Sify (NASDAQ: SIFY) reports Consolidated Financial Results for Q1 FY 2024-25
Sify Technologies (NASDAQ: SIFY) reported its Q1 FY 2024-25 financial results, showing mixed performance. Revenue increased 10% year-over-year to INR 9,421 Million, while EBITDA grew 3% to INR 1,784 Million. However, the company reported a loss after tax of INR 105 Million.
Key highlights include:
- CAPEX of INR 2,656 Million
- Commissioned 6.5 MW data center capacity in Mumbai
- Revenue split: Data Center colocation services 36%, Digital services 23%, Network services 41%
- 1055 fiber nodes across India, up 16% YoY
- 9415 SDWAN service points deployed
Management remains optimistic about India's growth prospects and Sify's position to capitalize on digital transformation opportunities.
- Revenue increased 10% year-over-year to INR 9,421 Million
- EBITDA grew 3% to INR 1,784 Million
- Commissioned 6.5 MW data center capacity in Mumbai
- 16% increase in fiber nodes to 1055 across India
- Secured multiple new contracts across Network, Data Center, and Digital services
- Reported a loss after tax of INR 105 Million
- Loss before tax of INR 46 Million
- Digital services segment reported a loss of INR 160 Million
Insights
The company's revenue of INR 9,421 million reflects a 10% year-over-year growth, which is a positive sign of business expansion. However, the EBITDA margin increased only 3%, suggesting rising operational costs that dampen profits. More concerning is the INR 105 million loss for the period, which indicates that despite revenue growth, the company is struggling to maintain profitability. Furthermore, the significant CAPEX of INR 2,656 million shows a commitment to future growth but could impact short-term liquidity.
These mixed signals—positive revenue growth, but increasing losses—make it essential for investors to watch how the company manages its costs and realizes returns on its investments. The recurring losses could either indicate a transitional phase or long-term operational inefficiencies.
From a market perspective, Sify's increasing investments in data centers and network services are well-aligned with the Indian market's push towards digital transformation. The commissioning of 6.5 MW capacity in Mumbai and the increase in fiber nodes by 16% are significant steps towards enhancing infrastructure capabilities. Additionally, the diversified clientele, ranging from IT majors and banks to government bodies, shows strong market demand for their services.
However, despite the promising market potential, the loss reported post-tax suggests that these investments are yet to yield substantial financial returns. This is a critical aspect that retail investors should consider—while market positioning looks promising, the financial impact of these expansions needs close monitoring.
Sify's emphasis on enhancing its data center capabilities and expanding its SDWAN services is important in a technology-driven economy. The increasing focus on managed services like DRaaS, SaaS and security operations centers (SOC) indicates Sify's alignment with current IT trends where enterprises prioritize security and data management.
The strategic shift towards supporting digital transformation initiatives is commendable, as it places Sify at the heart of India's IT infrastructure growth. However, the tech advancements must be matched with efficient cost management to ensure these innovations translate into financial gains, which is currently a gap as indicated by the quarterly loss.
Revenues of INR 9,421 Million. EBITDA of INR 1,784 Million. Loss for the period INR 105 Million.
CHENNAI, India, July 19, 2024 (GLOBE NEWSWIRE) --
EARNING CALLS DETAILS
July 19, 2024| 8:30 AM ET
Participant Dial in:
To join: +1-888-506-0062 (Toll Free in the U.S. or Canada) or +1-973-528-0011 (International) | Access Code: 265815
On the call: Mr. Raju Vegesna, Chairman of the Board, Mr. M P Vijay Kumar, Executive Director & Group CFO and Mr. Kamal Nath, Chief Executive Officer
Live webcast: https://www.webcaster4.com/Webcast/Page/2184/50888
Archives: +1-877-481-4010 (Toll Free in the U.S. or Canada) or +1-919-882-2331 (International). On prompt, please enter passcode 50888. Replay is available until July 26, 2024.
---------------------------------------------------------------------------------------
HIGHLIGHTS
- Revenue was INR 9,421 Million, an increase of
10% over the same quarter last year. - EBITDA was INR 1,784 Million, an increase of
3% over the same quarter last year. - Loss before tax was INR 46 Million. Loss after tax was INR 105 Million.
- CAPEX during the quarter was INR 2,656 Million.
MANAGEMENT COMMENTARY
Mr. Raju Vegesna, Chairman, said, “India is currently in a remarkable phase of growth. The combination of pro-industry regulations, a supportive investment environment and a wealth of skilled talent positions our nation as a key destination for international businesses. This confidence is driving investments and building partnerships that benefit both enterprises and the broader economy.
The advancement in regulatory and taxation norms should help accelerate investment in the network and data center landscape and enhance India’s status as a pivotal interconnect hub between Asia and the Middle East. Our robust infrastructure and comprehensive services portfolio uniquely position Sify to seize these opportunities. As enterprises and government entities advance their digital transformation and automation initiatives, Sify stands ready to support them with our innovative digital tools and services.”
Mr. Kamal Nath, CEO, said, “As businesses embark on digital transformation, they are reconfiguring their IT frameworks to incorporate multiple transformative solutions. All of them with the common agenda of enhancing user satisfaction, ensuring operational resilience and protecting digital assets.
