Sterlite Tech shares fall 27% from peak after 400% 2026 surge
Sterlite Technologies has surrendered a quarter of its value since a June peak following a massive first-half rally, but a $1 billion U.S. hyperscaler order and India's booming AI data centre sector suggest the fundamental re-rating remains intact.
Sterlite Technologies shares have declined 27% from a June record high of Rs 684, marking a sharp pause after a 400% surge in the first half of 2026. The Vedanta-backed company, in which the conglomerate holds a 0.98% stake, saw its market capitalisation balloon from just over Rs 4,000 crore to roughly Rs 27,000 crore in six months. The stock now trades near the Rs 500 level as early investors book profits.
The underlying business momentum, however, has strengthened rather than fractured. Hong Kong-based brokerage CLSA cites a recent $1 billion order from a U.S. hyperscaler as a major catalyst. The firm believes this deal significantly improves Sterlite's visibility on medium-term growth and embeds the optical fibre manufacturer deeper into the artificial intelligence data centre ecosystem. CLSA maintains a target price of Rs 655, implying a 24% upside from current levels.
The contract validates a broader structural shift in India's digital infrastructure. According to Nomura, India's data centre IT load expanded at a 29% compound annual growth rate between 2019 and 2025, surging from 350 megawatts to between 1.5 and 1.6 gigawatts. That trajectory significantly outpaces the global growth rate of roughly 20%, lifting India's share of worldwide data centre capacity from 1.5% to between 2% and 3%.
This domestic expansion dovetails with a global buildout. Hyperscalers are aggressively investing in AI-focused facilities, driving intense demand for the optical fibre cables and interconnect solutions that Sterlite produces. KPMG projects India's data centre industry revenue will reach $45.69 billion by 2033, propelled by cloud adoption, data localisation rules, and AI workloads. "With one billion internet users and businesses rapidly adopting cloud services, building domestic data centres is now a necessity," the consultancy noted.
Faced with this fundamental backdrop, technical analysts are divided on the stock's near-term direction but agree the recent correction is largely procedural. Sachin Gupta of Choice Equity Broking noted the stock's 14-day Relative Strength Index has cooled from extremely overbought territory above 90 to roughly 42, relieving excessive momentum. He pegs the Rs 440 to Rs 460 range as a key support zone that would keep the long-term uptrend intact.
For the rally to resume, Gupta noted the stock must first overcome immediate resistance between Rs 550 and Rs 560. A decisive breakout above that threshold could clear the path back toward Rs 630 and a potential retest of the lifetime high near Rs 680. Conversely, Bonanza analyst Virat Jagad warned that the stock remains under technical pressure as it trades below its 20-day and 50-day exponential moving averages.
