Sterlite Technologies, backed by Vedanta with a 0.98% stake, has seen its stock soar by an impressive 400% in 2026, capturing significant investor attention. However, the stock has recently faced a 27% decline from its June peak of Rs 684, prompting investors to reassess their positions.
The recent correction in Sterlite Technologies' stock price, which has brought it down nearly 25% to around Rs 500, is viewed by analysts as a normal pause in a broader bullish trend. Sachin Gupta, VP of Technical Research at Choice Equity Broking, notes that the correction has eased excessive momentum, with the 14-day RSI dropping to around 42. Gupta identifies the Rs 440-Rs 460 range as a key support zone, while the Rs 550-Rs 560 zone is the first major hurdle for further gains.
Virat Jagad, Senior Technical Research Analyst at Bonanza, highlights that the stock remains under technical pressure, trading below its 20-day and 50-day EMAs. He advises caution, suggesting that investors avoid aggressive buying until the stock moves above its short-term moving averages.
“The correction has also helped ease excessive momentum, with the 14-day Relative Strength Index (RSI) falling from extremely overbought levels above 90 to around 42, pointing to a healthier technical setup.”
Sachin Gupta, VP, Technical Research at Choice Equity Broking
From a fundamental perspective, CLSA is optimistic about Sterlite Technologies, projecting a 24% upside with a target price of Rs 655. This optimism is driven by a significant $1 billion order from a U.S. hyperscaler, which strengthens Sterlite's position in the AI data centre ecosystem.
The rally in Sterlite Technologies' share price is supported by the expansion of India's data centre industry, which is experiencing rapid growth due to digitalisation and AI infrastructure demands. According to Nomura, India's data centre IT load is expected to grow at a CAGR of about 29% from 2019 to 2025, outpacing global growth rates.
“The stock remains under technical pressure as it trades below its 20-day and 50-day EMAs, while an RSI near 40 indicates weak momentum without reaching deeply oversold levels.”
Virat Jagad, Senior Technical Research Analyst at Bonanza
Background
Sterlite Technologies' recent stock performance is part of a broader trend in the data centre industry, which is experiencing rapid growth due to increasing digitalisation and demand for AI infrastructure. This trend is not only significant in India but also globally, as hyperscalers invest heavily in AI-focused data centres.
Investors should monitor Sterlite Technologies' ability to maintain its support levels and break through resistance zones. The company's strategic moves in the data centre sector and international markets will be crucial in determining its future performance.
