Good morning, ladies and gentlemen, and welcome to the Sify Technologies financial results for first quarter and fiscal year 2022 to 2023. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Mr. Praveen Krishna. Praveen, over to you.
Thank you. I'd like to extend a warm welcome to all our participants on behalf of Sify Technologies Limited. I'm joined on the call today by Raju Vegesna, Chairman, Kamal Nath, Chief Executive Officer, and M.P. Vijay Kumar, Chief Financial Officer. 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 Standard 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 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 would now like to introduce Mr. Raju Vegesna, Chairman of Sify Technologies. Chairman?
Thank you, Praveen. Good morning, everyone. Thank you for joining us on the call. Even though for the last couple of months there's uncertainty in the macroeconomics of the world, India still retained a strong outlook for investments and growth. This is in a large part due to the consistent economic reforms of the government and its stated ambitions to pursue the digital methods to deliver the social benefits. The technology landscape has been the biggest beneficiary of these policies, and this is reflected in the growing number of incoming requests for the digital transformation. We see the Indian enterprises using this opportunity to adopt the best practices from around the world. Let me now bring in Kamal, our CEO, to expand on some of the business highlights for the past quarter. Kamal?
Yeah. Thank you, Raju. Enterprises are displaying a growing comfort in digital adoption across all levels.
They are leveraging digital transformation to spark innovation across the enterprise, and this is resulting in an increasing number of new initiatives delivered on a digital-only platform. While earlier our mandate was to accelerate our clients' transformation goals, our cloud-focused digital initiatives are now called upon to create new business processes, customer experiences, and greater cost effectiveness. Enterprises' increasing interest in outcome-based initiatives, incoming policies around data, and the government's aggressive adoption around all things digital should act as tailwinds for our data center, network, and digital services. Let me now expand on the business highlights for the quarter. Revenue from data center services grew by 56% over same quarter last year. Revenue from digital services stayed flat. Revenue from network services grew by 11% over same quarter last year.
The revenue split between the businesses for the quarter was data center colocation services at 34%, digital services at 26%, and network services at 40%. During the quarter, Sify has invested $150,000 in startups in the Silicon Valley area as part of our corporate venture capital initiative. To date, the cumulative investment stands at $3.44 million. Sify commissioned incremental capacity of 4 MW across Noida and Hyderabad data center facilities in the quarter. As on June 30, 2022, Sify provides service via 824 fiber nodes and 1,910 wireless base stations across the country, an 11% and 5% increase respectively over the same quarter last year. The network connectivity services crossed a critical milestone of deploying more than 5,000 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 bring in Vijay, our 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 first quarter of financial year 2022-2023. Revenue was INR 7,709 million, an increase of 20% over the same quarter last year. EBITDA was INR 1,525 million, an increase of 5% over the same quarter last year. Profit before tax was INR 395 million, a decrease of 10% over the same quarter last year. Profit after tax was INR 271 million, a decrease of 18% over the same quarter last year. Capital expenditure during the quarter was INR 2,241 million. We remain committed to expanding our data center and network footprint and are gradually scaling up the adoption of renewable energy in our data centers.
Investment into people and tools will be complementary to this growth without losing sight of fiscal discipline. As we scale, our focus would be on ensuring that costs are optimized and revenues are improved across our services mix. Cash balance at the end of the quarter was INR 3,794 million. I will now hand over to our chairman for his closing remarks. Chairman?
Thank you, Vijay Kumar. Sify is in a strong position given its historical performance. We will aggressively pursue our growth agenda. The focus is to build ahead of the demand so we can market the rebounds. There will be one obvious choice. Thank you for joining us on this call. I will now hand over to the operators for questions. Operator?
Thank you very much. Ladies and gentlemen, the floor is now open for questions and comments. If you wish to ask a question using the phone lines, please press star one on your phone keypad at this time. If you are connected using our webcast tool, please write your questions in the chat section of the platform and hit Submit. Please wait while we poll for questions. Thank you. Your first question is coming from Greg Burns of Sidoti & Company. Greg, over to you.
Morning. First, in terms of the data center services, performance this quarter, it came in a little bit better than we were expecting. Was that driven by any one-time items, or is that a good number to build off of, going forward for the rest of the year?
