Powerica: Data-Centre Growth, Margin Test

Powerica is gaining from India’s expanding data-centre industry, which needs reliable backup power. Data-centre demand is expected to grow at around 20.5% annually between FY25 and FY30, supported by cloud services, digital platforms and artificial-intelligence workloads. The generator business contributed 81.4%, or ₹635.2 crore, of revenue in Q1FY27. The company has manufactured gensets with Cummins India for over 40 years, offering products from 7.5 kVA to 3,750 kVA. Cummins-powered gensets accounted for 72% of generator-division revenue. Data centres contributed 20% of generator revenue in Q1FY27. Powerica’s DG-set order book stood at ₹1,700 crore in July 2026, including ₹900 crore from data centres. By 7 August, the data-centre order book rose to ₹1,100 crore, including a ₹200-crore hyperscaler or colocation order. Most orders are completed within 24 hours to 12 months, while data-centre projects generally require 12–18 months. Plant utilisation was 75–80% on a single shift, leaving scope to increase output. However, the generator division’s EBITDA margin declined 150 basis points to 5.6% in Q1FY27 because of higher raw-material costs, supply-chain pressure and delayed price revisions. Planned price increases could support recovery in Q2 and Q3. The Wind Power division contributes 18.6% of revenue but has a strong 48.6% margin and generates 67% of core EBITDA. For shareholders, strong orders and profit growth offer attractive data-centre exposure. However, investors must watch execution, working capital, competition and margin recovery. At 22.4 times earnings, Powerica traded below the industry multiple of 32.5 times as of 2 September 2026, although its recent listing limits historical comparison. The opportunity is promising, but shareholder value will depend on converting orders into profitable cash flows.