, Central, and South America) is expanding at a very strong rate. It's getting around Rs 7 bn of order inflows every quarter, leading to a capacity bottleneck.

The company's current active capacity can execute about Rs 22 bn of revenue. To expand capacity, TDPS is investing Rs 0.5 bn in debottlenecking. This low-capex, high-efficiency move is expected to scale its peak revenue potential to Rs 32 bn by FY28.

Beyond that, TDPS is planning capacity additions to target Rs 40+ bn for FY29 and FY30. It's also evaluating an expansion to push peak output capacity to Rs 40 bn and above by FY30. This will primarily involve expanding facilities for generators under the 100 MW design range.

Moreover, it has also signed a 10-year Build-to-Print manufacturing agreement with Siemens Energy to manufacture 2-pole generators.

Check out TDPS's financial factsheet and quarterly results to learn more.

#3 MTAR Technologies

Third on the list is MTAR Technologies.

MTAR designs and manufactures critical, high-precision, and differentiated engineered products. The company's presence spans aerospace, defence, data center, and clean energy, including nuclear power.

In the data center market, Bloom Energy is one of MTAR's largest and most significant customers, with a 10-15-year relationship. Bloom is a leader in solid oxide fuel cell and electrolyser technology.

MTAR is a key supply partner for Bloom Energy, supplying 50-60% of Bloom's hot box requirements. A hot box is the central, thermally insulated module that houses the SOFC stacks.

Additionally, the company has entered into a long-term contract with the multinational corporation SLB to supply components and assemblies for data center infrastructure solutions.

To initiate this partnership with SLB, MTAR has already received a first-article export order valued at Rs 450 m. At present, MTAR is actively executing the prototype and first-article work for these solutions.

SLB has an annual requirement of 8 sets based on the initial Rs 450 m order scale (Rs 3.6 bn/year).

In Q1FY27, MTAR revenue grew by 130.4% YoY to Rs 3.6 bn. Clean Energy (includes data Center business) remains the largest contributor (61%), driven by strong demand for solid oxide fuel cells.

The rest is contributed by products and others (28%), aerospace and defence (10%) and civil nuclear power (1%). The EBITDA margin expanded 550 bps to 23.6%, driven by operating leverage. As a result, net profit increased 364.5% to Rs 0.5 bn.

Management aims to raise revenue by 80% with around 24% margins in FY27.

Looking ahead, MTAR's order book stood at Rs 51.4 bn as of June 2026. This implies long-term revenue visibility, as per FY26 revenue of Rs 8.8 bn.

To meet the high demand for fuel cells, MTAR is investing Rs 5 bn to expand capacity. About 70% of the capital is dedicated strictly to the clean energy segment.

Phase 1 is already commissioned. Phase 2 is scheduled for completion by October 2026, and Phase 3 (a multifold capacity expansion) will be commissioned by March 2027.

Management is targeting an asset turnover of at least 6x the capital spent. At the targeted 6x asset turnover on Rs 3.5 bn of clean energy capex, the incremental peak revenue potential is around Rs 21 bn.

Check out MTAR's financial factsheet and quarterly results to learn more.

#4 Welspun Corporation

Fourth on the list is Welspun Corporation.

WCL manufactures critical physical infrastructure solutions, such as heavy-duty pipes, water storage tanks and speciality steel products. Its presence spans fifty countries, including India and the U.S.

Welspun is the largest player globally in the large-diameter line pipe segment. WCL manufactures LSAW (Longitudinal Submerged Arc Welded), Spiral, and ERW (Electric Resistance Welded) pipes.

These pipes are widely used across the oil and gas industry to transport oil and natural gas over long distances. However, these pipes are currently experiencing a massive surge in demand in the U.S.

Management highlighted that US order books for gas turbines jumped from 5-10 units two years ago to over 300 units. This highlights the scale of this pipeline buildout.

Welspun US spiral mills are fully booked through FY28. Data center power generation projects currently account for around 25% of the focus and order pipeline. Management expects this share to increase.

