A telecom stock has staged an astonishing rally this year, leaving investors in awe of its stellar multibagger gains despite weak sentiment in the broader stock market.
The stock we are discussing is Sterlite Technologies – a company that provides end-to-end solutions for building AI-ready infrastructure, FTTx, rural and enterprise networks. The company delivers its solutions in more than 100 countries, and has manufacturing facilities in North America, Europe and Asia.
In intraday trade on Monday, 5 October, the stock hit a 52-week high of ₹989.70, rising nearly 4% after hitting upper circuits for the last three consecutive sessions.
On 1 October, the company said one of its wholly owned subsidiaries had entered into a long-term supply agreement (LTSA) with a hyperscale partner. The order is for the supply of optical connectivity products in each calendar year from 2026 to 2030, with a total potential contract value of nearly $1.2 billion, based on prevailing selling prices for the connectivity products supplied.
Sterlite Technologies share price trend
Year-to-date, the stock has surged 860%, according to current BSE data. This means that ₹10.4 lakh invested on 31 December 2025 would be worth nearly ₹1 crore now—just a little over nine months later.
In a shorter timeframe of six months, the stock has surged over 450%.
Sterlite Tech share price touched a 52-week low of ₹84.65 on 27 January this year. At the current juncture, it is up 1069% from its one-year low level.
Nirmal Bang sees another 40% upside
According to Nirmal Bang Institutional Equities, the stock has more steam left. The brokerage firm has a buy call on the stock with a target price of ₹1,340, implying a 40% upside potential.
“We initiate coverage with a ‘buy’ recommendation and a target price of ₹1,340, based on nearly 20 times Sep-28E EBITDA on an SOTP basis,” said Nirmal Bang, adding that it sees a strong structural demand outlook for Sterlite Technologies, led by three key drivers: AI and data-centre expansion, government-led broadband programmes, and fifth-generation/sixth-generation (5G/6G) roll-outs.
“Global data-centre capacity is expected to more than double from nearly 102GW in 2026 to nearly 220GW by 2030. Together, they are expected to lift ex-China optical fibre demand at a nearly 12% CAGR through 2030,” Nirmal Bang underscored.
The brokerage firm pointed out that this demand, led by data-centre products, helped the company turn a loss of ₹123 crore in FY25 into a profit of ₹56 crore in FY26.
“With the order book converting into sales, revenue is expected to rise nearly 103% to ₹9,625.6 crore in FY27 and to ₹16,828.8 crore by FY29, as OFC volumes grow from 3.2 crore fibre-km in FY26 to 6.8 crore fibre-km by FY29E,” Nirmal Bang said.
Beyond cables, Nirmal Bang underscored that Sterlite Technologies is increasing its revenue through connectivity products, with a rising attach rate, reflecting the extent of connectivity sold alongside fibre cables, providing an additional growth and margin lever as data-centre deployments scale up.
Nirmal Bang’s estimates show Sterlite Tech’s EBITDA margin may expand from 12.3% in FY26 to 23% in FY27E, aided by gross margin improving from 49.7% to 52% on a richer product mix. Earnings recovery may drive a sharp improvement in return ratios, with RoE rising from 2.5% in FY26 to 28.4% by FY29E, and RoCE from 3.5% to 27.4%.
“Operating leverage should do most of the work: staff and other overheads are likely to fall from nearly 37% to nearly 29% of revenue as sales double. A higher North American share, more higher-margin AI and data-centre business, and higher OFC realisations ( ₹1,219 per fibre-km in FY26 to ₹1,942 per fibre-km by FY29E) should further support this,” said Nirmal Bang.
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Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of the broking firm, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
