Sterlite Technologies stock has surged sevenfold in 2026 so far, scaling a new peak of ₹757.70 on Monday. The company has bagged an order of nearly ₹2,700 crore from a leading hyperscaler. The order involves supply of high-density optical fibre cable products for three years starting from 2027 and can be extended by another two years based on mutual consent.
While improvement in business prospects and financials does help generate interest in the stock, it has to be backed by consistent buying. FIIs have turned bullish, raising their stake to 19.7% in Q1FY27 from 10.9% in Q3FY26.
But should retail investors follow FIIs and chase the stock?
Margin tailwinds
A bulk of the positive surprise in Ebitda margin expansion could be over now. Sterlite’s consolidated Ebitda margin was at 10.3% in Q3FY26, with the US tariff impact being the highest at 760 basis points. The US market contributed 54% of the company’s Q1FY27 revenue, up from 31% in Q1FY26, led by soaring data centre demand.
The US Supreme Court struck down the import tariff imposed by the Trump administration on February 20. A positive effect of this development was seen in the Q4FY26 management commentary on 29 April, which guided for a steep margin rise from 15.1% in Q4FY26 to 20% by FY27-end. The margin guidance was subsequently increased to 23% in the Q1FY27 earnings call.
Growth expectations
On revenue growth, Nuvama Research is building in 71% growth for FY27 and 34% for FY28. So, while results for the next few quarters may look good optically given FY26’s low base due to uncertainty around US import tariffs, the Street may have already factored in Sterlite’s likely better performance in FY27.
Meanwhile, order-inflow announcements generally bring excitement. While Sterlite’s order sizes appear huge, they are spread over multiple years. Its earlier bigger order win of ₹10,000 crore was also for FY27-FY29.
The current order book of around ₹20,000 crore, including the recent order, may suffice for the next couple of years. However, the stock trades at an EV/Ebitda multiple of 16x based on Nuvama’s FY28 estimates.
This is rich considering the limited moat due to the commodity nature of optical fiber cable business.