Sify Technologies Limited (NASDAQ:SIFY) Q3 2024 Earnings Call Transcript
Sify Technologies Limited (NASDAQ:SIFY) Q3 2024 Earnings Call Transcript January 18, 2024
Sify Technologies Limited isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Greetings. Welcome to the Sify Technologies Financial Results for Third Quarter Fiscal Year 2023 through 2024. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Praveen Krishna. You may begin.
Praveen Krishna: Thank you, Olly. On behalf of Sify Technologies, allow me to wish you a very Happy New Year. I'm joined on the call today by Raju Vegesna, Chairman; M.P. Vijay Kumar, Executive Director and Group CFO; and Kamal Nath, CEO. Following our comments on the results, there will be an opportunity for questions. If you do not have a copy of our press release, please call Grayling Global at (646) 284 9400, and we will have 1 sent to you. Alternately, you may obtain a copy of the release at the Investor Information section on the company's corporate website at www.sifytechnologies.com/investors. A replay of today's call may be accessed by dialing in on the numbers 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 GAAP measures and of the differences between such GAAP measures and the most comparable financial measures calculated and presented in accordance with GAAP 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 protections 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 in the company's SEC reports and public releases. 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's business. I would now like to introduce Mr. Raju Vegesna, Chairman of Sify Technologies. Chairman?
Raju Vegesna: Thank you, Praveen. Good morning, everyone. Thank you for joining us on the call. A combination of pro-industry regulatory initiatives in India and encouraging investment climate and a lot of skilled human capital are the factors that continues to dominate enterprise business strategies for India. Business leaders are united in their view that India is central to their growth plans and are aggressively ramping up their local investments. Let me bring in Kamal, our CEO, to expand our -- some of the business highlights for the last past quarter. Kamal?
Kamal Nath: Yes. Thank you, Raju. As enterprises pursue their digital transformation and digitalization objectives, they are also recalibrating their digital infrastructure across hybrid cloud, network, security and edge infrastructures. Customer experience, business continuity, cybersecurity, application modernization and overall adoption of AI models are the prime drivers for this recalibration. Our infrastructure investments and services portfolio are fundamentally aligned to meet the customer goals. Simultaneously, we are continuously engaged with our customers to identify their specific needs and selectively recalibrating our propositions to support the same. Let me now expand on the business highlights for the quarter.
The revenue split between the businesses for the quarter was: Data Center Colocation Services at 32%, Digital Services at 28% and Network Services at 40%. As on 31st December 2023, Sify has deployed 6,920 contracted SD-WAN service points across the country. Sify provides services via 974 fiber nodes across the country, a 15% increase, respectively, over the same quarter last year. This quarter, Sify invested USD 0.15 million in startups in the Silicon Valley area as part of our corporate venture capital initiative. To date, the cumulative investment stands at USD 7.22 million. A detailed list of our key wins is recorded in our press release, now live on our website. Let me bring in Vijay, our Executive Director and Group CFO, to elaborate on the financial highlights for the quarter.
Vijay?
M. P. Vijay Kumar: Thank you, Kamal. Wish you all a very happy 2024. Let me briefly present to you the financial performance for the third quarter of financial year 2023-'24. Revenue was INR 8,659 million, a decrease of 3% over the same quarter last year. EBITDA was INR 1,689 million, an increase of 4% over the same quarter last year. Loss before tax was INR 20 million and after tax was INR 14 million. These are compared to a net profit in the same quarter last year with a substantially higher depreciation on account of ongoing infrastructure expansion projects and interest cost. Capital expenditure during the quarter was INR 1,087 million. We continue to invest in adding more data center capacity, extending our network footprint and skilling our people on new tools.
These investments are being made ahead of the curve and will reflect on our net profit for the near future. The interest on compulsory convertible debentures raised in our data center subsidiary for data center expansion has been accounted partly as equity in accordance with the GAAP and is recognized as expense in the statement of income. The cash balance at the end of quarter was INR 6,037 million. I will now hand over to our Chairman for his closing remarks. Chairman?
Raju Vegesna: Thank you, Vijay Kumar. As you can see, our investments, both in capital and resources are backed by our belief that the market is just warming up to our services. There is still a lot of runway, and we have the right portfolio of services. We just have to accelerate our engagements. Thank you for joining us on this call. I will now hand over to the operator for any questions. Operator?
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