India's power and electrical equipment stocks have become prominent proxy plays linked to artificial intelligence-related infrastructure, with companies such as Hitachi Energy, Kirloskar Oil Engines and GE Vernova T&D cited among names that have delivered returns of up to 100% this year.

The trade has developed around expectations that rising investment in data centres will support long-term demand for power generation, transmission and electrical equipment. Data centres, which provide computing capacity for cloud services and artificial intelligence workloads, require substantial and reliable electricity supply as well as related infrastructure such as transformers, transmission systems, backup power and cooling equipment. The theme mirrors a broader global pattern: estimates from organisations including the International Energy Agency have projected that AI and data centre electricity consumption could rise sharply over the coming years, making power infrastructure a central bottleneck for technology buildouts worldwide.

Power stocks become AI proxy trade

The shift has brought attention to listed Indian companies connected to the power and electrical equipment value chain. The source article identified Hitachi Energy, Kirloskar Oil Engines and GE Vernova T&D as examples of stocks that have produced strong gains, while also linking the theme to broader interest in electrical equipment stocks.

The focus on these companies reflects the role of power infrastructure in supporting data centre expansion. AI workloads can increase demand for high-density computing facilities, and those facilities depend on stable grid connectivity, equipment supply and backup systems. As a result, investors have treated certain power and electrical equipment companies as indirect beneficiaries of AI-related capital spending. India is among the markets attracting large-scale data centre commitments from domestic conglomerates and global cloud platforms, with Mumbai, Chennai and the National Capital Region emerging as key hubs—a factor underpinning demand for local power equipment suppliers and transmission infrastructure.

What investors are tracking

Market participants are watching data centre investments and the potential effect on demand for companies supplying power equipment, electrical systems and related infrastructure. The areas under scrutiny include power generation support, transmission and distribution equipment, transformers, engines and other systems used in industrial and infrastructure applications.

The article also referenced companies including Cummins India, Greaves Cotton, Swaraj Engines and Kirloskar Industries in the context of stock price interest, alongside Kirloskar Oil Engines. Other related names appearing in the source links included Voltamp Transformers, Siemens Energy India, Reliance Industries, Bosch Home Comfort India, NTPC, Power Grid Corporation of India, Adani Power, Tata Power, KEI Industries and Apar Industries.

Valuation risk remains

Analysts cited in the source said rising data centre investment could support long-term demand, but they also cautioned that valuations and stock selection will be important from this point. The article did not provide price targets or specific recommendations, and the theme remains tied to company fundamentals, execution and the scale of actual infrastructure spending.

The original Economic Times Markets article was published on July 24, 2026, and is available at https://economictimes.indiatimes.com/markets/stocks/news/ai-powerplay-proxy-power-stocks-give-up-to-100-returns-in-indias-hottest-trade-this-year/articleshow/132597615.cms.