I think it's a mix of both. I think, we hope to see certain kind of a growth, you know, because the data centers in India is hot and, you know, I think, it is a good growth, you know?
Okay. Earlier this year, I guess the government classified data centers, they gave them infrastructure status. Can you just talk about what that means for the industry and how that impacts you and your ability to finance your data center growth?
Yeah. The infrastructure status, which the government had announced as part of its annual finance bill presentation, it's yet to be formally notified. What this actually means is access to long-term debt and at a relatively lower cost. There are lots of institutions, particularly the insurance entities who look at participating in long-term debt funding. We will be able to raise needful resources to fund our data center expansion plans.
Okay. Does that change in any way that you look at funding or financing your data center expansions? I know you just recently had the partnership with Kotak, so just how does that in any way change your plans? Maybe you could just give us an update on how much you've drawn on that Kotak agreement already.
Yeah. The Kotak partnership is a convertible instrument, so it's essentially equity. We have so far drawn about INR 2,000 million in INR rupees before end of this financial year. We are committed to draw another INR 2,000 million, which is also a convertible instrument. What this convertible instrument gives is it effectively strengthens our equity base, gives us ability for more leveraging. Given the infrastructure status as the government has recently or is committed to notify, we should be able to raise longer-term resources where the repayment would be spread over a longer period, leaving more free cash flows within the company to fund the expansion plans.
Yeah. Perfect. Okay. When we look at your competitive position in the market, I know. Could you talk about how having the network side of the business helps the data center business? How are those two kinda linked? Does having the network give you advantage going forward as demand starts to build for data center in India?
I think both goes hand to hand, but you know, we are going to go both the businesses, so you know, parallelly. I think both data centers and the network, we see the potential as more hyperscalers and the cloud platform is taking digital transformation, you know. Yeah, there are certain advantages, but we consider those two businesses are independent and run separate P&L, you know.
Okay. Is there anyone else waiting to ask questions?
At the moment, no.
Okay.
Telephone lines. I don't know about the webcast. Praveen, do you have many?
No. They would have popped up on your web, on the chat box.
Okay. Just checking. I have one more. In terms of your investment plans for this year, you mentioned 4. You commissioned, I guess, 4 MW of additional data center capacity this quarter. What's your total capacity right now, and what are the plans for your capacity by the end of this year? Like, how much incremental capacity are you bringing online this year?
Coming to the forecast. We currently have about 86 MW of IT power capacity, which is operational across 11 data centers spread over seven cities. We are committed to three greenfield projects which are under construction. As in the past, we are not in a position to give forward-looking statements. Nevertheless, there are three large greenfield projects under construction at Mumbai, New Delhi, which is Noida, and at Chennai.
Okay. I guess the plan still remains to add 200 MW of capacity over the next, I think, four years, is what you laid out. Is that still the plan?
Over the next four years, the outlook is pretty positive. We have done financial closure, which should support us to more than double our capacity in the next two to three years. As we make the capacity operational, we'll evaluate adding more capacity.
Okay. As we look at your leverage over this build cycle, how high do you think leverage is gonna get? Do you have a target on kind of the maximum leverage over this investment cycle that you're going through?
Yeah. Typically we have two, three benchmarks which the board has set for the company. One is in terms of debt-to-equity, which currently we are sub 1, whereas we could go anywhere up to 1.5. Second is a debt-to-EBITDA ratio, which a fairly good accepted multiple is about 3 x, and we are currently little over 2x , and we have enough leveraging ability. On a debt service coverage ratio also we have enough room to add debt.
Okay. All right. Perfect. Thank you very much. That's it for me.
Thank you.
Thank you, ladies and gentlemen. As a reminder, if you wish to ask a question, please press star one on your telephone keypad, or you can type your question in the chat box on the webcast. Okay, we appear to have no further questions in the queue. Praveen, do you have any questions on the webcast?
No, we can go ahead. The chat box is okay.
Okay. Thank you. Thank you for your time on this call, and we look forward to interacting with you throughout the year. Have a great day. Thank you.
Thank you. Ladies and gentlemen, this does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.
Thank you.
Thank you, guys.