Leading financial analysts are projecting significant growth for Sterlite Technologies Ltd. (STL) shares, with at least four major brokerages setting price targets that imply an upside of up to 95%. This bullish outlook follows the company's strong September quarter results and is largely attributed to its expanding hyperscaler order book.
Brokerages See Strong Upside Potential
Despite Sterlite Tech shares already experiencing a remarkable 585% surge over the past year, analysts remain optimistic. CLSA's Saurabh Mehrotra maintained an 'Accumulate' rating, raising his target price to Rs 1,610 from Rs 1,400. Nomura reiterated its 'Buy' rating with a target of Rs 1,350. Nuvama Institutional Equities also upheld its 'Buy' rating, increasing its target to Rs 1,460 from Rs 1,310.
Nirmal Bang Institutional Equities joined the chorus, maintaining a 'Buy' rating and setting a target price of Rs 1,544. These targets collectively suggest a substantial potential for further appreciation in the stock.
Driving Factors: Hyperscalers and AI Demand
The core of the brokerages' confidence lies in Sterlite Tech's robust order visibility and strategic positioning. Analysts note that while broader industry discussions point to a potential moderation in data center spending, STL is well-placed to accelerate growth through efficient order book execution. The company reported a strong H1FY27 order intake of Rs 32,030 crore, leading to a record order book of Rs 35,270 crore.
A significant component of this is a five-year hyperscaler agreement valued at Rs 11,500 crore. Management anticipates that Data Centre & Cloud will contribute 50% of FY27 revenue, driven by strong AI-led demand. Connectivity attach rates are also targeted to increase beyond 25% from 24% in H1FY27.
Capacity Expansion and Innovative Solutions
To meet anticipated demand, Sterlite Tech is actively expanding its manufacturing capacity by 50%. The company plans to invest Rs 1,000 crore annually from FY27 to FY29, which includes the establishment of a new pre-terminated solutions facility. These investments underscore STL's commitment to scaling operations and enhancing its product offerings.
Furthermore, Sterlite Tech is at the forefront of advanced connectivity solutions. It has commercialized G.654.E fibre and initiated pilot programs for hollow-core fibre. Nuvama Institutional Equities highlighted STL's expansion into high-density pre-terminated trunk assemblies and pre-plenum-rated solutions for in-data-hall connectivity. The company is also progressing with multi-core fibre, conducting real-world trials, including successful ones in the UK, solidifying its position in higher-value optical connectivity segments.
The management has also raised its FY29 EBITDA margin target to over 30%, while maintaining its ambitious Rs 20,000 crore revenue target, signaling strong confidence in future profitability and market leadership.