3 Stocks in the Data Centre Ecosystem

AI models are getting bigger, data consumption is exploding, and cloud adoption is now mission-critical. But here's the catch: none of this can exist without data centres, the physical backbone of the digital world.

And India is quietly becoming one of the fastest-growing data centre markets on the planet.

Over US$ 22 billion (bn) in capex is expected over the next few years, and that means a massive opportunity for the manufacturers building the infrastructure behind it all: power systems, cooling units, transformers, and precision-engineered structures.

While global investors chase flashy AI and chip stocks, these 3 Indian companies are supplying the bricks and steel of the digital revolution... quietly compounding revenue as the world's demand for compute surges.

Take a look...

#1 Netweb Technologies India

First on the list is Netweb Technologies India, an indigenous Indian-origin, owned, and controlled Original Equipment Manufacturer (OEM) known for its offerings designed to address the complex and evolving demands driven by advancements in artificial intelligence (AI) and cloud computing.

While the company offers standard data centre servers under the Tyrone Camarero brand, including over 200 dual-processor models, management's objective is strategically focused on developing and growing its Private Cloud and Hyperconverged Infrastructure (HCI) business, rather than just the traditional "box business" of selling pure hardware.

This Private Cloud/HCI segment, sold under the Tyrone Skylus brand, is revolutionising modern data centres by providing a unified on-premise platform that replaces traditional virtualisation technologies.

Coming to the company's financial performance, the Netweb has delivered a top-line growth of 67% compounded annual growth rate (CAGR) over a 3-year period and a net profit CAGR of 72%.

The last 3-year return on equity (ROE) has been 29%.

Here's how the stock price has performed in the past 1 year.

In terms of growth and revenue, Netweb consistently guides for an overall revenue CAGR of 30% to 40% over the medium term, expecting to maintain this trajectory for the next few years.

The company's business model is characterised by heavy seasonality, typically seeing roughly one-third of total annual revenue in the first half and two-thirds in the second half.

Regarding the order book and pipeline, the visibility remains strong, providing a solid foundation for future growth.

Management's guidance for operating margins is expected to stabilise in the range of 13% to 14% in the near term.

The company has solidified a crucial manufacturing partnership with NVIDIA, making Netweb a select OEM for the NVIDIA Grace CPU Superchip and GH200 Grace Hopper Superchip MGX server designs.

This collaboration, which involves producing over ten server variations under the Tyrone AI systems range, is expected to start translating into major revenue benefits starting in FY26.

Netweb is also executing on its strategy to expand its geographical footprint by initiating exports and planning the establishment of service networks in select countries within Europe and the Middle East.

For more details, check out Netweb Technologies India's financial factsheet.

#2 E2E Networks

Coming second on the list is E2E Networks, which fits into the Data centre ecosystem as India's leading hyperscaler and premier Infrastructure-as-a-Service (IaaS) provider specialising in advanced Cloud GPU infrastructure.

The company focuses on providing accelerated cloud computing solutions utilising cutting-edge Cloud GPUs like NVIDIA A100, H100, and H200, positioning itself as a catalyst in India's digital and AI journey.

E2E Networks offers a true public cloud platform that is multi-region (with 10 MW of data centre IT power capacity across majorly Delhi NCR and Chennai).

The company provides a full-stack offering, including the TIR - GenAI Platform, Storage and Cloud Solutions, and the Sovereign Cloud Platform, positioning itself to serve workloads for enterprises, businesses, higher education and research institutions, and AI/ML startups.

A key element of its market strategy involves expanding capacity by setting up GPU clusters within external data centre facilities, evidenced by its strategic deployment at L&T's state-of-the-art data centre facility in Chennai.

The Sovereign Cloud Platform, delivered as on-premise software, specifically targets cloud repatriation trends and allows customers to run cloud infrastructure and AI workloads on their own physical or co-located infrastructure in an air-gapped, compliant, and vendor-independent manner.

Coming to its financial performance, the company has delivered a top-line growth of 47% CAGR over a 3-year period and a net profit CAGR of 95%.

The last 3-year ROE has been 8%.

Here's how the stock price has performed in the past 1 year.

