Good day everyone, and welcome to the Sify Technologies financial results for second quarter fiscal year 2026 through 2027. At this time, all participants are placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to hand the floor over to your host, Praveen Krishna. Sir, the floor is yours.
Thank you, Matthew. I would like to extend a warm welcome to all our participants on behalf of Sify Technologies Limited. I am joined on the call today by Raju Vegesna, Chairman, and M P Vijay Kumar, Executive Director and Group CFO of Sify Technologies. 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 LuRi Group at 1-646-824-2856 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. 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. 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 and the quarter 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 that is 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 actually cause 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 documents. 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. Allow me to turn this over to Mr. Raju Vegesna, Chairman of Sify Technologies. Chairman.
Thank you, Praveen. Good morning, everyone, and thank you for joining on the call. India's digital transformation is entering into a new phase of execution at scale. What was once a digital transformation agenda has now becoming a business imperative, with organizations investing in technology to improve productivity, resilience, and the customer experience.
India continues to benefit from unique combination of progressive policy initiatives, expanding digital infrastructure, and a deep pool of technology talent. As AI adoption gathers pace and the need of secure, scalable, and interconnected digital infrastructure will become even more critical.
This presents a significant opportunity for India to strengthen its position as a global technology and innovation hub. At Sify, we continue to align our investments with these long-term trends. Our integrated portfolio of data centers, network, and digital services enables us support customers as they modernize their technology environment and prepare for an AI-enabled future.
India is no longer preparing for a digital future. It is actually actively shaping it. Sify remains committed to building the infrastructure and capabilities that will help power this next chapter of India's growth. Let me now bring our Executive Director and Group CFO, Mr. M P Vijay Kumar, to explain both the business and financial highlights. Vijay Kumar.
Thank you, Chairman. We continue to strengthen our business through sustained investments in infrastructure, technology platforms, and people, aligned with the evolving needs of our customers and the long-term opportunities in India's digital economy. Our investment priorities remain focused on expanding our data center capacity, modernizing our network infrastructure for AI workloads, enhancing our cloud interconnect capabilities, and strengthening the tools and platforms that support operational efficiency and customer delivery.
Equally, we continue to invest in developing our people, building the skills and capabilities required to support emerging technologies and deliver consistent outcomes across our businesses. These investments are being pursued alongside a continued emphasis on cost competitiveness, resource optimization, and cash flow management.
While capacity expansion and capability building have implications for depreciation, interest, and manpower costs, we remain focused on ensuring that capital allocation is supported by sound financial planning, prudent risk management, and long-term business objectives.
Our priority is to maintain a strong balance sheet and adequate financial flexibility while investing for sustainable growth and creating enduring value for our shareholders. Let me now expand on the business highlights for the quarter.
The revenue split between the businesses for the quarter was network services 43%, data center services 37%, and digital services 20%. As of September 30, 2026, data center operational capacity stood at 136 MW, and we have a contracted capacity of 113 MW scheduled for delivery.
As of September 30, 2026, Sify provides services via 1,264 fiber nodes across the country, a 6% increase over the same quarter last year. A detailed list of our wins is recorded in our press release, now live on our website. Let me briefly sum up the financial performance for Q2 of FY 2026/2027.
Revenue was INR 13,798 million, an increase of 31% over the same quarter last year. Adjusted EBITDA was INR 3,131 million, an increase of 33% over the same quarter last year. Profit for the quarter was INR 40 million. Capital expenditure during the quarter was INR 8,573 million. Cash balance at the end of the quarter was INR 5,868 million. I will now hand over to our Chairman for his closing remarks. Chairman?
Thank you, Vijay Kumar. Sify is well-positioned to support India's digital transformation and the opportunities emerging from an increasingly connected and AI-driven future. As India's digital transformation advances, we remain committed to enabling this journey through our technology capabilities, infrastructure, and services, while creating long-term value for all our stakeholders. I thank you all our stakeholders for their continued trust and confidence as we work towards this future. Thank you for joining us on the call. I now hand over to the operator for the questions. Operator?
Certainly. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone. Please hold while we poll for questions. Thank you. Our first question comes from Greg Burns from Sidoti. Your line is live.
Good morning. I was just hoping to get an update on the status of the Sify Infinit Spaces IPO, maybe the potential timing for that.
Yeah. The bankers are advising us on the right time to do the IPO. We continue to be engaged with the bankers, and we will communicate once the dates are finalized.
Okay. Is it a market-related issue causing the delay? What are you looking to see in the market to complete the transaction?
