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Q1: 2026-05-04 Earnings Summary

EPS of $0.27 beats by $0.27

 | Revenue of $1.15B (11.36% Y/Y) beats by $65.17M

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The International Energy Agency’s latest report reveals a technology that is simultaneously getting greener and consuming more power than ever before. The world is not ready.

Key Takeaways

• The Energy Paradox: Despite unprecedented annual improvements in energy efficiency per AI task, the aggregate electricity consumption of data centers—especially those focused on AI—is surging. The International Energy Agency (IEA) projects that global electricity consumption from data centers will roughly double by 2030, with AI-focused data center consumption tripling in that period.
• Infrastructure Bottlenecks: The rapid growth of AI is creating a bottleneck crisis where the physical world cannot keep up with digital ambition. Grid constraints could delay approximately 20% of global data center capacity planned for construction by 2030, and shortages of high-bandwidth memory are anticipated to persist through at least 2027.
• AI as the Solution and Policy Imperative: AI is not just an energy taker but is becoming an “energy maker,” capable of helping energy-intensive industries reduce their energy costs by 3 to 10 percentage points and accelerating scientific discovery for materials and battery chemistries. Policy intervention is crucial, requiring approaches that promote electricity system flexibility and remove barriers to AI adoption in the energy sector.

There is a phrase that has quietly become the IEA’s defining axiom for our era: there is no AI without energy. It sounds simple enough. But the International Energy Agency’s newly published report, Key Questions on Energy and AI, shows just how staggeringly complex and urgent that relationship has become.

The numbers alone are arresting. Global electricity demand from data centres, the critical infrastructure for training and running AI models, grew by 17% in 2025. Electricity consumption from AI-focused data centres grew even faster, surging 50% in that year alone. This is not an incremental change. This is a structural reshaping of how the world consumes power, happening at a pace that grids, regulators, and supply chains were never designed to absorb. IEA

And yet the report’s most counterintuitive finding is not the surge; it is the efficiency miracle happening in parallel. Measured per individual task, the energy efficiency of AI is improving at a rate unprecedented in energy history. Software and hardware advances have resulted in the energy use per AI task dropping by at least an order of magnitude annually in recent years. Simple text queries now typically consume less electricity than running a television over the same period of time. IEA

So AI is simultaneously becoming greener per task and consuming vastly more electricity in aggregate. This is the central paradox policymakers must confront.

At Least a Twofold Increase by 2030

The trajectory the IEA projects should concentrate minds in every energy ministry on the planet. Updated projections see electricity consumption from data centres roughly doubling from 485 TWh in 2025 to 950 TWh in 2030, accounting for around 3% of global electricity demand by that date. Electricity consumption from AI-focused data centres grows much faster than overall data centre electricity consumption, tripling in this period. IEA

To put that in context: a typical AI-focused data centre consumes as much electricity as 100,000 households, and the largest ones under construction today will consume 20 times as much. IEA

Driving this is not just usage growth but investment at an almost incomprehensible scale. The capital expenditure of just five technology companies exceeded USD 400 billion in 2025 and is expected to jump by another 75% in 2026. Capital expenditure of just those five companies is now larger than global investment in oil and natural gas production. Let that sink in: five Silicon Valley firms are now outspending the entire global fossil fuel extraction industry on infrastructure. IEA

This unprecedented surge is colliding with aging and under-invested electric grids. In regions like the United States and Europe, permitting new power plants and transmission lines can take over a decade, far too slow to meet the AI industry’s timeline. This has led to a “gigawatt squeeze,” where projects are delayed, and compute clusters sit idle, waiting for a connection to a grid that cannot deliver. Developers are increasingly exploring “off-grid” solutions, bringing their own power sources like natural gas, microgrids, and even nuclear reactors to site. The challenge is not just absolute capacity; it is the grid’s inability to deliver a “certain type” of flexible power that a one-size-fits-all system cannot easily accommodate.

The Bottleneck Crisis Nobody Is Talking About

Behind the headline investment figures lies a quieter, more troubling story, one of physical limits asserting themselves against digital ambition. The speed of the AI revolution is increasingly contrasting with the speed of the physical, social, and economic systems that underpin it. Bottlenecks across energy supply chains and advanced chip manufacturing have tightened. Planning and regulatory systems are being stretched by the wave of project applications for data centres, amid a broader trend of rapid load growth and electrification. IEA

This is not a hypothetical risk. The IEA’s analysis is stark: grid constraints could delay around 20% of global data centre capacity planned for construction by 2030. One in five planned facilities may simply not connect to the grid on schedule. That is a direct constraint on the AI ambitions of nations and corporations alike.

