Release Date: April 21, 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 12% increase in revenue for the year, reaching INR39,886 million.
- EBITDA also increased by 12% over the previous year, totaling INR7,562 million.
- The company has expanded its network infrastructure with a 10% increase in fiber nodes across India.
- Two new data center facilities have gone live in Delhi and Chennai, with additional capacity under construction in Mumbai.
- Demand for data center colocation services in India continues to exceed supply, driven by cloud consumption and hyperscaler expansion.
Negative Points
- Sify Technologies Ltd (SIFY) reported a loss before tax of INR286 million and a loss after tax of INR785 million.
- Substantial capital expenditure of INR12,745 million was incurred, impacting financial results.
- There was a substantial increase in expenses due to new capacities leased for future business requirements.
- Operating leverage is still developing, with only marginal improvements in data center service margins expected.
- The demand for data center services is primarily driven by international hyperscalers, with Indian enterprise demand still in early stages.
Q & A Highlights
Q: What drove the decline in network services this quarter?
A: M P Vijay Kumar, Executive Director & Group CFO, explained that there was no decline in revenue. However, there were substantial expenses due to new capacities leased for future business requirements.
Q: Can you discuss the dynamics of data center services and the roadmap for fiscal '26?
A: M P Vijay Kumar noted a secular trend in recurring revenues with some one-time revenues in select quarters. Two new greenfield facilities in Delhi and Chennai have gone live, and new capacities in Mumbai are under construction, expected to go live in the next 12 to 18 months.
Q: What is the current design capacity of your data centers, and what is the incremental capacity from new facilities?
A: The current operational design capacity is about 130 megawatts. The two new facilities have a design capacity of 130 megawatts each, with Phase 1 providing 26 megawatts each.
Q: How do you see the demand dynamics for data center colocation services in India?
A: M P Vijay Kumar stated that demand continues to exceed supply, driven by cloud consumption by Indian enterprises and hyperscalers. AI-led demand is in early stages, with active conversations for future needs.
Q: What are the expectations for operating leverage as revenue from infrastructure investments scales?
A: M P Vijay Kumar indicated positive operating leverage for network and data center infrastructure businesses. Margins in data center services may increase slightly, while network services have potential for substantial margin increases with higher capacity utilization.
Q: Is the demand for data centers more likely to be driven by Indian enterprises or international hyperscalers?
A: In the short term, demand is expected to be driven by international hyperscalers. However, Indian enterprises are increasingly engaging in setting up private and hybrid clouds, which may drive demand in the medium to long term.
Q: Has the demand from international hyperscalers broadened or remained the same?
A: The demand remains generally the same, with the same group of international hyperscalers driving demand.
Q: How are the construction timelines and availability of resources for data centers in India?
A: M P Vijay Kumar mentioned that construction timelines have improved post-COVID, with stable availability of resources like land, power, and contractors. The pricing environment remains stable.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
