Sterlite Tech and HFCL Rebound 5% as India Data Center Boom Sustains Optical Fiber Demand

The Quick Take

• Shares of HFCL and Sterlite Technologies surged up to 5%, recovering from a two-day decline, on renewed tech sector confidence
• India's booming data center industry, fueled by digitalization and AI demand, underpins structural demand for optical fiber cable
• Both companies are key players in optical fiber cable manufacturing, with analysts maintaining positive outlooks on their growth prospects

Shares of HFCL Limited and Sterlite Technologies surged up to 5% on Friday, recovering from a two-day decline that had created a buying opportunity for investors in India's optical fiber cable sector. Economic Times Markets reported that the rebound was driven by a global tech stock recovery combined with India's structurally robust data center industry, which continues to generate sustained demand for optical fiber infrastructure. Both companies occupy critical positions in India's digital connectivity supply chain as the country's data center capacity expands to meet AI and cloud computing requirements.

India's data center sector is experiencing one of its most aggressive build-out phases, driven by global hyperscalers including Microsoft, Google, and Amazon establishing Indian data center campuses, alongside domestic cloud operators scaling capacity. Each new data center requires extensive optical fiber cable for internal connectivity and external network connections — creating a demand floor for HFCL and Sterlite Technologies that analysts described as structurally sound. HFCL also benefits from government-led BharatNet rural broadband expansion, adding a public sector demand layer that diversifies revenue beyond private data center clients.

The key forward variable for both stocks is the pace of hyperscaler capex commitments in India. Microsoft has publicly committed $3 billion+ in Indian data center investment, Google has announced similar commitments, and Amazon has outlined India as a priority expansion market — these commitments drive multi-year optical fiber demand visibility. Watch for quarterly order book disclosures from HFCL and Sterlite Technologies in their next earnings calls, as expanding order backlogs would confirm the structural demand thesis. BharatNet Phase 3 contract awards are an additional catalyst that would provide government-backed revenue stability.

Synthesized from 1 source.