The chip supply chain is equally fragile. A shortage of high-bandwidth memory, integral to AI chip production, has developed over the past six months and is anticipated to persist through at least the end of 2027.

Supply Chain Fragility and Geopolitical Risks The chip shortage is exacerbated by a fragile and highly concentrated supply chain. ^{Global memory production is dominated by a handful of companies, primarily in Asia, creating a single point of failure. Geopolitical tensions, such as conflict in the Middle East and the potential closure of critical trade routes like the Strait of Hormuz, pose a major risk. A disruption could spike energy costs and sever access to essential raw materials like helium and specialized acids, directly impacting chip factories and prolonging the “chip tightness” potentially until the end of the decade. This has triggered a rush by nations and corporations to secure their own supplies, a form of hardware hoarding that mirrors the wider power grab.}

Meanwhile, the geographic concentration of these projects is compounding local strain. 50% of data centres under development in the United States are in pre-existing large clusters, potentially raising risks of local bottlenecks. IEA

The Critical Minerals Time Bomb

The energy story of AI is inseparable from a geopolitical one. Apart from bulk materials like steel and concrete, the construction of data centres requires sizeable amounts of several minerals and metals, such as copper, aluminium, silicon, gallium, and rare earth elements. There is a significant overlap between the minerals needed for building new data centres and those that are critical to energy technologies. IEA

The supply concentration figures should alarm any strategist. In 2030, data centre demand for gallium could equal up to 10% of today’s supply, and China accounts for 95% of gallium refining. The high market concentration for critical minerals highlights significant vulnerabilities to supply shocks, whether from extreme weather events, industrial accidents, trade disruptions, or geopolitics. IEA

This is not a niche technical concern. It is the next front in the global competition for technological sovereignty.

AI Is Also the Solution

It would be a journalistic failure to leave this story as pure alarm. The IEA is equally insistent on the other side of the ledger, that AI, if deployed at scale in the energy sector, could help solve precisely the problems its infrastructure is creating.

Proven applications of AI could help firms in energy-intensive industries reduce their energy costs by 3 to 10 percentage points. For energy-hungry manufacturers, that is a transformative margin. In scientific discovery, AI led to a 45,000-fold acceleration in the mapping of protein structures – critical for designing new drugs – and could allow scientists to dramatically accelerate the process of finding and testing promising materials, battery chemistries, and carbon capture molecules. IEAIEA

The tech sector is also beginning to respond to the clean energy challenge it helped create. The tech sector accounted for around 40% of all corporate power purchase agreements for renewables signed in 2025, and is also now a major source of momentum for the nuclear and advanced geothermal industries. The pipeline of conditional offtake agreements between data centre operators and small modular reactor nuclear projects has grown from 25 gigawatts at the end of 2024 to 45 gigawatts today. IEA

As IEA Executive Director Fatih Birol has put it, AI is still an energy taker, but it is also becoming an energy maker – driving forward innovative solutions like next-generation nuclear reactors, flexible data centres, and long-duration energy storage. IEA

The Affordability Question

There is one dimension the IEA raises that deserves far greater public attention than it typically receives: what does all this mean for ordinary electricity bills?

The report finds that if the right mix of policies and infrastructure investment is in place, increases in electricity demand do not necessarily raise prices. However, data centres can create special challenges for electricity affordability, since they have large, concentrated power loads and scale up rapidly, often triggering the need for new generation assets and grid investment. IEA

The political economy here is delicate. Communities are already pushing back. Social acceptability is a growing issue, as communities push back against data centre projects, and concerns about affordability and environmental impacts rise. Policymakers cannot afford to dismiss these concerns as technophobia. They reflect legitimate questions about who bears the cost of infrastructure built to serve a global tech industry. IEA

The Policy Imperative

The IEA’s prescriptions are clear and, frankly, not yet being followed with sufficient urgency. Approaches that promote electricity system flexibility can help accelerate grid connections and ensure electricity affordability. System operators can explore non-firm grid connections and incentivise data centre developers to provide demand response in return for faster connection processes. IEA

On the industrial side, removing barriers to AI adoption in the energy sector can ensure AI is leveraged to enhance energy security and sustainability, with comprehensive policy frameworks that address data availability, cybersecurity, skills, and interoperability, crucial for boosting AI uptake. IEA

And for the developing world – the part of this story most often absent from Western coverage, the stakes are existential in a different way. Emerging and developing economies other than China account for 50% of the world’s internet users but less than 10% of global data centre capacity. Countries with a record of reliable and affordable power will be best placed to unlock data centre growth, localise computing power critical to homegrown AI development, and spur the IT industry more generally. IEA

The AI revolution, in other words, risks deepening the very digital divide it promises to transcend – unless policymakers in both rich and developing nations act with deliberate urgency.

