Sify Technologies FY2026 Earnings Call - Data center surge: 81 MW contracted, DRHP for Sify Infinit Spaces cleared

Operator: Good day, ladies and gentlemen, and welcome to the Sify Technologies financial results for full year 2025-2026. At this time, all participants are on a listen-only mode, and the floor will be open for questions and comments following the presentation. If anyone should require operator assistance during the call, please press star zero on your telephone keypad. Please note, this call is being recorded. I will now turn the conference over to your host, Mr. Praveen Krishna, Head of Investor Relations. Praveen, the floor is yours.

Praveen Krishna, Head of Investor Relations, Sify Technologies Limited: Thank you, Ollie. I would like to extend a warm welcome to all our participants on behalf of Sify Technologies Limited. I’m joined on the call today by my Chairman, Mr. Raju Vegesna, and my Executive Director and Group CFO, Mr. M.P. Vijay Kumar. Following our comments on the release, there’ll be an opportunity for questions. If you do not have a copy of our press release, please call Lury Group, our IR agency, at 1-646-824-2856, and we’ll have one sent to you. Alternatively, you may obtain a copy of the release at the investor information section on the company’s corporate website at sifytechnologies.com/investors. A replay of today’s call may be accessed by dialing on the number provided in the press release or by accessing the webcast in the investor information section of the Sify corporate website.

Some of the financial measures referred to during this call and in the earnings release may include non-GAAP measures. Sify’s results for the year are according to the International Financial Reporting Standards, or IFRS, and will differ somewhat from the GAAP announcements made in previous years. A presentation of the most directly comparable financial measures calculated and presented in accordance with GAAP and a reconciliation of such non-GAAP measures, and of the differences between such non-GAAP measures and the most comparable financial measures will be made available on Sify’s website. Before we continue, I would like to point out that certain statements contained in the earnings release and on this conference call are forward-looking statements rather than historical facts, and are subject to risks and uncertainties that could cause actual results to differ materially from those described.

With respect to such forward-looking statements, the company seeks protection afforded by the Private Securities Litigation Reform Act of 1995. These risks include a variety of factors, including competitive developments and risk factors listed from time to time. Those lists are intended to identify certain principal factors that could cause actual results to differ materially from those described in the forward-looking statements but are not intended to represent a complete list of all risks and uncertainties inherent to the company. I would now like to introduce Mr. Raju Vegesna, my Chairman.

Raju Vegesna, Chairman, Sify Technologies Limited: Thank you, Praveen. Good morning, everyone. Thank you for joining us on the call. India’s digital journey continues to accelerate with renewed clarity and purpose. The convergence of resilient infrastructure, progressive policy framework, and an increasingly innovation-driven enterprise ecosystem is positioning India as a cornerstone of the global digital space. Enterprises today are moving beyond adoption to technology optimization. This evolution is not only strengthening the businesses, but also enabling inclusive growth, expanding opportunities across sectors and communities. The recent Union Budget has recommended a tax holiday for foreign cloud players who utilize Indian data centers to serve global customers. This is expected to add to the tailwinds for a domestic data center growth. With sustained investment in digital infrastructure and such strong regulatory vision, India is reinforcing its credentials as a technology hub.

In this environment, Sify is uniquely positioned to partner with enterprises in their next phase of transformation, delivering integrated solutions that power growth and resilience. I remain confident that our strategic direction and combined with India’s enduring strengths will enable us to play a pivotal role in shaping a future-ready digital ecosystem. Let me now bring in our Executive Director and Group CFO, Mr. M.P. Vijay Kumar, to explain both the business and financial highlights for the year. Vijay Kumar.

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Thank you, Chairman. Our businesses continue to deliver focused growth with each unit capitalizing on its distinct market opportunities, attracting strategic investments, and building meaningful partnerships. Our investment philosophy remains consistent and forward-looking, expanding our data center footprint into new and emerging locations for long-term growth, augmenting capacity at existing facilities to address immediate demand, and further strengthening our network and cloud interconnect ecosystem. In parallel, and more importantly, we continue to invest in our people, equipping them with the right skills, tools, and processes to drive innovation, efficiency, and customer success. All these initiatives are being executed with focus on cost competitiveness, cash flow optimization, and fiscal discipline, ensuring that we maintain a strong financial foundation, which supports our growth ambitions.

