Sterlite Technologies Ltd. (STL) shares plunged 5% on Monday, hitting their lower circuit limit for the second consecutive trading session. This decline follows a similar 5% drop on Friday, ending an impressive 11-day rally for the company's stock.
The shares were locked at Rs 588.30 on the BSE on Monday, reflecting a broader market trend of an 'AI reversal trade' globally. Despite this recent downturn, Sterlite Technologies has seen significant gains, with the stock up 56% over the past month and a remarkable 513.90% over the last six months, as of early June 2026.
Responding to queries from the NSE and BSE, Sterlite Technologies issued a clarification on June 3, stating that it was not aware of any unpublished price-sensitive information that could be influencing the recent price and volume movements. The company affirmed its commitment to making all necessary disclosures as per SEBI regulations.
Major Order Boosts Outlook
The recent volatility follows a period of strong positive news for STL. On May 26, foreign brokerage CLSA initiated coverage on Sterlite Technologies, citing a substantial $1.1 billion order from a US hyperscaler. This multi-year Product Award Letter (PAL) covers the supply of optical connectivity products for building AI data center infrastructure between FY27 and FY29 through an STL subsidiary.
CLSA highlighted this as a significant win for Sterlite's AI data center optical products, projecting a 49% EBITDA growth for the company over FY26-29. The brokerage noted that STL's order book in FY26 was already up 67% to Rs 7,300 crore before this mega deal.
The new order prompted CLSA to increase its earnings forecasts by 25-64% for FY27-29 and raise its price target for STL shares from Rs 405 to Rs 655. This strategic expansion into AI data centers is expected to improve future growth visibility and underscore the company's competitiveness in international markets.
Focus on Data Center Segment
Sterlite Technologies has been actively working to scale the contribution from its data center segment, which accounted for 19% of its share in FY26. The company launched its 'Neuralis' suite, purpose-built connectivity solutions designed for AI data centers, enabling ultra-high-density cabling crucial for GPU-intensive workloads.
This strategic focus aligns with broader market trends. Mordor Intelligence forecasts North America's data center capacity to expand from 60GW to 114GW by 2030. In India, data centers are projected to grow fivefold to 8GW, driven by supportive government policies, power availability, and tax holidays extending to 2047.