The IEA’s Key Questions on Energy and AI is a landmark document precisely because it refuses false comfort. It does not tell us that efficiency gains will automatically solve the demand problem, nor that the investment surge is inherently catastrophic. What it tells us is that the outcome depends entirely on the choices made now – on grids, on supply chains, on regulation, and on whether the energy sector embraces AI as a tool rather than merely tolerating it as a load.

The technology is moving faster than the physical world it depends on. That gap is the defining energy challenge of this decade.

Other People are Reading

Vijay has done what few thought possible just a year ago, which is to break Tamil Nadu’s decades-old DMK-AIADMK political grip and emerge as a serious power centre in one of India’s most industrialised states. With Tamilaga Vettri Kazhagam, or TVK, leading in over 100 seats in counting trends, investors may now ask what a “Thalapathy government” mean for business, industry and the stock market?

Tamil Nadu may not move the benchmark indices overnight the way national elections do, but it remains one of India’s most important manufacturing and export engines. The state contributes roughly 8-9% of India’s GDP, is a major auto and electronics hub, and hosts global manufacturers across automobiles, semiconductors, defence, textiles and renewable energy.

Santosh Meena, Head of Research at Swastika Investmart, said the initial reaction from markets is likely to be measured rather than emotional.

“TVK’s strong showing is expected to generate mixed but cautious business sentiment. Vijay’s emphasis on welfare, social justice and anti-corruption may create short-term concerns around fiscal spending and regulatory oversight,” Meena said.

“But his clean image, youth connect, and promises around jobs, MSMEs, startups, and economic growth could improve governance perception if executed pragmatically.”

Why Tamil Nadu matters

Tamil Nadu is home to manufacturing clusters that support companies such as Hyundai Motor Company, Ford Motor Company, Foxconn, Tata Electronics and Ashok Leyland. The state is also central to India’s electronics export push, EV manufacturing plans and semiconductor ambitions.
Any policy shift in industrial incentives, labour reforms, land acquisition, power tariffs or logistics approvals can directly impact corporate capex decisions.
That is why investors are closely watching whether Vijay’s campaign rhetoric translates into continuity or disruption.
Madhavi Arora, Chief Economist at Emkay Global Financial Services, said Vijay’s rise marks a structural political shift rather than a simple electoral upset.

“A possible win by Vijay would mean a wholly new era of disruptive politics in Tamil Nadu, led by a system-level shift in a state long dominated by the Dravidian duopoly,” Arora said.

She added that Vijay represents “a digital-era, youth-driven mobilisation model,” though his ideology appears “heavily tilted toward welfare populism combined with development policies.” That combination may create near-term uncertainty over fiscal priorities.

Tamil Nadu already carries one of the highest debt burdens among large Indian states, and any aggressive expansion of welfare spending could raise concerns about fiscal discipline.

At the same time, analysts say Tamil Nadu’s industrial ecosystem is far stronger than many other politically volatile states, which could cushion investor concerns.

“In key hubs like Chennai, investor confidence is likely to remain resilient because Tamil Nadu already has strong industrial fundamentals, skilled manpower and infrastructure. Markets will now watch for early policy clarity on ease of doing business and industrial incentives,” he said.

Which sectors could react?

If policy continuity emerges, sectors linked to Tamil Nadu that could remain in focus include auto and auto ancillaries, electronics manufacturing, industrial parks and logistics, renewable energy and grid infrastructure.

Also read: Election impact on stock market explained: What likely BJP win in West Bengal means for investors

Companies with significant Tamil Nadu exposure, including TVS Motor Company, Ashok Leyland, Tube Investments of India, Titan Company and Tata Power Company, may see sentiment-driven moves if policy signals emerge in the coming weeks.

For now, analysts say the market is unlikely to panic.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)

Budget airlines are seeking help from the federal government amid the surge in jet fuel prices that prompted Spirit Airlines to cease operations after its bankruptcy exit plan faltered and a possible federal aid package failed to materialize.

Spirit on Saturday announced “with great disappointment” that it started an orderly wind-down of its operations, adding that it was “proud of the impact of our ultra-low-cost model on the industry over the last 34 years,” and that it had hoped to continue to do so.

Prior to Spirit’s announcement, President Donald Trump indicated his administration was negotiating a bailout of up to $500 million for Spirit that would’ve given the federal government warrants equal to about 90% of Spirit’s equity, according to a Wall Street Journal report. However, the parties were unable to reach a deal and Spirit had to halt operations.