Looking ahead, the management has set aggressive targets for the future, leveraging substantial strategic investments and market expansion.

E2E Networks, which saw its FY25 revenue grow 74% year-on-year to Rs 1,640 million (m), is targeting an exit monthly recurring revenue (MRR) of approximately Rs 350 m to Rs 400 m by the end of March 2026, targeting a three times growth in MRR.

This growth will be supported by the current ARR capacity nearing Rs 5,000 m.

Management intends to get back to a steady-state 60% margin, and potentially improve further, targeting 65% to 75% operating margins for the projected exit MRR, anticipating efficient cost management without significant changes to the existing cost structure.

E2E Networks is empanelled for the India AI Mission, which represents a significant market opportunity with an estimated overall spend of Rs 10.5 bn over three years, where E2E is targeting at least 10% market share, alongside the launch of AI Lab as a Service (AILaaS) for educational institutions.

For more details, check out E2E Networks' financial factsheet.

#3 KRN Heat Exchanger and Refrigeration

On number three comes KRN Heat Exchanger and Refrigeration (KRN), which is strategically aligned with the data centre manufacturing ecosystem through its specialisation in precision-engineered heat exchange applications.

Data centres are a major growth pillar for the company, as efficient thermal management enabled by heat exchangers is critical, given that cooling systems can account for approximately 40% of their energy consumption.

KRN's advanced coil designs support the vast cooling demands of data centres, ensuring efficient heat dissipation and safeguarding mission-critical operations.

KRN supplies its fin and tube type heat exchangers for air-cooled chillers used in data centre cooling and also supplies indoor coils for complete machines.

Coming to its financial performance, the company has delivered a top-line growth of 40% CAGR over a 3-year period and a net profit CAGR of 69%.

The last 3-year ROE has been 27%.

Here's how the stock price has performed in the past 1 year.

Looking ahead, as an expert in commercially sized heat exchangers, KRN anticipates achieving a market share of more than 60% or 70% in the cooling segment.

KRN currently supplies three large OEMs in the data centre business, notably Schneider Electric, where the company supplies 92% to 95% of their total business volume in this area.

For the future, management is guiding towards substantial growth fuelled by strategic expansion, with plans to increase overall production capacity by 6x through its wholly-owned subsidiary, KRN HVAC Products.

The new facility at Neemrana commenced commercial operations on 31 May, 2025, and ramp-up to full capacity utilisation of this 6x capacity is targeted to be achieved within the next three financial years, starting from FY26.

The mass production ramp-up is expected to begin in the third quarter of FY26.

In terms of revenue, once the new facility reaches full capacity, management expects to generate peak revenue of 5x to 6x of the current FY25 revenue.

For the near-term Q2 FY26, revenues are anticipated to be largely in line with Q1 FY26.

Regarding profits and margin trajectory, management is confident that margins, despite current pressures from training costs for 150 new employees, will stabilise and increase by 1% to 2% on existing margins in the coming years.

This increase will be supported by several key factors: firstly, an increasing contribution from exports, which currently account for about 16% of consolidated revenue, and offer margins that are generally 3% to 4% higher than domestic sales.

KRN is aiming to boost the export share to 30%-35% by FY26 and further target 50% in the next three years.

Secondly, government incentives will provide a significant boost, notably the PLI scheme approval received for the subsidiary, which offers an estimated 4% to 6% incentive on the top line of new production over the next three years.

For more information, check out KRN Heat Exchanger and Refrigeration's financial factsheet.

Conclusion

India's digital backbone is being built right now, and companies like Netweb Technologies, E2E Networks, and KRN Heat Exchanger & Refrigeration are at the heart of it.

As AI, cloud computing, and data consumption accelerate, these players are manufacturing the infrastructure that makes those trends possible.

Each of these businesses combines strong growth, expanding margins, and forward-looking management with a front-row seat to India's data centre boom.

For investors with patience and conviction, this ecosystem could quietly become one of the most rewarding megatrends of the decade.

However, it's important to conduct thorough research on financials and corporate governance before making investment decisions, ensuring they align with your financial goals and risk tolerance.

Happy investing!

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