Sify Technologies Limited (NASDAQ:SIFY) Q1 2023 Earnings Call Transcript
Sify Technologies Limited (NASDAQ:SIFY) Q1 2023 Earnings Call Transcript July 20, 2023
Sify Technologies Limited beats earnings expectations. Reported EPS is $999, expectations were $0.01.
Operator: Greetings. Welcome to the Sify Technologies Financial Results for First Quarter and Fiscal Year 2023 to 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, Holly. I'd like to extend a warm welcome to all our participants on behalf of Sify Technologies Limited. I am joined on the call today by Mr. 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 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 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 non-GAAP measures and of the differences between such non-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 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 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'd now like to introduce Mr. Raju Vegesna, Chairman of Sify Technologies Limited. Chairman?
Raju Vegesna: All you know India is a growth story. This is an exciting time India is going through. We have to build our services and how do we make a stable destination, the availability of relevant resources tools and significant untapped demand for the Indian enterprises. The government has been consistent using IT as an enablement tool to implement social measures and this is the contributed to a really mature IT ecosystem. And our next phase of the growth will leverage this favorable environment by introducing innovative and cost [Technical Difficulty]. Our next phase of the growth will leverage this favorable environment by introducing innovative and cost-effective digital services for our customers. Let me now bring Kamal Nath, our CEO, to expand on some of our business highlights for the past quarter. Kamal?
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Kamal Nath: Thank you, Raju. As enterprises are pursuing their digital transformation and digitalization objectives, they are also recalibrating their digital infrastructure across hybrid cloud, network, security and edge infrastructures. This is a great opportunity for us to monetize our infrastructure, design for digital IT and transform the way digital infrastructures are managed through our digitalized services. We are topping that up by continuously building our core digital portfolio to support our customers' innovation journey. This portfolio places Sify in a unique position for all around customer engagement across their digital life cycle, which we believe would augment our growth strategy. 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 June 30, 2023, Sify provide services via 910 fiber nodes across the country, a 10% increase over the same quarter last year. The network connectivity service has now deployed 6541 SDWAN service points across the country. During the quarter, Sify has invested US$193,000 in in startups the Silicon Valley area as part of our Corporate Venture Capital initiative. To date, the cumulative investment stands at US$5.57 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, who will elaborate on the financial highlights for the quarter.
Vijay?
M. P. Vijay Kumar: Thank you, Kamal. Good morning, everyone. Let me briefly discuss some of the financial performance for the first quarter of financial year 2023/2024. Revenue was INR8547 million, an increase of 11% for the same quarter last year. [Technical Difficulty] EBITDA was INR1,724 million, an increase of 13% over the same quarter last year. Profit before tax was INR149 million. And profit after tax was INR95 million, a decrease [Technical Difficulty] Capital expenditure during the quarter was INR1,436 million. Sify and Sify Infinit Spaces Limited, a wholly owned subsidiary of Sify, which operates data center colocation business, have entered into an agreement with Kotak Data Center Fund on July 20, 2023, under which the fund will invest up to INR6,000 million [Technical Difficulty] Sify and Sify Infinit Spaces Limited, a wholly owned subsidiary of Sify, which operates the data center colocation business, have entered into an agreement with a leading investment bank led fund Kotak Data Center Fund on July 20, 2023 under which the fund will invest up to INR6,000 million, approximately US$73 million on today's exchange rate in the form of compulsorily convertible debentures Sify Infinit Spaces Limited.
Sify Infinit Spaces Limited will use the proceeds for the expansion of data centers including land acquisition for new data center capacity, investment in procuring alternate source of power and repayment of debt. Fiscal discipline will remain the cornerstone of our growth strategy, as we scale investments into our data centers and networks. By judicially allocating investments and resources, we will seamlessly expand our infrastructure in new resources and build competencies and scale. While we expect to see these investments impact profitability in the near-term, this should enable us to aggressively pursue digital transformation engagements in the future. We will continue to prioritize resource optimization and sustainability, fortify our [Technical Difficulty] The cash balance at the end of the quarter was INR3,240 million.
I will now hand over to our Chairman for his closing remarks.
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