AI Boom Powers Pipeline Giants

Global data center capacity is projected to double by 2030, fueled by significant investments in AI applications. This expansion necessitates massive energy infrastructure, including natural gas-fired power plants and associated pipeline networks. Welspun Corp, a leading US pipeline manufacturer with a 35% market share, is fully booked through FY28, supplying large-diameter pipes crucial for powering AI data centers. The company is expanding its US facilities to meet this demand.

In parallel, DEE Development Engineers is targeting the data center market, supplying specialized piping for cooling systems and gas turbine components. Their Thailand facility is producing critical Heat Recovery Steam Generator (HRSG) piping for major global turbine manufacturers. DDEL has secured 60% of its Thailand plant's capacity for this purpose, projecting significant revenue from these job-work contracts.

Both companies are experiencing strong order visibility due to the sustained demand for data center infrastructure. Welspun's US spiral mill is booked until FY28, with new plants set to boost capacity in FY27. DDEL's order book provides about two years of revenue visibility, with targeted growth in FY27.

While both companies have seen substantial stock price increases, future returns will depend on execution and capacity utilization. Key risks include potential capex slowdowns related to data centers and raw material price volatility for DDEL, alongside its high leverage.