Last week, the Journal first reported that a group of budget airlines were also pursuing $2.5 billion in federal assistance through stock warrants that could be converted into equity stakes, the Association of Value of Airlines (AVA) said in a statement. The group represents Frontier Airlines, Allegiant Air, Sun Country and Avelo, while it also represented Spirit prior to the airline halting operations.

SPIRIT AIRLINES TO CEASE OPERATIONS AFTER FEDERAL GOVERNMENT BAILOUT FAILS TO MATERIALIZE

Some of the Journal’s sources told the outlet that the group’s $2.5 billion figure was derived from an estimate of how much the airlines expect to spend on jet fuel this year compared with earlier forecasts, with the estimate assuming jet fuel prices will remain above $4 a gallon on average for the rest of the year.

The AVA issued a statement on Saturday following Spirit’s announcement that it was winding down its operations, saying that displaced travelers may find discounted fares offered by its members and other promotions aimed at helping those in need of alternative travel plans. 

It also said that low-cost carriers help support the broader air travel ecosystem by keeping prices in check for consumers.

BUDGET AIRLINES ASK FEDERAL GOVERNMENT FOR $2.5B IN AID TIED TO RISING JET FUEL COSTS

“Value airlines are the lynchpin that commands fare discipline across the entire airline industry with sustained competition that expands options for consumers. Make no mistake: if there are fewer value airlines, flying will become less affordable for Americans,” AVA said. 

“What happened to Spirit Airlines is a clear warning sign of what can occur when policy choices and regulatory dynamics tilt the competitive landscape toward the largest incumbent carriers.” 

“It underscores the need for continued collaboration among all stakeholders to ensure a balanced, competitive environment that supports the long-term viability of value airlines,” the group added.

SPIRIT AIRLINES SHUTS DOWN IMMEDIATELY, STRANDING TRAVELERS: HERE’S HOW TO GET YOUR MONEY BACK

AVA took issue with a statement by Airlines for America, a trade group representing larger carriers. 

Airlines for America’s statement from Saturday after Spirit halted operations criticized the low-cost carriers seeking government assistance because of “their inability to deal with high fuel prices” and saying it would “punish other airlines that have engaged in self-help in order to deal with increased costs and reward airlines who haven’t made those tough decisions.”

AVA said that some of those “self-help” measures would reduce options and raise costs for the traveling public, adding that budget carriers aren’t at fault for the situation.

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“The current surge in jet fuel prices is not the result of poor decision-making or a lack of discipline by value airlines,” AVA said. “It is an uncontrollable, extraordinary external shock that disproportionately impacts business models built on offering consistently affordable fare to price sensitive travelers.”

Tata Technologies on Monday reported a consolidated net profit of Rs 204 crore for the March quarter compared to Rs 189 crore in the year-ago period, an 8% year-on-year jump. The profit is attributable to the shareholders of the company.

The company’s revenue from operations in Q4FY26 stood at Rs 1,572 crore, up 22% from Rs 1,286 crore in the corresponding quarter of the previous financial year.

The company’s board also recommended a final dividend of Rs 8.35 and a one-time special dividend of Rs 3.35, aggregating to Rs 11.70 per equity share for the financial year ended March 31, 2026, subject to tax. The dividend, if approved at the Annual General Meeting (AGM) will be paid within 30 days from the conclusion of the AGM, the company filing said.

Company’s total operating revenue stood at Rs 1,572 crore, up 15% QoQ, while the services segment revenue stood at Rs 1,220 crore, up 15% QoQ. In USD terms, services segment revenues came in at $132.6 million, up 11.9% QoQ in cc.

The operating Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) was Rs 252 crore, up 31% QoQ while the EBITDA margin was reported at 16% versus 14.1% QoQ.

Adjusted net income stood at Rs 163 crore, up 20% QoQ, while the net income margin was at 10.3%, up 45 bps QoQ.
The company’s profit after tax (PAT) surged 2,975% sequentially from Rs 6.64 crore reported in Q3FY25 while the topline increased 15% from Rs 1,366 crore in the year-ago period.

Management commentary

Company’s Chief Executive Officer & Managing Director Warren Harris said he was pleased that the momentum built in Q3 carried through to Q4, delivering 12% revenue growth in cc and a 190 bps margin expansion. “This marks a clear inflection for the business, with growth broad‑based rather than concentrated in any single customer or program. Strong execution against guidance, improving order book visibility, and rising wins in full‑vehicle programs – which serve as a strategic wedge to deepen lifecycle engagement and enable systematic expansion across adjacent services – reinforce our confidence in FY27, where we continue to expect double‑digit organic growth with sustainable margin expansion,” Harris said.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)