Sify Technologies Limited (SIFY) Q3 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights significant strategic initiatives, such as data center expansion and AI integration, which are positive indicators. Despite some concerns about flat network business and margin dips, the company's alignment with India's digital transformation and strategic investments suggest future growth potential. The Q&A section reveals management's optimism about infrastructure expansion and revenue generation, offsetting concerns. Overall, the positive aspects, including a focus on AI and a strategic shareholder return plan, outweigh the negatives, suggesting a positive stock price movement.
Key Financial Performance
Revenue Revenue was INR 11,596 million, an increase of 11% over the same quarter last year. The increase is attributed to growth across network services, data center co-location services, and digital services.
EBITDA EBITDA was INR 2,470 million, an increase of 29% over the same quarter last year. The growth is due to improved operational efficiencies and higher revenue.
Loss before tax Loss before tax was INR 257 million. No specific reasons for the loss were mentioned.
Loss after tax Loss after tax was INR 329 million. No specific reasons for the loss were mentioned.
Capital expenditures Capital expenditures during the quarter were INR 3,452 million. This reflects investments in data centers, networks, and digital platforms.
Cash balance Cash balance at the end of the quarter, 31st December 2025, was INR 3,627 million. No specific reasons for the cash balance were mentioned.
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Operating Highlights
Hyperscaler data centers: Sify is investing in hyperscaler data centers to align with the growing demand for secure, high-performance, and governance-driven digital infrastructure.
AI-driven platforms: Sify is focusing on AI-driven platforms to support enterprise transformation in India.
India's IT growth: India is becoming a central pillar in the global technology ecosystem, driven by digital adoption, cloud, and AI-led innovations.
Revenue split: Network services contributed 37%, data center co-location services 40%, and digital services 23% to the revenue this quarter.
Data center co-location capacity: 9.1 megawatts of data center co-location capacity was sold this quarter.
Network expansion: Sify Network Services now operates via 1,214 fiber nodes, a 9% increase year-over-year, and has deployed 9,695 SD-WAN service points across India.
Capital allocation: Sify is focusing on disciplined capital allocation across data centers, networks, and digital platforms to ensure long-term value creation.
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Risk or Challenges
Competitive Developments: The company acknowledges competitive developments as a risk factor that could materially impact results, as mentioned in the forward-looking statements disclaimer.
Fiscal Discipline and Investments: While the company is exercising fiscal discipline, it is making significant investments in data centers, networks, and digital platforms. This could pose financial risks if returns on these investments are not realized as expected.
Loss Before Tax: The company reported a loss before tax of INR 257 million and after tax of INR 329 million for the quarter, indicating financial challenges that could impact operations and strategic objectives.
Capital Expenditures: Capital expenditures during the quarter were INR 3,452 million, which is a significant outlay. This could strain financial resources if not managed effectively.
Economic and Regulatory Risks: The forward-looking statements mention risks related to economic uncertainties and regulatory hurdles, which could adversely impact the company's performance.
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Guidance & Outlook
India's growth and digital adoption: India is positioned as a central pillar in the global technology ecosystem, with strong economic fundamentals, policy continuity, and accelerating digital adoption. The focus on AI, cloud, and data-driven platforms is expected to drive demand for secure, high-performance digital infrastructure.
Sify's strategic investments: Sify is investing in hyperscaler data centers, resilient networks, and AI-driven platforms to align with the growing demand for digital infrastructure and enterprise transformation in India.
Capital allocation and fiscal discipline: The company is focusing on disciplined capital allocation across data centers, networks, and digital platforms to ensure long-term value creation and future readiness.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What is the timing and major milestones for the IPO of Infinit Spaces?
A:The draft prospectus was filed in October 2025, and approval from securities regulators is expected within 3-4 months. SEBI's approval is anticipated this month, after which the draft prospectus will be updated with financials as of December 31. The exact timing for listing will be guided by bankers.
Q:What is the total design capacity and how much of it has been sold?
A:The total design capacity is 188 megawatts, with 130 megawatts ready for service. Out of this, 127 megawatts have been sold.
Q:What is the roadmap for new data center construction over the next 6-12 months?
A:Two facilities in the Rabale data center campus will go live this calendar year, and two greenfield projects are under construction. One will be delivered mid-year, and the other by mid-next year.
Q:What is the total capacity of the four new facilities?
A:The aggregate capacity of the four facilities is about 125 megawatts, but it could increase due to AI workloads.
Q:When is the digital services segment expected to break even or become profitable?
A:The digital services segment is expected to break even in the latter part of fiscal year 2026-2027, with profitability depending on the scaling of new service offerings.
Q:How much of the 12.16 megawatt capacity sold since June 2025 is revenue-generating?
A:About 4 megawatts are revenue-generating, as most orders came in December and will generate revenue in the coming quarter.
Q:What is the average contract tenure and return on capital employed per megawatt?
A:Hyperscale contracts have a tenure of 7 years with two renewal terms, and enterprise contracts have a tenure of 5 years with similar renewals. The return on capital employed for fully populated facilities is in the high teens.
Q:How will the IPO proceeds for Sify Infinit be used?
A:The primary portion will go towards data center expansion, with some funds allocated for retiring existing loans and replacing them with lower-cost, longer-term infrastructure debt.
Q:How is Sify Infinit structurally separated?
