As foreign institutional investors (FIIs) have been net sellers for a prolonged period, while domestic institutional investors (DIIs), including mutual funds, have been buying domestic stocks at an aggressive pace, their paths hardly cross.
However, in the April-June quarter, one telecom stock witnessed buying from both FIIs and DIIs. Even as FIIs bought into this company, overall they sold telecom stocks worth ₹5,162 crore during the quarter. (Source: NSDL)
The buying interest? Sterlite Technologies Limited.
FIIs increased their stake by 6.73% points, taking their total holding to over 18.2% at the end of Q1FY27. DIIs, on the other hand, raised their stake by 0.56% points, taking the total holding to 11.43% during the period.
Institutional Shareholding Change
| Shareholder | Q4FY26 | Q1FY27 | Change (% points) |
| FIIs | 11.47% | 18.2% | +6.73 |
| DIIs | 10.87% | 11.43% | +0.56 |
Let’s try to figure out what made institutional investors increase their stake in this telecom business.
Sterlite Technologies – A transition into Digital Connectivity Business
Sterlite Technologies is one of the largest and lowest-cost optical fiber manufacturers with a global share of around 8% (ex-China) in the optical fiber cables (OFC) market as at the end of FY26.
With over 780 patents filed and granted, and ten advanced manufacturing facilities, the company operates across the entire value chain starting from the manufacturing of glass preforms to the final product that is OFC.
Having said that, the company is now positioning itself as an end-to-end digital connectivity solutions provider for Artificial Intelligence (AI) data centers and enterprises across industries, instead of just depending on a single product.
Management expects this transition to increase the market share of the company in regions like North America and Europe, while increasing the manufacturing base in India.
Neuralis – The Central Nervous System of Modern Data Centre
Towards the end of FY26, Sterlite launched Neuralis in the US market, an AI-focused connectivity portfolio which includes high-density backbone cables, pre-terminated fiber trunks, fiber array cords, and assemblies, Celesta IBR cables, Fiber Enclosure and panels.
Compared to traditional cloud servers, these products are crucial for AI servers, as Graphics Processing Units (GPUs) continuously connect.
Furthermore, the company projected AI infrastructure to account for 70% of the global data center demand by 2030 and the global capex for data centers to surge up to $2.8 trillion by 2029, which indicates increased cross-selling opportunities for the company.
India’s First Ever MCF Testbed
Aligning with the transition goals of the company, during FY26, Sterlite introduced a range of new fibers, which include multi-core fiber (MCF), offering up to 7 times higher transmission capacity at lower infrastructure cost. This fiber is currently being tested on a five-kilometer testbed at IIT Madras.
Then the company developed Hollow Core fiber (HCF), which supports 800G to 1.6T networks and has lower latency, specifically designed for AI data centers and Data Center Interconnects (DCI).
Another fiber was developed during the period, G654E fiber, which helps in reducing signal loss and offers a large core range supporting ultra-high-capacity backbone networks.
Sterlite’s management indicated that major capacity expansion plans are almost completed and now the company will focus on optimum utilization of the existing manufacturing facilities and continue to invest in product development.
As per a report by ICRA, the company raised ₹1,500 crore via qualified institutional placement in July 2026 to repay existing debt of the company, strengthening its balance sheet and improving creditability of the business.
Order Flow Double Down
During FY26, the company received fresh orders worth ₹7,687 crore, increasing by 109% YoY from ₹3,672 crore in FY25.
Some of the key orders received during the fiscal year 2026 include multiple orders from North American AI Data Centers, and a long-term order from a Tier-1 Indian telecom operator.
At the end of the year, the order book of the company stood at ₹7,309 crore, up by 67% YoY from ₹4,378 crore at the end of FY25.
However, the company received one of its biggest orders of all time in May 2026. It is a multi-year contract worth $1.11 billion, from a hyperscale partner, for the supply of optical connectivity products.
Sterlite Back to Profitability
Revenue for FY26 stood at ₹4,745 crore, up from ₹3,996 crore in FY25, growing at 18.7% YoY.
Growth in revenue along with reduction in the operational and finance cost led Sterlite to profitability again in FY26 after the company reported losses for the past two fiscal years.
Net profit for FY26 stood at Rs 56 crore, against losses of Rs 123 crore in FY25.
However, the company’s return on equity (ROE) for FY26 stood at 2.24%, lower than the industry median of 4.24%.
Key Large-Scale Inflows: Which Funds Are Buying?
During the April-June quarter, the top two FIIs who purchased a stake in the company are –
- Smallcap World Fund Inc. purchased a 2.36% stake in the company
- Sixteenth Street Asian Gems Fund bought 1.16% stake during the period
Amongst DIIs, again two mutual funds bought the stock aggressively during the quarter –
- Motilal Oswal Midcap Fund bought 4.74% stake
- Bandhan Flexi Cap Fund bought 2.75% stake
Decoding the Turnaround: Operational Performance vs Industry Valuation
The stock was trading at an Enterprise Value/ Earnings before interest, tax, depreciation, and amortization (EV/EBITDA) of 45.2x, compared to the industry median of 40.62x, indicating that the stock is relatively overpriced compared to its peers.
1-Year Share Price Chart of Sterlite Technologies Ltd.
What Lies Ahead for Sterlite Technologies?
Despite a broader FII selloff during the first quarter of FY27, Sterlite Technologies emerged as a rare stock that was bought by both FIIs and DIIs at an aggressive pace during the quarter. The institutional investors are perhaps looking forward to the transition of the company from an OFC manufacturer to a complete digital connectivity solution provider.
Having said that, the transition is in its early stages, and the future growth of the company depends on successful execution of the plans. So, for now, you can add this stock to your watchlist to keep an eye on whether this high-conviction bet of the institutional investors plays out in the future or not.
Disclaimer:
We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
Maumita Mitra is a seasoned writer specializing in demystifying the world of investment for a broad audience. She has a keen eye for detail and a knack for explaining complex financial concepts in the simplest manner possible.
Disclosure: The writer and her dependents do not hold the stocks discussed in this article.
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