Sify Technologies Limited Q4 FY2026 earnings call

Management Statement and Operational Highlights: - India's digital journey accelerates with Sify uniquely positioned to partner with enterprises in transformation. - Businesses deliver focused growth, investing in data centers, network/cloud interconnect ecosystem, and people. - Financials: Revenue INR 4,487 million (+13% y - y), EBITDA INR 9,871 million (+31% y - y), loss before tax INR 941 million, loss after tax INR 1366 million, capital expenditure INR 13,282 million. - Data center subsidiaries sold 129 MW capacity, contracted 81 MW for coming quarters. - Network services via 1,224 fiber routes (+8% y - y) and 10,340 SD van service points as of March 31, '26

Segment Performance: Network Services contributed 39% to revenue, with 12% revenue growth and 91% segment result increase. Data Center Services contributed 3% to revenue, with 23% revenue growth and 24% increase in data center colocation services segment results. Digital Services contributed 22% to revenue, with 2% revenue decrease and 67% decrease in segment results.

Guidance: - CapEx will be higher this year. - Data center revenue - generating capacity to double. - Network services to grow organically in low double - digits. - IT services to continue investing in AI - related capabilities

Risks: Certain statements are forward - looking and subject to risks and uncertainties, including competitive developments and other factors listed from time to time

Question and Answer: - Q: Could you just give us the numbers around what the existing design capacity for your data center businesses and how much operational capacity has been sold?

A: The total design capacity of the 14 facilities which are live is 188 - megawatt out of which 129 - megawatt of capacity is revenue generating at present. - Q: And then the 81 megawatts that you mentioned, that is contracted and in your backlog?

A: Yes, that is the backlog. That is for new facilities, which are currently under construction, which will go live in the early part of the second quarter, and will be delivered in a phased manner to the customer. - Q: And then in terms of CapEx, I guess it was -- I guess, $13 million this year, what is the guidance or what is your outlook for this year, about a similar level of CapEx? Or will it be increasing again this year?

A: Yes, the CapEx will be higher for this year, given that we are almost doubling our capacity, it will be significantly higher. - Q: And are you seeing any bottlenecks in terms of either energy availability or inputs like memory that might impact the pace of your rollout?

A: At present, we aren't seeing anything here. There's very good support from the union government as well as the state governments for the data center infrastructure creation in India. And in fact, as the Chairman mentioned in his remarks, the government has also gone forward with committing a 20 - year tax holiday for foreign cloud service providers who host their capacity in India for serving the global market. And there are a good number of customers who are in active conversation in this to avail this benefit. - Q: Just taking it ahead from Greg's question, I know that we kind of in the DRHP, we have given numbers on build capacity installed and operational which was 188, 127 and 111 as of FY '25 end. And -- so I understand that 188, is still INR 188. Can you just give us a sense as to how the other 2 numbers have changed, which are installed and operational?

A: Yes, the 127 meg, which is installed is at 140 and 111 is at 129 million. - Q: And when we say that 81 - megawatt is backlog, when you said early part of second quarter, by second quarter here, we mean the second financial year quarter, right?

A: Correct. - Q: So does it mean...

A: And will be delivered in a phased manner. - Q: And when we say that 81 - megawatt is backlog, when you said early part of second quarter, by second quarter here, we mean the second financial year quarter, right?

A: Correct. - Q: So does it mean...

A: And will be delivered in a phased manner. - Q: And when we talk about almost doubling of capacity this year, we are talking about doubling of the revenue - generating capacity.

A: No, I'm talking about doubling of the revenue - generating capacity. - Q: And just 1 last question. So given that there is so much happening, i.e., we study assembly good site also last month, and I noticed that we are also providing the opportunity of liquid cooling. So if I had to get a sense as to what kind of EBITDA per megawatt, how liquid cooling would versus the current scenario at least 1 can assume on the base basis that our EBITDA per megawatt would largely at least be what we are doing right now without liquid cooling? Or do we think that liquid cooling the EBITDA per megawatt might be a bit lower than what we are doing right now?

