A steady stream of traditional engineering companies is building and maintain data centres, a business projected to grow 8.5 per cent annually.
“Data centres are extremely high on engineering,” said Prasanna Sarambale, chief executive officer for data centre business and group head for business development at Sterling and Wilson. Sarambale expects the business, by the end of this financial year, will clock a turnover of Rs 400 crore annually.
Larsen & Toubro (L&T) and KEC International are two other companies looking at this business. L&T is already executing multiple projects, and KEC International hopes to bag its maiden project soon.
“We are the lowest bidder in a data centre project,” said Vimal Kejriwal, managing director and chief executive officer for KEC International. His company believes data centres are right up its street, as it specialises in civil engineering, cables and smart cities segment.
“It also brings business to our transmission and distribution (T&D) business, as data centres are power intensive,” said Kejriwal.
“The opportunity in building these centres may be around Rs 4000 crore per annum, while it may be Rs1000 crore for the related infrastructure like DG sets. It is a good opportunity for contractual work for building them. The capital goods opportunity, in terms of hardware requirements, is limited for Indian companies, as most of the parts are imported,” said an analyst with a domestic brokerage firm who did not wish to be identified.
Industry data suggests engineering opportunities worth $2.7 billion in data centres and the number is expected to become $ 4 billion by 2024. “We are seeing more competition entering this segment…this is an industry that is flourishing,” said Sarambale.
Capital goods companies an annual turnover of Rs 200 crore from data centres.
Typical of engineering companies, data centres are being targeted for two kinds of opportunities: construction and maintenance. “We have built data centres and handed them over. There are some which are with us on a build operate and maintain basis,” said a person from a major engineering company who did not wish to be identified.
Some others, like ABB India, have spotted potential in servicing these data centres. “Many more global co-location companies are investing and expanding their Indian Business. It is one of the emerging drivers of growth for ABB in India and in the past three years we have witnessed significant traction in the data centers segment,” said CP Vyas, President, Electrification business, ABB India. ABB offers a range of products and solutions to contribute to power availability, reliability and low carbon emissions for data centers.
The ABB executive expects Internet of Things (IOT), artificial intelligence and cloud computing complimented by e-governance, 5G rollout initiatives by the Indian government will create more opportunities. The government’s smart cities initiative is already contributing to the data centres related order-book for various engineering companies. State-sponsored welfare schemes are also expected to contribute to higher demand for centralized data centres.
For companies like Sterling& Wilson alone, order book for data centres stands at Rs 800 crore to Rs 900 crore. The company is also tapping international markets, which contributed 15 to 20 per cent to the segment turnover.
“Data centres are extremely high on engineering,” said Prasanna Sarambale, chief executive officer for data centre business and group head for business development at Sterling and Wilson. Sarambale expects the business, by the end of this financial year, will clock a turnover of Rs 400 crore annually.
Larsen & Toubro (L&T) and KEC International are two other companies looking at this business. L&T is already executing multiple projects, and KEC International hopes to bag its maiden project soon.
“We are the lowest bidder in a data centre project,” said Vimal Kejriwal, managing director and chief executive officer for KEC International. His company believes data centres are right up its street, as it specialises in civil engineering, cables and smart cities segment.
“It also brings business to our transmission and distribution (T&D) business, as data centres are power intensive,” said Kejriwal.
“The opportunity in building these centres may be around Rs 4000 crore per annum, while it may be Rs1000 crore for the related infrastructure like DG sets. It is a good opportunity for contractual work for building them. The capital goods opportunity, in terms of hardware requirements, is limited for Indian companies, as most of the parts are imported,” said an analyst with a domestic brokerage firm who did not wish to be identified.
Industry data suggests engineering opportunities worth $2.7 billion in data centres and the number is expected to become $ 4 billion by 2024. “We are seeing more competition entering this segment…this is an industry that is flourishing,” said Sarambale.
Capital goods companies an annual turnover of Rs 200 crore from data centres.
Typical of engineering companies, data centres are being targeted for two kinds of opportunities: construction and maintenance. “We have built data centres and handed them over. There are some which are with us on a build operate and maintain basis,” said a person from a major engineering company who did not wish to be identified.
Some others, like ABB India, have spotted potential in servicing these data centres. “Many more global co-location companies are investing and expanding their Indian Business. It is one of the emerging drivers of growth for ABB in India and in the past three years we have witnessed significant traction in the data centers segment,” said CP Vyas, President, Electrification business, ABB India. ABB offers a range of products and solutions to contribute to power availability, reliability and low carbon emissions for data centers.
The ABB executive expects Internet of Things (IOT), artificial intelligence and cloud computing complimented by e-governance, 5G rollout initiatives by the Indian government will create more opportunities. The government’s smart cities initiative is already contributing to the data centres related order-book for various engineering companies. State-sponsored welfare schemes are also expected to contribute to higher demand for centralized data centres.
For companies like Sterling& Wilson alone, order book for data centres stands at Rs 800 crore to Rs 900 crore. The company is also tapping international markets, which contributed 15 to 20 per cent to the segment turnover.
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