FIIs triple stake in Sterlite Tech after a stellar 400% surge this year. More legs to the rally?

India has been at the receiving end of relentless foreign investor selling, but the tide may be turning, at least for a select few stocks. As FIIs begin to return to pockets of value in the Indian market, Vedanta-backed Sterlite Technologies has emerged as one of the stocks drawing their attention.

The optical fibre maker has emerged as a notable beneficiary of this selective foreign interest. The stock has skyrocketed 415% in 2026, and FIIs have sharply increased their exposure, nearly tripling their stake from 6.7% in June 2025 to 19.7% as of July 1, 2026.

Foreign investors have pulled out nearly $20 billion from India in FY26, but the selling has not been uniform across the market. Instead, overseas investors are increasingly becoming more selective, with valuations playing a bigger role in where they put their money.

More legs to Sterlite Tech share price rally?

On Monday, international brokerage CLSA upgraded the stock to Outperform and assigned a target price of Rs 950, implying an upside of 70% from current market levels. The brokerage said Sterlite Technologies' order book surged 155% QoQ to Rs 18,600 crore, pointing to a strong growth outlook.

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Factoring in the company's recent Rs 1,500 crore QIP fundraising and the significant Q1 FY27 beat, CLSA raised its forecasts by 7-125% for FY27-29. The brokerage now sees Sterlite Technologies delivering a 62% EBITDA CAGR.

Sterlite Tech secured a multi-year contract worth $1.11 billion, or more than Rs 10,000 crore, to supply optical connectivity products for next-generation AI data centres. The company also received multiple hyperscaler orders worth more than $100 million for Neuralis, its integrated data centre solutions portfolio. It also won a strategic order to supply long-haul, dark-fibre high-density micro-cables to a major connectivity infrastructure provider.

Sterlite Tech Q1 results

Sterlite Technologies reported its strongest quarterly performance in Q1FY27, helped by higher demand for optical connectivity products, growth in its data centre business and a record order book linked to AI-ready digital infrastructure.

The company reported revenue of Rs 1,910 crore for the quarter ended June 30, up 87% from Rs 1,019 crore in the same quarter last year. Sequentially, revenue rose 33% from Rs 1,441 crore in Q4FY26. Profit after tax rose 870% to Rs 197 crore from Rs 10 crore a year earlier. In the March quarter, the company had reported PAT of Rs 59 crore.

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EBITDA rose to Rs 397 crore, compared with Rs 140 crore in Q1FY26 and Rs 218 crore in the previous quarter. EBITDA margin stood at 20.8%, the highest in nearly 20 quarters, helped by a better product mix, operating leverage and higher contribution from the data centre business.

STL Managing Director Ankit Agarwal said Q1 FY27 was the strongest quarter in the company's history, with record revenue and profitability reflecting the strength of its AI-ready digital infrastructure portfolio and the trust placed by hyperscalers and telecom operators.

He said the rapid scale-up of the Data Centre business shows how decisively STL has aligned itself with the AI infrastructure buildout. With a record order book and strong customer trust, the company expects to continue delivering innovative and reliable solutions to support its customers' growth.

Data centre boom

The surge in foreign ownership comes at a time when India's data centre industry is entering what could be a multi-year expansion phase. Rapid digitalisation, growing cloud adoption and the rising infrastructure needs of artificial intelligence are driving demand for data centres and, in turn, optical fibre connectivity.

According to international brokerage Nomura, India's data centre IT load has grown from around 350 MW in 2019 to nearly 1.5-1.6 GW in 2025. That represents a CAGR of about 29%, significantly faster than the roughly 20% growth recorded globally.

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