Best performing Smallcap stock of 2026 could rally another 70%, CLSA says after upgrade

Shares of Sterlite Technologies Ltd. rose as much as 5% on Monday, July 27, after brokerage CLSA upgraded the stock to "Outperform" from "Accumulate" and raised its target price to ₹950 from ₹655 following the company's record June-quarter earnings.

The revised price target from CLSA implies an upside potential of nearly 68% from Friday's closing price. Shares of Sterlite Tech have already rallied nearly 500% so far in 2026.

CLSA said Sterlite Technologies' June-quarter revenue of ₹1,910 crore was 20% above its estimates

, rising 33% sequentially and 87% year-on-year. The brokerage noted that the company's optical business, which contributes 96% of total revenue, grew 34% quarter-on-quarter and 92% year-on-year.

The brokerage added that EBITDA increased 97% sequentially to ₹385 crore, with margin expanding to 20%, aided by the US tariff reset.

Factoring in the company's recent ₹1,500 crore Qualified Institutional Placement (QIP) and the stronger-than-expected first-quarter performance, CLSA raised its earnings forecasts by 7% to 125% over financial year 2027 - 2029 and said the company now offers a potential to see its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) to grow at a Compounded Annual Growth Rate (CAGR) of 62% during this period.

The optimism follows Sterlite Technologies' strongest-ever quarterly performance. The company reported a nearly 20-fold increase in net profit to ₹197 crore for the June quarter, while revenue climbed 87% to a record ₹1,910 crore. EBITDA reached an all-time high of ₹397 crore, with margin expanding to 20.8%, the highest level in nearly 20 quarters.

During the quarter, the company completed a ₹1,500 crore QIP, becoming net debt-free, and secured a $1.11 billion multi-year contract to supply optical connectivity products for next-generation AI data centres.

The company was in the news earlier this month after it won a major European Patent dispute with Fujikura Ltd., after the European Patent Office (EPO) and Technical Board of Appeal revoked Fujikura's European Patent in total.

According to Bloomberg analyst recommendations, all four analysts covering the stock have a 'Buy' rating. The consensus target price stands at ₹674, implying an upside of about 20% from Friday's closing.

Shares of Sterlite Technologies rose as much as 5% during the session and were trading at ₹588.50, up 4.3%, as of 10:48 am. The stock has surged over 474% so far in 2026 and nearly 364% over the last 12 months.