Our significant capital allocations and extensive range of offerings are designed to effectively meet these ambitions. Our capability to provide innovative outcomes through our triad of infrastructure and managed services uniquely positions us to support them throughout their digital transformation.”
Mr. M P Vijay Kumar, ED & Group CFO, said, “The International Accounting Standard Board’s (“IASB”) recently issued Accounting Standard IFRS 18 (Presentation and Disclosure in Financial Statements) replacing IAS 1 (Presentation of Financial Statements). The new structure for the profit and loss statement requires (i) the classification of income and expenses into three new categories - operating, investing and financing, and (ii) the presentation of subtotals for operating profit or loss and profit or loss before financing and income taxes.
Although the IASB set an effective date as January 1, 2027, the Company will begin adhering to IFRS 18 beginning with its unaudited consolidated financial statements for the quarter ended June 30, 2024. All prior periods presented herein have been presented in accordance with the new structure. There is no change in total income or net profit.
We will continue to invest in expanding our network, both fiber in the metros and terrestrial long distance, data center capacity and also strengthen our Digital services team by adding people with the right skill sets and investing more in our Learning and Development initiatives. Fiscal discipline will continue to be remain central to our focus and strategy. The cash balance at the end of the quarter was INR 6,471 Million.”
BUSINESS HIGHLIGHTS
- The Revenue split between the businesses for the quarter was Data Center colocation services
36% , Digital services23% and Network services41% . - During the quarter, Sify commissioned 6.5 MW capacity in Mumbai.
- As of June 30,2024, Sify provides services through 1055 fiber nodes across the country, a
16% increase over same quarter last year. - The network connectivity service has now deployed 9415 SDWAN service points across the country.
CUSTOMER ENGAGEMENTS
Among the most prominent new contracts during the quarter were the following:
Network Services
- The cloud platform of a global IT major contracted for interconnect at one of their major locations.
- The largest stock exchange, the regulatory body for the securities market, and a national insurance major contracted Sify for a MPLS Network build.
- The largest stock exchange also signed up for WAN across their backbone network.
- The largest Private bank contracted for managed and secure SDWAN service.
Data Center Services
- A global OTT player contracted for major Edge Data Center location in a non-metro location
- The country’s largest bank signed a multi-year deal for capacity at Sify’s Data Center.
- A Private bank chose to locate their Near Disaster Recovery (NDR) in one of Sify Data Center.
- Two Private banks contracted to expand their capacity at different Sify Data Centers.
- An IT major signed up to migrate from their on-premise Data Center to Sify’s Data Center.
Digital services
- Sify was contracted by the highest judicial body in the country for a multi-year Data Center infrastructure build and related managed services.
- A large private bank contracted for Network Managed services for both their Data Center and Branch networks.
- A digital enablement major opted to move their online banking application to Sify’s Cloud platform.
- An IT player, a chemicals manufacturer, an NBFC and a training development organisation contracted to migrate from their on-premise Data Center to Sify’s Cloud platform.
- These players also opted for managed services like DRaaS and SaaS.
- A Scheduled bank and a housing finance major contracted for green field Cloud implementation.
- A major steel producer and a retail MNC contracted for multi-year managed services.
- A logistics player signed up for managed security services while a state power distribution company and a state co-operative bank contracted Sify to set up Security Operations Center (SOC) at their premises.
- The education and training bodies of a State government and banking regulator signed up for online assessments, while a retail and power major signed up for Sify’s Cloud -based supply chain solution.
FINANCIAL HIGHLIGHTS
| Unaudited Consolidated Income Statement as per IFRS | ||||||||
| (In INR millions) | ||||||||
| Quarter ended | Quarter ended | Quarter ended | Year ended | |||||
| Description | June 2024 | June 2023 | March 2024 | March 2024 | ||||
| (Audited) | ||||||||
| Revenue | 9,421 | 8,547 | 9,637 | 35,634 | ||||
| Cost of Sales | (5,961 | ) | (5,371 | ) | (6,108 | ) | (22,378 | ) |
| Gross Profit | 3,460 | 3,176 | 3,529 | 13,256 | ||||
| Other Operating Income | 88 | 42 | 182 | 379 | ||||
| Selling, General and Administrative Expenses | (1,676 | ) | (1,421 | ) | (1,700 | ) | (6,462 | ) |
| Depreciation and Amortisation expense | (1,306 | ) | (1,118 | ) | (1,259 | ) | (4,773 | ) |
| Operating Profit | 566 | 679 | 752 | 2,400 | ||||
| Investment Income | 58 | 9 | 25 | 156 | ||||
| Profit before financing and income taxes | 624 | 688 | 777 | 2,556 | ||||
| Interest expenses on borrowings and lease liabilities | (670 | ) | (569 | ) | (641 | ) | (2,322 | ) |
| Interest expenses on pension liabilities | - | - | - | (2 | ) | |||
| Profit/(Loss) before income taxes | (46 | ) | 119 | 136 | 232 | |||
| Income Tax Expense | (59 | ) | (54 | ) | (98 | ) | (183 | ) |
| Profit/(Loss) for the period | (105 | ) | 65 | 38 | 49 | |||
| Reconciliation with Management-defined Performance Measures* | ||||||||
| Operating Profit | 566 | 679 | 752 | 2,400 | ||||
| Add: | ||||||||
| Depreciation and Amortisation expense | 1,306 | 1,118 | 1,259 | 4,773 | ||||
| Less: | ||||||||
| Interest expenses on pension liabilities | - | - | - | (2 | ) | |||
| Other Income (including exchange gain/loss) | (88 | ) | (73 | ) | (187 | ) | (415 | ) |
| EBITDA | 1,784 | 1,724 | 1,824 | 6,756 | ||||
*Management-defined Performance Measures (MPMs)
Sify uses Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) as the management-defined performance measure in its public communications. This measure is not specified by IFRS Accounting Standards and therefore might not be comparable to apparently similar measures used by other entities.
