Whalesbook
The AI Infrastructure Boom
The global push for artificial intelligence infrastructure is driving massive investment, with an estimated $6 trillion expected to be invested in data center construction from 2025 to 2030. This boom requires not only new facilities but also advanced power and cooling systems, making Indian engineering firms vital global suppliers capable of capturing significant market share.
MTAR Technologies Boosts Power Solutions
MTAR Technologies is supplying crucial 'Hot Boxes' to Bloom Energy, which are used in fuel cell systems providing essential on-site power for AI data centers facing grid instability. Many large data center operators are expected to use off-grid power solutions by 2030. MTAR's stock has risen alongside Bloom Energy due to this demand. The company is increasing its fuel cell capacity by 2.5 times and plans capital spending of ₹250-300 crore over the next two years. A partnership with SLB for data center solutions could add ₹400-500 crore annually in long-term revenue. Despite strong FY26 results showing revenue up 30% to ₹876 crore and net profit up 76% to ₹94 crore, with an 80% FY27 revenue growth forecast, risks include rising debt, reliance on exports, and high fixed costs.
KRN Heat Exchanger Cools AI Growth
KRN Heat Exchanger is well-positioned to supply advanced cooling systems for AI data centers. As a provider of thermal and HVAC&R solutions, it manufactures key heat exchangers and cooling components. Its products have passed quality checks for major players like Vertiv. The data center segment now accounts for nearly 19% of KRN's revenue in Q4 FY26, and the company expects 80-90% of its future Fin & Tube business growth to come from this sector. KRN is targeting 30-50% of its revenue from exports within three years, focusing on the USA, UAE, and Europe, and has expanded manufacturing capacity sixfold. While FY26 revenue grew 39.5% to ₹600 crore and net profit rose 45% to ₹76 crore, concerns remain about increasing inventories and receivables. A ₹500 crore fundraising plan could lead to equity dilution, and global supply chain issues and rising freight costs pose challenges.
TD Power Systems Supplies Data Center Energy
TD Power Systems (TDPS) supplies generators for AI data centers, with 80% of its FY26 orders coming from a major U.S. original equipment manufacturer. The U.S. market alone needs an estimated 100 GW of power for AI data centers, a demand TDPS expects to continue for years. The company is developing larger generators up to 200 MW to meet the needs of large-scale facilities, with significant production increases planned for 2028. TDPS forecasts its capacity will support revenues of ₹3,000-3,200 crore by FY28, backed by a ₹1,973 crore order book as of March 31, 2026. FY26 revenue grew 45% to ₹1,856 crore, and management has raised FY27 revenue guidance to over ₹2,400 crore. However, high factory utilization creates execution pressure, supply chain disruptions can lead to penalties, and rising commodity prices, particularly copper, have reduced gross margins. The company is using retained earnings for working capital, affecting cash reserves.
Market Landscape and Challenges
The demand for AI data center infrastructure is a global trend with players like Schneider Electric and Eaton competing alongside Indian firms in power and cooling segments. Despite strong market tailwinds, these Indian companies face challenges such as fluctuating commodity prices, ensuring supply chain reliability, and managing the significant debt or capital expenditures needed for expansion. Their growth depends on efficiently scaling operations and navigating these risks.