Multibagger stock to buy: Despite 8x rally in 2026, analysts see over 115% upside in this share

Brokerage firms continue to remain positive on Sterlite Technologies Ltd despite a sharp rally over the past 10 months. They believe the stock could more than double from current levels, driven by rising demand from data centres, capacity expansion, strong financial performance and a robust order book.

Shares of Sterlite Technologies hit the lower circuit limit of 5 per cent at Rs 757 on Thursday, with its market capitalisation slipping below Rs 39,000 crore. The stock has fallen more than 28 per cent from its 52-week high of Rs 1,054.45, hit on October 7, 2026. Despite this correction, the stock has soared nearly 795 per cent from its 52-week low of Rs 84.65, hit on January 27, 2026.

Sterlite Technologies reported a nearly 128-fold year-on-year (YoY) jump in net profit to Rs 517 crore, compared with Rs 4 crore in the year-ago period. Revenue from operations increased 145 per cent YoY to Rs 2,529 crore, while EBITDA surged fivefold to Rs 846 crore, with margins at 27.1 per cent during the reported period. The company's order book hit an all-time high of Rs 35,274 crore.

Sterlite Technologies delivered a robust Q2FY27 performance, with revenue, adjusted EBITDA and PAT surging 32 per cent, 69 per cent and 100 per cent quarter-on-quarter (QoQ), respectively. Multi-year growth visibility is exceptionally strong, backed by a record order backlog of Rs 35,274 crore, anchored by a 1.2 billion multi-year hyperscaler order win, a landmark $1.11 billion AI data centre contract and large domestic telecom orders, said JM Financial.

Management maintained its FY29 revenue target of Rs 20,000 crore but upgraded its FY29 EBITDA margin target to 30 per cent. It expects to deliver better margins than those recorded in Q2FY27 for the rest of FY27, in line with the upgraded target. "We expect it to clock 51 per cent, 91 per cent and 302 per cent consolidated revenue, EBITDA and PAT CAGRs, respectively, over FY26–FY29E," JM Financial said, reiterating its 'buy' rating with a target price of Rs 1,020.

However, analysts highlighted several key risks, including difficulties in sourcing critical raw materials, a sharp contraction in hyperscaler and data centre capital expenditure, trade barriers such as anti-dumping duties and ongoing tariff wars, lower telecom capital expenditure intensity, and legal and regulatory risks.

Sterlite Technologies is well positioned to capitalise on strong global demand for data centres and hyperscale infrastructure, supported by its robust order book, technological capabilities and expanding capacity. Strong execution visibility, a rising contribution from data centre and cloud businesses, and sustained margin expansion are expected to drive healthy earnings growth, said Nirmal Bang Institutional Equities.

"We estimate normalised EBITDA margins of 26.3 per cent in FY27E and 30.9 per cent in FY29E, translating into a 42 per cent EBITDA CAGR and a 53 per cent PAT CAGR over FY27E–FY29E. We maintain our valuation multiple of 20 times blended FY28E/FY29E EV/EBITDA and reiterate our 'buy' rating with a revised target price of Rs 1,544," it added.

Among other brokerage firms, Arihant Capital Markets, with a target price of Rs 1,229; Nomura, with a target price of Rs 1,350; and Nuvama Institutional Equities, with a target price of Rs 1,460, have 'buy' ratings on Sterlite Technologies. CLSA, which has the highest target price of Rs 1,644 on the stock, has assigned an 'accumulate' rating. CLSA's target price implies an upside potential of approximately 117 per cent.