Segment Reporting:
(In INR millions)
| Q1 2024-25 | Q1 2023-24 | |||||||||||||||
| Particulars | Network Services | Data Center Colocation Services | Digital Services | Total | Network Services | Data Center Colocation Services | Digital Services | Total | ||||||||
| (A) | (B) | ( C) | (D)= (A)+(B)+(C) | (A) | (B) | ( C) | (D)= (A)+(B)+(C) | |||||||||
| External customers Revenue | 3,865 | 3,360 | 2,196 | 9,421 | 3,427 | 2,704 | 2,416 | 8,547 | ||||||||
| Intersegment Revenue | 22 | 55 | 77 | 22 | 56 | 78 | ||||||||||
| Operating Expense | (3,261 | ) | (1,966 | ) | (2,397 | ) | (7,624 | ) | (2,872 | ) | (1,546 | ) | (2,404 | ) | (6,822 | ) |
| Intersegment Expense | (63 | ) | (14 | ) | (77 | ) | (63 | ) | (14 | ) | (77 | ) | ||||
| Segment Result | 541 | 1,416 | (160 | ) | 1,797 | 492 | 1,180 | 54 | 1,726 | |||||||
| Unallocated Expense: | ||||||||||||||||
| Support Service Unit Costs | (44 | ) | (47 | ) | ||||||||||||
| Depreciation & Amortisation | (1,306 | ) | (1,118 | ) | ||||||||||||
| Other income / (expense), net | 24 | 15 | ||||||||||||||
| Finance Income | 122 | 25 | ||||||||||||||
| Finance Expense | (639 | ) | (482 | ) | ||||||||||||
| Profit / (loss) before tax | (46 | ) | 119 | |||||||||||||
| Income taxes (expense) / benefit | (59 | ) | (54 | ) | ||||||||||||
| Profit / (loss) for the period | (105 | ) | 65 | |||||||||||||
Highlights:
| (In INR millions) | 30.06.2024 | 30.06.2023 | 31.03.2024 |
| EQUITY | 17,369 | 15,210 | 15,230 |
| BORROWINGS | |||
| Long term | 16,717 | 14,897 | 17,608 |
| Short term | 7,218 | 6,581 | 6,937 |
About Sify Technologies
A Fortune India 500 company, Sify Technologies is India’s most comprehensive ICT service & solution provider. With Cloud at the core of our solutions portfolio, Sify is focussed on the changing ICT requirements of the emerging Digital economy and the resultant demands from large, mid and small-sized businesses.
Sify’s infrastructure comprising state-of-the-art Data Centers, the largest MPLS network, partnership with global technology majors and deep expertise in business transformation solutions modelled on the cloud, make it the first choice of start-ups, SMEs and even large Enterprises on the verge of a revamp.
More than 10000 businesses across multiple verticals have taken advantage of our unassailable trinity of Data Centers, Networks and Digital services and conduct their business seamlessly from more than 1700 cities in India. Internationally, Sify has presence across North America, the United Kingdom and Singapore.
Sify, www.sify.com, Sify Technologies and www.sifytechnologies.com are registered trademarks of Sify Technologies Limited.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements contained herein are subject to risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Sify undertakes no duty to update any forward-looking statements.
For a discussion of the risks associated with Sify’s business, please see the discussion under the caption “Risk Factors” in the company’s Annual Report on Form 20-F for the year ended March 31, 2024, which has been filed with the United States Securities and Exchange Commission and is available by accessing the database maintained by the SEC at www.sec.gov, and Sify’s other reports filed with the SEC.
For further information, please contact:
| Sify Technologies Limited Mr. Praveen Krishna Investor Relations & Public Relations +91 9840926523 praveen.krishna@sifycorp.com | 20:20 Media Nikhila Kesavan +91 9840124036 nikhila.kesavan@2020msl.com | Weber Shandwick Lucia Domville +1-212 546-8260 LDomville@webershandwick.com |
FAQ
What was Sify's revenue for Q1 FY 2024-25?
Did Sify report a profit or loss in Q1 FY 2024-25?
How much data center capacity did Sify commission in Q1 FY 2024-25?
What was the revenue split between Sify's business segments in Q1 FY 2024-25?
