Sterlite Technologies: CLSA Sees 46% Upside on AI Data Centre Orders
By Business Desk
CLSA maintains ‘Outperform’ on Sterlite Technologies (STL), projecting 46% upside with a Rs 950 target price, driven by a Rs 18,600 crore AI data centre order book.
CLSA has reaffirmed its ‘Outperform’ rating for Sterlite Technologies (STL), forecasting a substantial 46% upside with a target price of Rs 950. This positive outlook stems from STL’s significantly expanded order book in the first quarter of fiscal year 2027.
Key Financial Highlights
- Order book surged 155% quarter-on-quarter to Rs 18,600 crore in 1QFY27.
- Includes a $1.1 billion AI data-center order from a US hyperscaler.
- Data center revenue contribution rose from 1% in FY26 to 21% in 1QFY27.
The brokerage firm emphasizes STL’s strong position to capitalize on the escalating demand for optical fiber, crucial for data centers, particularly those supporting Artificial Intelligence in the US and India. This increased demand is a core driver for the company’s projected growth and recent contract acquisitions.
CLSA projects robust financial performance, anticipating compound annual growth rates of 14% to 21% for STL’s revenue and EBITDA between FY27 and FY29. The company’s Neuralis AI data-center portfolio has been pivotal in securing major contracts, including the significant $1.1 billion order from a US hyperscaler, further solidifying its market position.
Looking ahead, CLSA expects a significant improvement in STL’s financial health, with net debt projected to convert into net cash by FY28. This positive trajectory is supported by high earnings visibility and an expanding order book.