Greetings. Welcome to the Sify Technologies Financial Results for Q2 Fiscal Year 2023-2024. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Praveen Krishna. You may begin.
Thank you, Holly. Good morning, and I'd like to extend a warm welcome to all of our participants on behalf of Sify Technologies Limited. I'm joined on the call today by my Chairman, Raju Vegesna, my Executive Director and Group CFO, Mr. M.P. Vijay Kumar, and my CEO, Mr. Kamal Nath. Following our comments on the results, there'll 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'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 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'd like to point out that certain statements contained in the earnings release and in 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 would now like to introduce my Chairman, Mr. Raju Vegesna. Chairman?
Thank you, Praveen. Good morning, and thank you for joining us on the call. India's data policy is entering into the final phase of being adopted into the law. This will give a shape and clarity of data localization and formalization regulations around the data security, which will help accelerate investments in India's data center lands. This will also lead to India being viewed as a more viable interconnect point between Asia and the Middle East by international connectivity players. Enterprises continuously exploring digital transformation and government entities looking into automate the scale social welfare system will be important target audience for Sify's digital transformation tools and services. Let me now bring Kamal, our CEO, to expand some of the business highlights in the past quarter. Kamal?
Yeah. Thank you, Raju. As enterprises pursue their digital transformation and digitalization objectives, they are also recalibrating their digital infrastructure across agile 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 recalibrate 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 31%, digital services at 28%, and network services at 41%. During the quarter, Sify added 1.2 MW of new data center capacity.
As on 30 September 2023, Sify has deployed 6,535 SD-WAN service points across the country. Sify now provides services via 952 fiber nodes across the country, a 14% increase over the same quarter last year. During the quarter, Sify invested $1.5 million in startups in the Silicon Valley area as part of our corporate venture capital initiative. To date, the cumulative investment stands at $7.07 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?
Thank you, Kamal. Good morning, everyone. Let me briefly present the financial performance for the Q2 of financial year 2023-2024. Revenue was INR 8,791 million, an increase of 11% over the same quarter last year. EBITDA was INR 1,519 million, a nominal increase of 1% over the same quarter last year. Profit before tax was INR 52 million, a decrease of 76% versus the same quarter last year. Profit after tax was INR 15 million, a decrease of 87% versus the same quarter last year. Capital expenditure during the quarter was INR 1,797 million. We continue to make substantial investment in capacity creation across data centers and network expansion, and people to build skill sets for IT services opportunities we foresee, given the digital transformation engagements that India Inc. is actively pursuing.
This has led to the accompanying depreciation and interest cost reflecting on our net profit. We are also actively scaling up on our sustainable measures across all businesses, especially our data centers. The cash balance at the end of the quarter was INR 7,570 million. I will now hand over to our Chairman for his closing remarks. Chairman?
Thank you, Vijay. Enterprises in India are aggressively pursuing digital transformation models for their businesses. In their search for partners, they will look for service providers who will bring a value proposition to the table. Our converged ecosystem and our digitally enabled services are evolving to be the answer to most of their business needs. We have a great opportunity across India, and now, you know, that's the way we are looking at. Thank you joining us on this call. I will now hand over to operator for questions. Operator?
Certainly. At this time, we will be conducting a 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. You may press star two if you would like 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. Your first question for today is coming from Jon Atkin at RBC Capital Markets.
Thanks very much. I wondered if you could talk a little bit about AI demand in India and anything that you're seeing differently than three months ago, six months ago, in terms of overall demand into the market, and then what implications it has for maybe your capital deployment going forward and your strategy for taking advantage of that demand. Thank you.
Hi, Jon, this Raju. To answer, I will make it into two sections. One, if you look at AI/ML adoption in India, it is every discussions we are having with any enterprises or even in a government, there is a talk about AI/ML adoption in their businesses enterprises. That is given. Either you look at it, how they want to run their network operations, how they want to run their digital services, how they want to run the data centers. Every discussion as AI/ML opportunities are there, and that is where the customers are looking at how do you adapt AI/ML will be useful for their business. Second, the AI/ML what we are seeing is the, b ecause the growth of the AI/ML, what we see the capacity required for the data centers also, we are seeing the uptick in the market.
