FIIs Surge into Select Stocks: Vedanta's Sterlite Tech Hits Stellar Rally as AI Data Centre Boom Fuels 400% Gains

FIIs Surge into Select Stocks: Vedanta's Sterlite Tech Hits Stellar Rally as AI Data Centre Boom Fuels 400% Gains​

While foreign investors have pulled approximately $20 billion from the Indian market in FY26, the selling trend has been neither uniform nor indiscriminate. Instead, overseas institutional players are becoming significantly more selective, placing their capital strategically into high-growth value pockets. Among these favored stocks, Vedanta-backed Sterlite Technologies (STL) has emerged as a prime beneficiary of this focused foreign interest, underpinning its phenomenal market performance.

The optical fibre maker has witnessed a remarkable ascent in 2026, skyrocketing by 415%. This rally is strongly supported by growing institutional confidence. Foreign Institutional Investors (FIIs) have dramatically increased their stake in the company. Their exposure rose nearly threefold, climbing from 6.7% in June 2025 to a robust 19.7% as of July 1, 2026.

Why International Analysts Are Bullish on Sterlite Technologies​

The market’s positive sentiment towards STL is reinforced by strong institutional analysis and massive order flow improvements. CLSA recently upgraded the stock to Outperform, setting an ambitious target price of Rs 950, which implies a 70% upside from current levels. This optimistic outlook is directly tied to the company's explosive growth in business pipelines.

Sterlite Technologies reported that its order book has surged by 155% Quarter-on-Quarter (QoQ), reaching an impressive Rs 18,600 crore. The firm also benefits from recent strategic wins and major contract acquisitions. STL secured a multi-year contract worth $1.11 billion, or more than Rs 10,000 crore, specifically to supply optical connectivity products for next-generation AI data centres.

Further bolstering confidence are multiple hyperscaler orders valued at over $100 million each, placed for Neuralis, STL’s integrated data centre solutions portfolio. The company also secured a critical strategic order to supply long-haul, dark-fibre high-density micro-cables to a major connectivity infrastructure provider.

Q1 FY27 Results Confirm Industry Leadership​

Sterlite Technologies reported its strongest quarterly performance in Q1FY27, validating the demand for AI-ready digital infrastructure. The company recorded revenue of Rs 1,910 crore for the quarter ended June 30, marking an 87% increase from the same quarter last year (Q4FY26). Sequentially, this figure rose 33% from Rs 1,441 crore reported in Q4FY26.

The profitability surge was equally significant. Profit After Tax (PAT) jumped by a massive 870%, reaching Rs 197 crore from just Rs 10 crore a year earlier. This contrasts sharply with the March quarter results when the company had reported PAT of Rs 59 crore. EBITDA climbed to Rs 397 crore, up from Rs 218 crore in the previous quarter and Rs 140 crore in Q1FY26.

Data Centre Boom Drives Record Profitability​

The heightened focus on Sterlite Technologies coincides with India's burgeoning data centre market. Rapid digitalization, accelerating cloud adoption, and the infrastructural demands of artificial intelligence are collectively driving intense demand for optical fibre connectivity. This shift presents a multi-year expansion phase for the Indian tech infrastructure sector.

STL Managing Director Ankit Agarwal heralded Q1 FY27 as the strongest quarter in the company’s history, citing record revenue and profitability. He stated that these results reflect both the strength of the AI-ready digital infrastructure portfolio and the high trust placed by major hyperscalers and telecom operators.

The rapid scale-up observed in the Data Centre business confirms STL's decisive alignment with the broader AI infrastructure buildout trend. This growth is underpinned globally, as Nomura points out that India’s data centre IT load has risen from approximately 350 MW in 2019 to nearly 1.5-1.6 GW in 2025. This trajectory represents a CAGR of about 29%, which significantly outpaces the global growth rate of around 20%.