In accordance with the Amendment Agreement to the Debenture Subscription Agreement with Kotak, the additional coupon payable on Compulsory Convertible Debenture, pursuant to the conversion at equity in February 2026, is recognized as expense in the statement of income. We have received the final observations from SEBI on our draft red herring prospectus for our data center subsidiary, Sify Infinit Spaces Limited, and we will time the issue and listing to a conducive market environment based on bankers’ guidance. The cash balance as at end of the year was INR 507.1 million. Let me now expand on the business highlights for the year. The revenue split between the businesses for the year was Network Services 39%, Data Center Services 39.5%, Digital Services 22%. Segment revenue for the year increased 12% in Network Services, 23% in Data Center Services, and decreased marginally 2% in Digital Services.

Segment results for the year have increased by 91% in Network Services, 24% in Data Center Colocation Services, and decreased 67% for Digital Services. The data center subsidiary sold 17 MW of data center capacity in the year. Cumulatively sold capacity stands at 129 MW, and during the quarter, the data center business has contracted an additional 81 MW to be delivered in the coming quarters this financial year, 2026-2027. As of March 26th, Sify provide Network Services via 1,224 fiber nodes, an 8% increase over the same quarter last year. As of March 31st, 2026, Sify deployed 10,340 SD-WAN service points across the country. A detailed list of our key wins is recorded in our press release, now live on our website. Let me briefly sum up the financial performance for the year. Revenue was INR 44,877 million, an increase of 13% over last year.

EBITDA was INR 9,871 million, an increase of 31% over last year. Loss before tax was INR 941 million, and loss after tax was INR 1,366 million. Capital expenditure during the year was INR 13,282 million. I will now hand over to our Chairman for his closing remarks. Chairman?

Raju Vegesna, Chairman, Sify Technologies Limited: Thank you, M.P. Vijay Kumar. Our businesses are mutually reinforcing pillars that together they create a resilient end-to-end digital ecosystem. Strong connectivity enables scalable data infrastructure, while our data centers power secure high-performance platforms for advanced digital solutions. In turn, our digital services unlock value for enterprises and consumers, driving demand across the entire stack. As India accelerates its digital transformation, this integrated approach positions us as a trusted partner at scale. It will also enhance our global credibility, building lasting image equity while strengthening our brand among investors, partners, and stakeholders alike. Thank you for joining us on this call. I will now hand over to the Operator for questions. Operator?

Operator: Thank you, sir. Ladies and gentlemen, at this time, we will be conducting our question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue, and you may press star two if you wish to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question is coming from Greg Burns with Sidoti & Company. Your line is live.

Greg Burns, Analyst, Sidoti & Company: Good morning. Could you just give us the numbers around what the existing design capacity for your data center business is and how much operational capacity has been sold?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Yeah. The total design capacity of the 14 facilities which are live is 188 MW, out of which 129 MW of capacity is revenue generating at present.

Raju Vegesna, Chairman, Sify Technologies Limited: At the end of March.

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: As of March 26th.

Greg Burns, Analyst, Sidoti & Company: Okay. The 81 MW that you mentioned, that is contracted and in your backlog?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Yeah. 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.

Greg Burns, Analyst, Sidoti & Company: Okay.

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Will be delivered in a phased manner to the customer.

Greg Burns, Analyst, Sidoti & Company: Okay. Perfect. In terms of CapEx, I guess it was INR 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?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: The CapEx will be higher for this year. Given that we are almost doubling our capacity, it will be significantly higher.

Greg Burns, Analyst, Sidoti & Company: Okay. Are you seeing any bottlenecks in terms of either energy availability or inputs like memory that might impact the pace of your rollouts?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: At present, we aren’t seeing anything here. There is very good support from the Union Government as well as the state governments for the data center infrastructure creation in India. 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. There are a good number of customers who are in active conversation in this to avail this benefit.

