HFCL and Sterlite Tech Stocks Rally on AI and Data Center Boom
Shares of Sterlite Technologies and HFCL rebounded on Friday, each gaining 5% to snap a two-session losing streak as broader global markets recovered from an earlier week selloff. Sterlite Technologies reached a day’s high of Rs 600, while HFCL shares hit an upper circuit, reversing an 8% decline experienced over the previous two trading days.
Market Drivers and Global Sentiment
The rally in Indian technology stocks followed a sharp improvement in global investor sentiment. According to market data, South Korea’s KOSPI index rose more than 8% in a single session, while the U.S. Nasdaq Composite increased 2.54% on Thursday. Analysts attribute this shift to a reduction in geopolitical tensions and a drop in oil prices to a two-month low. Market optimism was further bolstered by comments from U.S. President Donald Trump, who indicated that a peace deal with Iran could materialize as early as this weekend.
Growth Prospects for Sterlite and HFCL
Both companies are positioned as beneficiaries of India’s expanding data centre industry, which is experiencing a multi-year growth phase driven by cloud adoption and artificial intelligence demand. Sterlite Technologies has seen a 488% increase in share price during 2026. Brokerage firm CLSA maintains an “Outperform” rating on the stock with a target of Rs 655, citing a $1 billion order win from a U.S. hyperscaler that is expected to improve medium-term growth visibility.
HFCL, which gained 170% in 2026, reported a significant financial turnaround in the March quarter. The company’s revenue nearly doubled year-on-year to Rs 1,824 crore, with profit after tax reaching Rs 184 crore compared to a loss of Rs 83 crore in the previous year. Balaji Rao, a research analyst at Bonanza, notes that the firm is undergoing a structural shift, with product revenue increasing from 27% of the mix in FY21 to 59% in FY26.
Future Operational Outlook
Looking ahead, HFCL is expanding into defence and aerospace through the acquisition of Defsys. The company is developing a 1,000-acre ammunition complex in Andhra Pradesh and intends to scale its data centre interconnect solutions, targeting revenue of Rs 400 crore in FY27 and Rs 800 crore in FY28. Additionally, the company plans to increase its optical fibre cable capacity by 25% by December 2026, with backward integration into preforms expected to lower raw material costs by up to 20%.
Frequently Asked Questions
What triggered the recent rebound in Sterlite and HFCL shares?
The shares recovered following a broader global market rebound, fueled by easing geopolitical tensions, lower oil prices, and positive comments from U.S. President Donald Trump regarding a potential peace deal with Iran.
Why do analysts maintain a positive outlook on Sterlite Technologies?
CLSA projects a potential 14.5% climb from current levels, supported by a $1 billion order from a U.S. hyperscaler and an expected 49% EBITDA CAGR between FY26 and FY29.
How is HFCL diversifying its business model?
Beyond optical fibre cables, HFCL is expanding into defence and aerospace, establishing an ammunition complex in Andhra Pradesh and scaling its data centre interconnect solutions business.
Given the rapid expansion of India’s data centre capacity, how do you see domestic manufacturing shifts impacting long-term sector stability?