A: It could be a little higher, but I think there are too much of specifics. Maybe we can have a conversation separately because customer contracts have some unique elements the way they are constructed. But typically considering higher capital deployment, you tend to get a higher return. - Q: This is Srikanth here. I almost joined all of your earnings call. I have SP1 I couldn't follow the earlier conversation because I joined late. However, my questions are more specific to the India listing. One, given that it looks like you have all the approvals now, is there any deferment in the IPO because of this whole geopolitical situation across the globe. Two, is -- has the IPO size being decided, and there have been speculations somebody is quoting one number, somebody else is quoting another number? Those two would be my specific questions.

A: Okay. So let me take the latter one. The size is already communicated as part of the DRXP. It is INR 2,500 crores of primary and INR 1,200 crores of offer for sale, a partial exit from the existing growth capital partner, Kotak. So total INR 3,700, that is already part of the DRHP filed and approved. Second, as far as the deferment is concerned, there is no deferment per se, except that we are waiting for the guidance to the bankers on the timing of the actual issuance and listing. As management, we have done our road shows, approvals are all in place. So we'll get guided with the bankers for the next steps. - Q: And are those numbers, what does it translate to the enterprise value of Sify Infinity space?

A: That would be a little difficult to comment here. I think it depends on how the building process goes. And once that is done, as part of the updated DRHP would be visible. - Q: Sir, in the last call, if I remember correctly, we had said that we are working on 2 expansions, which were 77 megawatts and 52 megawatts, if I'm not wrong. Can you just guide us as to which are the locations where these 2 expansions are coming in? Are they both in Rabale or in Nord or other places? And we also mentioned that the 77 earlier was 52% and because of higher density, it was taken up to 77%. So is there any opportunity to take this 52 that we're talking about right now to 77 or 80 also?

A: Both of them are at Rabale, Prateek and the facility which have visited, you would have seen the construction right adjacent to the place where you had all the meetings and the facility visit. So that is the 77 - megawatt one, which we'll be delivering to the customer now. And write - opposite, you would have seen the other 2 towers, which are the 52 - megawatt and based on the customer engagement, it could -- the final usage of that could be higher than 52 - megawatt. But at this point in time, it's been designed for that, but it has the capacity to scale up for a higher capacity. Both of them are in Rabale part of the campus. - Q: And this I would mission or will be...

A: Yes. 52 - megawatt part of it will get commissioned this financial year and other part, the first quarter of next financial year. - Q: Sir, you're saying something.

A: Pratik, I would invite you once again to our campus, so that you can have a good sense of the progress which has happened in those 2 facilities, which are getting ready for delivery. - Q: Sir, am I audible?

A: Yes, it's good, yes. - Q: Can you give some color for all 3 businesses going into next year? Like obviously, you were expecting the last quarter improvement in data services and even improvement in network business. So how should we think about all 3 businesses from a revenue growth and margin perspective?

A: Yes. Typically, it's forward - looking statements, Sagan we refrain from that. But I can just give you a 30,000 feet view. Our data center business growth numbers have already communicated as part of our communication as against 12 - megawatt of revenue - generating capacity. We have contracted for delivery this year. already 81 - megawatt of capacity is there. And as far as the network services business is concerned, it's organically growing at double - digit numbers, of course, low double - digit numbers. And that growth should happen along with the digital infrastructure consumption, which we are witnessing in the country. On the IT services business, we continue to stay focused on investing in people to build capabilities for the AI kind of infrastructure services. So a lot of work is happening over the last 18 to 24 months. And as and when the consumption picks up in the domestic market, will be ready for delivering those services. So that investment will continue to be there for some time, given the fact that we are confident about its long - term prospects. - Q: And on the margin side, if you could give like you were expecting breakeven of data services business. So how should we...

A: Yes. Yes, I'll not be able to give a specific quarter. There is work happening to get to breakeven. But I'll not be able to give a specific quarter when we will achieve that. - Q: Sure. But let's over 2 years, do you expect it to turn around or to say how should we so look at the progress of this business then. Would it be quarterly...

A: Yes, you should see quarterly improvement going forward. But I think 2 years is a very reasonable period to see that we get to breakeven. It's a very reasonable period. - Q: And whatever is happening in Middle East. So do you think some of the demand will shift to India? And have you started seeing it in interaction with clients there in...

A: Yes. We are seeing that happen for our data center collection business and consequently, to our network business as well