Welspun had a record global order book of roughly Rs 45 bn as of 25 September 2026. The company also reported strong Q1FY27 performance. Revenue grew 15% YoY to Rs 40.8 bn. EBITDA rose 35% to around Rs 7.6 bn, while margin expanded by 270 bps to 18.5%.

Net profit (excluding exceptional items) surged 42% to Rs 5 bn. Management has guided for Rs 200 bn (Rs 167.7 bn in FY26) in revenue for FY27 and Rs 28.5 bn EBITDA.

To fulfil and capture this demand, Welspun is actively expanding its manufacturing footprint.

Welspun is investing in two major new pipe facilities in America. An LSAW pipe plant is expected to be operational by the end of FY27. The ERW/HFIW pipe mill in Little Rock is fully commissioned.

The full operational and earnings contribution of both US facilities will be realised in FY28.

Under Vision 2030, Saudi Arabia plans to lay over 30,000 km of new water and sewage networks.

To meet this demand, it is setting up a greenfield ductile iron pipe plant there. Commissioning is expected by Q3/Q4 FY27, with financial contribution expected in FY28.

Check out Welspun's financial factsheet and quarterly results to know more.

#5 Aeroflex Industries

Fifth on the list is Aeroflex Industries.

Aeroflex manufactures metallic flexible flow solutions. These products are used to control the flow of all substances, including solids, liquids, and gases.

Liquid cooling is emerging as the preferred technology for improving efficiency and heat dissipation of data centers. Management estimates that liquid cooling systems account for 10-11% of the total cost of building a modern data center.

Skid assemblies are the core of its data center product offering. Other products include hose assemblies, connectors, and fittings designed for liquid-cooling applications.

Assemblies and Others (Value-Added Products) account for 44% of Q1FY27's revenue. Stainless-steel flexible hoses made up 33% of the revenue mix, followed by SFN skid assemblies (23). Exports accounted for 58% of revenue.

Aeroflex follows a B2B model through an exclusive arrangement with the Indian subsidiary of a leading US-based company. Thus, it currently gets the majority of its skid assembly revenue from India.

However, management intends to leverage this platform to expand into overseas markets over time.

To meet rising demand, Aeroflex is expanding its skid assembly capacity. Annual production capability reached 9,000 units in Q1FY27, with ongoing expansion to 15,000 skids by Q3FY27.

Management expects the new facility to operate at around 60-65% utilisation by March 2027. At peak optimal utilisation of 80%, this plant could generate revenue of Rs 3.7 bn.

On the other hand, SS Flexible Hose annual capacity is expanding to 20 m by Q3FY27, from 17.5 m.

At peak capacity utilisation and assuming a 70% share from value-added assemblies, the flexible hose and assemblies vertical can support a top-line revenue potential of Rs 6.5 bn. Aeroflex's combined annual revenue capability scales to over Rs 10.5 bn.

From a financial perspective, total income grew by 72.4% YoY to around Rs 1.5 bn in Q1FY27. EBITDA rose 116.4% to Rs 0.33 bn, resulting in an EBITDA margin of 23.0%. Net profit grew 162.2% to Rs 0.19 bn.

Check out Aeroflex's financial factsheet and quarterly results to know more.

Conclusion

The data center buildout is creating demand far beyond servers and cloud platforms.

STL is scaling its exposure to hyperscalers and AI infrastructure. TD Power Systems is expanding generator capacity. MTAR is building its clean-energy and data center business.

Welspun is benefiting from the power infrastructure pipeline, while Aeroflex is increasing liquid-cooling capacity. The opportunity is therefore spread across different layers of the ecosystem.

With global capacity expected to reach 200 GW by 2030 and India targeting 12 GW, the next phase will come down to how effectively these companies convert rising demand into orders, capacity utilisation and sustainable earnings growth.

Thus, instead of relying solely on hype, investors need to carefully analyse the company's fundamentals, including financial performance, corporate governance practices, and growth strategies.

Happy investing.

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