Release Date: July 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sify Technologies Ltd (SIFY, Financial) reported a 14% increase in revenue for the quarter, reaching INR10,723 million compared to the same quarter last year.
- EBITDA increased by 18% year-over-year, totaling INR2,111 million, indicating strong operational performance.
- The company commissioned 8.6 megawatts of additional data center capacity, enhancing its infrastructure capabilities.
- Sify Technologies Ltd (SIFY) is strategically focusing on long-term value creation through disciplined investment and risk management.
- The company is capitalizing on India's digital transformation, with significant investments in cloud adoption, AI, and digital infrastructure.
Negative Points
- Sify Technologies Ltd (SIFY) reported a loss before tax of INR322 million and a loss after tax of INR388 million, reflecting financial challenges.
- Increased depreciation, interest costs, and manpower expenses impacted the company's profitability.
- The digital IT services segment experienced flat revenue growth and increased operational losses, indicating challenges in this business area.
- The company's EBITDA margin remains around 20%, with no immediate expansion expected despite the growth in data center operations.
- The transition to annuity-based revenue in the digital services segment has resulted in slower revenue growth compared to project-based revenues.
Q & A Highlights
Q: Can you remind us how much data center capacity has been commissioned and what are your expectations for the next 12 months?
A: M. P. Vijay Kumar, CFO, stated that two greenfield data center projects in Delhi and Chennai have gone live, each with a design capacity of 26 megawatts. The total operational capacity now stands at 138 megawatts. Two additional data centers in Mumbai, each with a design capacity of 52 megawatts, are under construction and expected to go live later this financial year.
Q: Can you explain the pay-per-use colocation AI model and the expected returns?
A: Raju Vegesna, CEO, explained that Sify offers a pay-per-use colocation model for GPUs, certified by NVIDIA, at their data centers in Mumbai, Chennai, and Noida. Customers can bring their own GPUs and use Sify's facilities on a per-use basis. This model is unique and has garnered global interest, although specific numbers are not yet available.
Q: When might we see more leverage in the business model given the current investments?
A: M. P. Vijay Kumar, CFO, indicated that while the network and data center businesses are performing well, the digital IT services segment is still in an investment phase. He expects to see results from these investments in 12 to 18 months, leading to improved leverage.
Q: What are the plans for the digital services business given its flat top line and increased losses?
A: M. P. Vijay Kumar, CFO, explained that the digital services business is transitioning from project-based to annuity-based revenues, which results in smaller but more consistent income streams. The focus is on building capabilities, with an expected turnaround in 12 to 18 months.
Q: Why are EBITDA margins not expanding despite the growth in data centers?
A: M. P. Vijay Kumar, CFO, noted that the data center business has high EBITDA margins of about 45%, while the network business is at 18%. The IT services segment is still developing. The company aims for gradual improvement in consolidated margins as the IT services business gains traction.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
