Sify Technologies Limited Q1 FY2026 earnings call

• India is entering a new generation of IT transformation with opportunities in digital infrastructure, cloud adoption, and automation. - The company remains committed to cost efficiency and fiscal discipline, with investments made for long-term value creation. - Commissioned 8.6 MW of additional data center capacity during the quarter. - Two greenfield data center projects in the National Capital Region, Delhi, and Chennai went live, each with a design capacity of 26 MW. - Mumbai greenfield data center projects, each with a design capacity of 52 MW, are under construction and set to go live later in the financial year.

For the first quarter of fiscal year 2026, Sify Technologies Limited's revenue was INR 10,723 million, a 14% increase compared to the same quarter last year. EBITDA was INR 2,111 million, an 18% increase year-over-year. The revenue split by segments was network services 41%, data center colocation services 37%, and digital IT services 22%. Loss before tax was INR 322 million, and loss after tax was INR 388 million. Capital expenditure during the quarter was INR 2,874 million. As of December 2024, the company had deployed about 9,473 contracted SD-WAN service points, and 8.6 megawatts of additional data center capacity was commissioned, with total operational capacity reaching 138 megawatts.

• The company expects to see losses shrinking and operating performance improving in the digital services business over the next 12 to 18 months. - There are two greenfield data center projects in Mumbai under construction, each with a design capacity of 52 MW, set to go live later in the financial year. - The company continues to evaluate various sources of raising capital for the digital services business, guided by the board.

• Forward-looking statements are subject to risks and uncertainties, including competitive developments, as listed in the company's SEC reports and public releases.

Q: Update on the data center capacity added this quarter and future expectations?

A: 8.6 MW of data center capacity was added in the quarter, taking total operational capacity to 138 MW. Two greenfield data center projects in Mumbai, each with a design capacity of 52 MW, are under construction and will go live later in the financial year.

Q: Explain the pay-per-use colocation AI model?

A: The company offers a per usage model for hosting GPUs in certified data centers (Mumbai, Chennai, Noida) which are NVIDIA-certified. It's a per hour, per demand, per monthly, or per year basis, and is getting interest globally.

Q: Plans for the digital services business?

A: Focus on moving to annuity revenues from project-based revenues. Losses are due to investment in people, with expectations of losses shrinking and operating performance improving over 12-18 months.

Q: EBITDA margin expectations?

A: Data center business has an EBITDA margin of close to 45%, network business has an EBITDA margin of about 18%, and the IT services business is a work in progress with expectations of improvement once offerings stabilize