Because the growth of the AI/ML, what we see the capacity required for the data centers also, we are seeing the uptick in the market. I think it's good for Sify for both our digital services and even network infrastructure point of view, and then also our data center expansion. The overall in India, that AI/ML is an important topic, and every customer is interested how they can adopt AI/ML tools and technology across the board, you know?
To the extent that you are going to directly try to meet that demand by providing capacity for large language models and so forth, I wondered what implications that might have for your capital budget and even your design, given in times the higher density, the higher rack density requirements that one often associates with these requirements.
All our data centers, especially the new ones, are equipped to support higher-density rack. Also, we also have a lot of the data centers' capacity is going to be available. We are in a very good position to take the AI/ML uptick, either coming from a hyperscaler or even in Indian enterprises market. You know, that is one of the considerations took, and we invested across our data centers and our network infrastructure.
Thank you.
Once again, if you have any questions, please press star one. Your next question is coming from Greg Burns at Sidoti & Company.
Morning. Could you just update us on your roadmap for the new data centers? How much capacity you plan to bring online over the next year, and the timing of that?
One is, Greg, is we will not forecast a lot of the things, but, you know, as we expanded before, we are bringing substantial capacity in Mumbai market, and we are bringing substantial capacity in our North India, Noida market, and also we are bringing in our Chennai market. We are also expanding. It is going to be available in the next six months in the market, these, all these three campuses. The remaining things we are investing in our Hyderabad and Bangalore plants also, you know. We are investing in all the five markets in India.
Okay. How much capacity is in the next six months? The Mumbai, Noida, Chennai, how much extra capacity does that bring online?
You see, the capacity, you see, there are two phases, right? One is physical location, other is availability of the nine IT infrastructure. You know, we will have probably a capacity, you know, north of 10 MW-12 MW within the next six months. Our facilities are capable of expanding between these three locations for more than 100 MW, you know?
Okay. Okay, more than 100 MW total, but the 10 MW-12 MW you mentioned is what-
Immediately.
What is sold? What? [crosstalk]
You build it, you know, when, by demand, you know?
Okay. Oh, okay, got it. Okay.
You build it.
Okay.
Campuses are stable.
Yep.
You build it, what is required by demand, you know, right?
Okay, you have demand or you've sold 10 MW-12 MW of that 100 MW capacity? Is that?
Yeah. That, you know, either it's sold or being sold. You know, some of the things we build ahead of schedule, and so that may be located, you know?
Okay. All right, EBITDA was a little bit lower than I was looking for this quarter. I guess SG&A rose a little bit more than expected. Can you just talk about what's driving that growth in SG&A? Is that a good level to model off of going forward? I guess, you know, the EBITDA margin was down because of it this quarter. Is this a good level to think about for the business, or do you expect that to increase as maybe some of the revenue on these new investments picks up?
Yeah. One is we are doing the new investment, and also, you know, our digital services, we are substantially getting that thing onto the track. We are investing in our manpower and other activities. To make it, you know, all three independent businesses exponentially can grow in a very fast. We are making some forward calls and investments in this area. That's the reason why our SG&A is high. Probably you're seeing this bump substantially we invested, but I think it will be over the time, it will be proportional to our revenues, you know?
Okay. Okay. The debt level, does that include all the Kotak investment, or has any part of that been reclassified as equity?
Until date. We have to draw additional money anytime 20 April 2024 and before 2026 October.
Okay. Lastly, the digital services was up 25% in the quarter. What was the primary driver of that growth?
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Okay, thank you.
As a reminder, if there are any questions or comments, please press star one. We have reached the end of the question and answer session, and I will now turn the call over to Raju Vegesna for any closing remarks.
For your time on this call, and we look forward to interacting with you through the year. Thank you. Thank you, Holly.
Thank you. This does conclude today's conference call, and you may disconnect your lines at this time. Thank you for your participation.