Industry analysts expect electricity consumption from data centres to surge in coming years as AI workloads multiply. In many regions, local power grids are already strained. Nearly half the energy a data centre consumes never reaches the processors—it’s spent on air conditioning, liquid cooling, and ventilation systems.
For investors, the message is clear: the new bottleneck for AI is not computing power, but clean, reliable, and efficient electricity.
That’s where India’s emerging power and cooling specialists come in.
KRN Heat Exchanger and Refrigeration
KRN Heat Exchanger and Refrigeration isn’t a household name—but it’s quietly essential.
The company manufactures heat exchanger coils, the components that keep air conditioners and industrial cooling systems efficient. This steady HVAC and industrial cooling business gives KRN a firm base.
Over time, KRN has built global credibility through certifications, export clients, and a reputation for reliability. Now, it’s targeting the data centre supply chain, selling high-precision cooling components to major OEMs such as Daikin, Schneider Electric, and Voltas—who then supply full systems to data centres.
KRN’s parts may stay behind the scenes, but they’re indispensable. With a new Neemrana plant and approval under the Production Linked Incentive (PLI) scheme, it’s positioning to scale fast.
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Revenue has risen more than fivefold in four years, from ₹758 million in FY21 to ₹4.29 billion in FY25, a compound annual growth rate (CAGR) above 50%. Net profit has climbed from ₹25 million to ₹529 million, showing strong operating leverage.
Margins have eased a little, slipping from 25.1% in FY24 to 23.8% in FY25, as the company absorbs the cost of expansion.
The next few years will reveal whether KRN can hold its profitability while growing larger. For now, it remains a steady, precision-focused player quietly keeping the servers cool.
Thermax
Thermax has long been in the business of managing energy and green solutions—expertise that’s becoming indispensable to data centres.
As heat and energy use soar, its high-efficiency absorption chillers are coming into their own. These systems convert waste heat from engines or turbines into cooling, a process known as trigeneration.
That makes Thermax’s systems ideal for AI data centres, which operate around the clock and demand both cooling and efficiency. By recycling waste heat, Thermax helps clients cut energy costs and improve their Power Usage Effectiveness (PUE).
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Revenue has more than doubled in four years, to ₹103.9 billion in FY25. Profits climbed sharply until FY24 but eased slightly in FY25 as margins compressed from 6.9% to 6%.
The trend suggests that while sales growth remains strong, profitability is under pressure, likely from higher input costs or a shift toward turnkey projects with longer payback cycles.
Thermax’s long-term opportunity rests on regulation. If stricter efficiency or carbon norms become standard, its waste heat and sustainable cooling systems could move from nice-to-have to must-have.
The challenge is to prove that these complex, custom-engineered systems can deliver reliability and margin discipline in the nonstop world of AI data centres.
ABB India
ABB India is the quiet power behind India’s industrial and digital transformation. The global ABB Group has spent more than a century refining the science of electrification, automation, and power management.
In India, that expertise has found a new purpose: building the electrical backbone of the AI era.
ABB India isn’t in the business of owning or running data centres. Its job is to make sure they run without interruption.
The company provides the transformers, switchgear, power converters, and control systems that keep electricity steady and dependable. In many ways, its equipment acts like the nervous system of a data centre, keeping everything connected and working smoothly day and night.
Globally, ABB has partnered with Nvidia to develop the next generation of 800-volt direct-current (VDC) power architectures for AI data centers.
This collaboration gives ABB India access to advanced designs that improve energy efficiency and reduce heat generation, directly addressing one of the biggest constraints in AI infrastructure.
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Sales have more than doubled in four years, and profitability has surged even faster. Ebitda margins expanded from 11.3% in 2020 to 25.9% in 2024, reflecting strong pricing power and operating leverage. Net profit rose nearly eightfold to ₹18.7 billion.
ABB India’s growth will largely depend on how quickly new data centres come up in the country. Each one needs its power systems, and the company has already proven it can deliver at scale.
Tata Power
Tata Power, represents the other half of the equation. It is not in the business of cooling servers but of keeping them running.
Every data centre, no matter how advanced, depends on a reliable flow of electricity, and Tata Power stands at the core of that network. It is one of India’s largest integrated power companies, with operations spanning generation, transmission, distribution, and renewable energy.
As data centres multiply, the nature of demand is changing. Customers are no longer asking only for more power but for cleaner, uninterrupted power.
Tata Power is responding by expanding its renewable portfolio and investing in grid stability solutions such as pumped hydro storage and battery energy systems. This transition gives it a unique advantage with AI customers who need both sustainability and reliability at scale.
The company has also partnered with Keppel to introduce Cooling-as-a-Service (CaaS) solutions in India, targeting data centres and technology parks.
This model combines power supply and thermal management under one long-term service contract, simplifying operations for clients while creating new recurring revenue streams for Tata Power.
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Sales have doubled in four years, and net profit has more than tripled, reaching ₹47.7 billion in FY25. Margins fluctuated as the company reorganised its portfolio, but the direction of growth is clear.
The next test lies in execution. If Tata Power can expand renewable generation and scale its CaaS model successfully, it will not only power India’s AI ecosystem but also anchor it, generating stable, annuity-like returns.
Conclusion
Every technological revolution creates its quiet winners. The railways made fortunes for steel and coal suppliers. The internet enriched fiber and network providers.
Artificial intelligence is no different.
The spotlight may stay on chip designers and cloud giants, but the true enablers are the firms solving the real-world limits of power and cooling. Without them, AI’s promise simply overheats.
These companies — from KRN and Thermax to ABB and Tata Power — form the unseen backbone of India’s AI buildout. Their strengths are steady: engineering precision, consistent demand, and durable growth.
AI may be the brain of tomorrow’s economy, but these firms are its heart and lungs — working quietly, reliably, and with compounding strength.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