Greg Burns, Analyst, Sidoti & Company: Okay, great. Thank you.

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Thanks, Greg.

Operator: Thank you. Once again, ladies and gentlemen, if you have any questions or comments, please press star one on your telephone keypad. Our next question is coming from Prateek Singh with IIFL Capital. Your line is live.

Prateek Singh, Analyst, IIFL Capital: Hi. Thanks for this opportunity, 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 2025 end. I understand that 188 is still 188. Can you just give us a sense as to how the other two numbers have changed, which are installed and operational?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Yeah. The 127 MW which is installed is at 140, and 111 is at 129.

Prateek Singh, Analyst, IIFL Capital: Understood. When we say that 81 MW is backlog, and when you said early part of second quarter, by second quarter here, we mean the second financial year quarter, right?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Correct.

Prateek Singh, Analyst, IIFL Capital: Does it mean that by.

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Will be delivered in a phased manner.

Prateek Singh, Analyst, IIFL Capital: Okay.

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Yeah.

Prateek Singh, Analyst, IIFL Capital: Typically that takes 15-18 months for the entire 81 MW to be revenue generating?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: No, the current customer schedule is to deliver it within this financial year.

Prateek Singh, Analyst, IIFL Capital: Understood. Another question is, Sir, when you talked about almost doubling of capacity this year, we are talking about doubling of the design capacity, which is 188, going to almost 370-380?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: No, I’m talking about doubling of the revenue generating capacity.

Raju Vegesna, Chairman, Sify Technologies Limited: Also we will build the design capacity also beyond that, beyond 188.

Prateek Singh, Analyst, IIFL Capital: Understood, sir. Just one last question. Given that there is so much happening, I visited your Rabale site also last month, and I noticed that we are also providing the opportunity of liquid cooling. If one had to get a sense as to what kind of EBITDA per MW, how liquid cooling would differ versus the current scenario, at least one can assume on the base basis that our EBITDA per MW would largely at least be what we are doing right now without liquid cooling, or do we think that liquid cooling, the EBITDA per MW might be a bit lower than what we are doing right now?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: No, it could be little higher, but I think that too much of specifics, maybe we can have a conversation separately because customer contracts have some unique elements, the way they are constructed. Typically, considering higher capital deployment, you tend to get a higher return.

Prateek Singh, Analyst, IIFL Capital: Understood. Thanks. I’ll join back the queue.

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Yeah. Thank you.

Operator: Thank you. Our next question is coming from Sri Tulsidutt, who is an investor. Your line is live.

Sri Tulsidutt (Srikanth), Investor: Good morning, sir. This is Srikanth here. I almost join all of your earnings call. 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 been decided? There have been speculations, somebody’s quoting one number, somebody else is quoting another number. Those two would be my specific questions.

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Okay. Let me take the latter one. The size is already communicated as part of the DRHP. 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. Total INR 3,700.

Sri Tulsidutt (Srikanth), Investor: Okay.

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: 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’re waiting for the guidance from the bankers on the timing of the actual issuance and listing. As Management, we have done our road shows, approvals are all in place. We’ll get guided with the bankers for the next steps.

Sri Tulsidutt (Srikanth), Investor: At those numbers, what does it translate to the enterprise value of Sify Infinit Spaces?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: That would be little difficult to comment here. I think depends on how the book building process goes, and once that is done, as part of the updated DRHP, it would be visible.

Sri Tulsidutt (Srikanth), Investor: Okay. Not a problem.

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Yeah. Thanks, Srikanth. Thank you.

Sri Tulsidutt (Srikanth), Investor: Thank you for the opportunity.

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Thank you.

Operator: Thank you. Just a quick reminder, ladies and gentlemen, it’s star one if you have any questions or comments. We have another question from Prateek Singh with IIFL Capital. Your line is live.