A:Sify Infinit Spaces is a 100% subsidiary of Sify Technologies Limited, with separate financial statements available on the company website, IPO documents, and MCA portal. Quarterly results are updated on the Bombay Stock Exchange portal.
Q:Will existing Sify shareholders get any priority in the new IPO?
A:Existing ADR shareholders will not get priority due to legal frameworks. However, U.S. shareholders with a non-resident account in India can participate through their NRE account.
Q:What is the useful life of power equipment and its impact on depreciation?
A:The useful life of power equipment is around 15-20 years, but depreciation is calculated over 8-10 years to align with the company's pricing model for capital recovery.
Q:What caused the small dip in data center business margins this quarter?
A:The dip was due to customers ramping up IT power consumption and new large capacities coming live, which initially incur operating expenses before achieving operating leverage.
Q:What is the time difference between installed and design capacity for data centers?
A:In Mumbai, design capacity gets fully populated in about 15 months, while in other cities, it takes 3-4 years unless a hyperscale customer accelerates the process.
Q:What are the related party transactions in the DRHP?
A:They include revenue and expense transfers for contracts signed before the data center business was carved out, lease agreements for data center assets, and go-to-market costs apportioned to the data center entity.
Q:Why was the Network business flat this quarter?
A:The flat performance was due to price corrections for existing customers and a shift from MPLS to Internet, which reduces price realization but maintains margins.
Q:What is the strategic importance of the Visakhapatnam cable landing station?
A:It serves as a strategic investment to carry traffic from subsea cable systems into data centers across the country, with minimal capital investment by Sify.
Q:What is the incremental cost for liquid cooling systems in data centers?
A:The incremental cost is approximately $1.3 million per megawatt, with costs varying by customer contract.
Q:What is the expected ramp-up for the digital services business?
A:The focus will be on cloud, network, and security managed services, with a calibrated approach to repurpose resources for productive services over the next 3-4 quarters.
Q:How will equity stability be managed given rising CapEx and debt?
A:The IPO will fund growth for the next 2-3 years, with future capital requirements met through rights and QIPs.
Q:What is the total issue size and primary capital raised in the IPO?
A:The total issue size is INR 3,700 crores, with INR 2,500 crores as primary capital and INR 1,200 crores from an offer for sale by existing capital partners.
Q:Are all four new facilities in Rabale greenfield projects?
A:Yes, all four facilities are greenfield projects located in the Rabale campus.
Q:What is the design capacity of the Andhra Edge facility?
A:The initial design is for 5 megawatts, with a land allotment of 50 acres for future capacity additions.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct answer regarding the expected profitability of AI contracts compared to cloud contracts, stating it is too early to determine if returns will be higher.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI innovation
AI platform
Chairman discipline
Communication ESG
Digital service
ESG welcome
FY Instructions
Head Communication
Head Investor
INR increase
India Executive
India phase
India pillar
India story
Krishna Head
Mr Chairman
Network
Relations Technologies
Technologies result
adoption India
allocation
center network
cloud
enterprise
factor
focus
highlight
infrastructure
investment
list
point
risk uncertainty
service center
statement
tax INR
term
SIFY Transcript
Sify Technologies Limited (SIFY) Q3 2026 Earnings Call Transcript
Positive1-13
The earnings call highlights significant strategic initiatives, such as data center expansion and AI integration, which are positive indicators. Despite some concerns about flat network business and margin dips, the company's alignment with India's digital transformation and strategic investments suggest future growth potential. The Q&A section reveals management's optimism about infrastructure expansion and revenue generation, offsetting concerns. Overall, the positive aspects, including a focus on AI and a strategic shareholder return plan, outweigh the negatives, suggesting a positive stock price movement.
Sify Technologies Limited (SIFY) Q2 2026 Earnings Call Transcript
Positive10-27
The earnings call highlights strong developments in IT transformation in India, data center expansion, and AI workloads, all of which are positive indicators. The Q&A reveals optimism about future growth in AI and data center services, despite some structural margin declines. The planned IPO of Infinite Spaces and expected high IRRs further support a positive sentiment. Although some responses were unclear, the overall outlook is optimistic with potential for stock price appreciation.
Sify Technologies Limited (SIFY) Q1 2026 Earnings Call Transcript
Unknown7-18
The earnings call showed positive revenue and EBITDA growth, and new data center operations began contributing to revenue. However, the company reported losses before and after tax due to strategic investments. The Q&A highlighted uncertainties in the timeline for achieving improved margins and the lack of specific details on new projects. Despite optimistic projections for future growth, the lack of immediate profitability and detailed guidance tempers the overall sentiment, suggesting a neutral outlook for the stock price movement.
Sify Technologies Limited (SIFY) Q4 2024 Earnings Call Transcript
Unknown4-21
The earnings call presents a mixed picture: while there's revenue and EBITDA growth, the company faces a loss before and after tax. The lack of a share buyback or dividend program adds to the neutral sentiment. The Q&A highlights demand for data center services, but management's unclear responses on CapEx and capacity raise concerns. Competitive pressures and economic uncertainties also weigh on the outlook. Overall, the financial performance is solid, but risks and lack of clarity on key aspects temper expectations, leading to a neutral stock price movement prediction.
SIFY Report
Frequently Asked Questions
Where does this earnings call transcript come from?
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