Sterlite Technologies has delivered exceptional returns with its stock rising nearly fivefold over the past year, with around 2.8 times of those gains coming in 2026 so far. According to reports from NDTV Profit, the company's remarkable performance reflects its strategic positioning in the artificial intelligence-driven data centre expansion. The stock's surge has been driven by the company's transformation from a traditional cable manufacturer to a fully integrated optical connectivity provider targeting AI and cloud infrastructure markets.
The surge in AI workloads is driving unprecedented demand for optical connectivity, particularly in data centres where bandwidth requirements are moving from 400G to 800G and up to 1.6 terabits per second. As reported by NDTV Profit, at these levels, copper-based interconnections face physical limitations, making optical fibre necessary for large-scale AI infrastructure. Data centres are expected to become the fastest-growing driver of global optical fibre demand, with nearly 70% of data centre-related demand projected to be AI-led by 2030. North America remains the centre of this expansion, supported by an estimated $762 billion in hyperscaler capital expenditure in 2026, with that spending expected to increase optical cable demand by 40% next year.
STL holds an 8% share of the global optical fibre cable market excluding China and has built an intellectual property portfolio of more than 780 patents. According to NDTV Profit, the company is supplying and co-developing optical solutions with hyperscalers including Google, Microsoft and Amazon Web Services. Its "Glass to Gigabit" model allows STL to manage the manufacturing chain internally, helping the company control costs, maintain product quality and develop customised solutions with telecom and cloud operators. The company's North America contribution to revenue increased to 39% in FY26 from 25% in FY25, with North America becoming STL's fastest-growing market as optical demand in the region is projected to grow at a compound annual growth rate of 15% through 2030.
STL reported revenue of ₹4,745 crore in FY26, up 19% from a year earlier, with Ebitda rising 39% to ₹628 crore and margins expanding to 13.2%. As reported by NDTV Profit, the company reported a net profit of ₹56 crore in FY26, compared with a net loss of ₹123 crore in FY25. The company's order book stood at ₹7,309 crore as of March 31, 2026, up 67% year-on-year, with ₹1,468 crore scheduled for execution in the first quarter of FY27 and the remaining ₹5,841 crore from the second quarter onward. STL plans to increase the contribution from its enterprise and data centre businesses to 30% of revenue in FY27 from 19% in FY26, while targeting margins of 20% by the fourth quarter of FY27.
Despite the operational recovery, STL's valuation has risen sharply after the stock rally, with the company trading at an enterprise value-to-Ebitda multiple of 33 times, above its 10-year median of 11 times. According to NDTV Profit, historically, the stock has traded at or below 20 times EV/Ebitda. The company faces industry and legal risks, including dependence on telecom and hyperscaler capital expenditure, and any slowdown in AI data centre investments could affect growth. Additionally, STL is appealing against a $96.5 million jury verdict linked to an intellectual property lawsuit filed by Prysmian Cables and Systems USA against its US subsidiary. The company is also targeting a net debt-to-Ebitda ratio below 1.2x in FY27, compared with 1.3x in FY26.