Prateek Singh, Analyst, IIFL Capital: Hi. Thanks for the follow-up. Sir, in the last call, if I remember correctly, we had said that we are working on two expansions, which were 77 MW and 52 MW, if I’m not wrong. Can you just guide us as to which are the locations where these two expansions are coming in? Are they both in Rabale or in Noida or other places? We also mentioned that the 77 earlier was 52, and because of higher density, it was taken up to 77. Is there any opportunity to take this 52 that we’re talking about right now to 77 or 80 also?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Both of them are at Rabale, Prateek. The facility which you have visited, you’d have seen the construction right adjacent to the place where you had all the meetings and the facility visit. That is the 77 MW one, which we’ll be delivering to the customer now. Right opposite, you’d have seen the other two towers, which are the 52 MW, and based on the customer engagement, the final usage of that could be higher than 52. 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.

Prateek Singh, Analyst, IIFL Capital: This 52 also will be commissioned or will be, Sir?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Yeah, a part of it will get commissioned this financial year, and the other part the first quarter of next financial year.

Prateek Singh, Analyst, IIFL Capital: Thank you. Sir, you were saying something?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Yeah, Prateek, 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 two facilities which are getting ready for delivery.

Prateek Singh, Analyst, IIFL Capital: Sure. Thanks a lot, sir.

Operator: Thank you. Our next question is coming from Sourabh Arya with Oaklane Capital. Your line is live.

Sourabh Arya, Analyst, Oaklane Capital: Yeah. Hi, sir. Am I audible?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Yes. Suraj.

Sourabh Arya, Analyst, Oaklane Capital: Yeah. Hi.

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: You’re audible.

Sourabh Arya, Analyst, Oaklane Capital: First question is, can you give some color for all three businesses going into next year? Like obviously, you were expecting till last quarter improvement in Data Services and even improvement in Network business. How should we think about all three businesses from revenue growth and margin perspective?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Yeah. Typically, it’s forward-looking statements, Suraj, and we refrain from that, but I can just give you a 30,000 feet view. Data Center business growth numbers I’ve already communicated as part of our communication. As against 129 MW of revenue-generating capacity, we have contracted for delivery this year. Already 81 MW of capacity is there. As far as the Network Services business is concerned, it’s organically growing at double-digit numbers, of course, low double-digit numbers. 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.

A lot of work is happening over the last 18-24 months, and as and when the consumption picks up in the domestic market, we’ll be ready for delivering those services. That investment will continue to be there for some time, given the fact that we are confident about its long-term prospects.

Sourabh Arya, Analyst, Oaklane Capital: On the margin side, if you could give, like you were expecting breakeven of data services business, so how should we?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Yeah. I’ll not be able to give a specific quarter. There is work happening to get to breakeven. I’ll not be able to give a specific quarter when we will achieve that.

Sourabh Arya, Analyst, Oaklane Capital: Okay. Sure. Over two years, you expect it to turn around? How should we?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Yeah. It should be.

Sourabh Arya, Analyst, Oaklane Capital: How should we look at the progress of this business then? Would it be quarterly improvements?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: No, you should see quarterly improvement going forward. I think two years is a very reasonable period to see that we get to break-even. It’s a very reasonable period.

Sourabh Arya, Analyst, Oaklane Capital: Okay. Whatever is happening in Middle East, so do you think some of the demand will shift to India? Have you started seeing it in interaction with clients that they’re inquiring about?

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Yeah, we are seeing that happen for our data center colocation business, and consequently, to our network business as well.

Sourabh Arya, Analyst, Oaklane Capital: Okay. Perfect, sir. Thank you. Thank you very much. All the best.

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Thank you.

Operator: Thank you. As we have no further questions on the lines at this time, I would like to turn the call back over to management for any closing remarks.

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Thank you for everyone, and your time on this call. Have a good day.

Operator: Thank you. Ladies and gentlemen, this does conclude today’s conference, and you may disconnect your lines at this time. We thank you for your participation.

M.P. Vijay Kumar, Executive Director and Group CFO, Sify Technologies Limited: Thank you, Operator.