Yeah. It is not strictly market related. The market in India is pretty good. You just saw the country's largest IPO happening very successfully. The bankers would like to time the issue at the appropriate time. Also we are adequately capitalized for the time being as well.
Okay. That I guess was my next question. Does this in any way constrict your ability to grow? Do you have adequate access to capital to continue your growth plans at the current trajectory?
Yes.
Okay. The operational capacity, that 136 MW, that is your revenue-generating capacity?
You are right.
What that number is?
You are right.
Okay. What is the total design capacity of your current footprint? Just so we know how much that can expand. The 113 MW that is in backlog, the 113 MW, what is the timeline of bringing that online?
Yeah. We will be delivering this beginning this quarter over the next three quarters. The total design capacity, after including the backlog to be delivered, we would be close to about 300 MW.
Okay, great. As you look at the competitive landscape within the market, obviously, there is a lot of investment going on in the data center space in India. How is pricing when we think about the ROI you are looking to get on these investments? Are you seeing any changes in pricing, your ability to rent out space or any factors that might impact the return on investment you are getting on the spending?
Yeah. At this point in time, as far as Sify is concerned, and to my knowledge, as far as the peers are concerned as well, the industry demand is in far excess of the supply which is available. Given this scenario, there is no pressure on pricing. In fact, the pricing is getting better, and the returns are also improving.
Okay, great. All right. Thank you very much.
Thank you.
Thank you. Your next question is coming from Prateek Singh from IIFL Capital. Your line is live.
Hi. Thanks for the opportunity. Just to get some clarity on this 113 MW number. Earlier, when we said that 81 MW was deliverable in FY 2027, that is still on track and that is part of this 113 MW. Is that the correct understanding?
You are right, Prateek.
Okay. What is the current already commissioned build capacity, which used to be 188 MW for three quarters?
Yeah. That is increasing to about 300 MW. That is what is under construction now. This 136 MW plus 113 MW, which is 249 MW, will become revenue generating over the next few quarters.
Understood. Regarding the IPO delays, is there any regulation as to one needs to do an IPO within so much so time of the RHP filing in India, or there is no such strict timelines as such, after which we have to restart the process?
There is a timeline available, which is up to January end, and beyond that, it is a restart process.
Okay. And sir, as you used to mention in your last calls, in the hypothetical scenario of IPO getting delayed further, you will be supported by Kotak. Is that understanding still correct?
Correct.
Understood. My next line of question is around the digital services business. I think after a long time, we saw this business turn EBITDA positive. Do you think this is something which can sustain, or were there any one-off elements this quarter?
It should get better from here. A lot of work has gone in and continues to happen here. The idea is for us to make our digital service entity portfolio of services largely AI-led one. As you know, this technology is scaling well so h opefully, this should be a sustainable performance going forward.
Understood. My last question is, based on your current footprint and land bank, what is the maximum design capacity, with ballpark range, you can reach without the need for further acquiring any land? Does it cap out at 300 MW or can we go higher
No.
on the current land parcel that we have?
Yeah. We should be able to do more than a gigawatt with the land bank which we have across seven cities.
Okay. Any update on the edge data centers which we alluded to over the last few calls, or is it still too early for that?
Two edge data centers have gone live, which is in Lucknow and Mohali. That is Chandigarh. There are other two edge data centers where work is happening as we speak.
Thanks. My last question is on the Andhra data center. Is there any progress there, or that is something that we will focus on after our current set of projects on current land parcels?
You are right. We will first deliver on our existing commitments but p arallelly, we are working on the engineering part for the Visakhapatnam site, and we will take it up at the appropriate time.
Thanks. Thank you for answering my questions. All the best.
Thanks, Prateek.
Thank you.
Thank you. Your next question is coming from Sourabh Arya from Oaklane. Your line is live.
Yeah. Hi, sir. Am I audible? Hello.
You are audible.
Yeah. Hi.
You are audible, Sourabh.
First question. Yes, sir. First question is why QoQ there is decline in data center revenue. I think we added 5 MW last quarter, right?
Yeah. Last quarter, when you added the 5 MW, it was largely for the enterprise customers. When you do it, there is an installation revenue which you actually get, consequent to which there was an increase. There was also a power revenue, which scaled up in that particular period from the existing customers.
But how do we explain the decline? I meant to say.
No, I was talking about why the previous quarter was higher.
No, I see.
Yeah. To put it the other way around, the current quarter, we did not have any implementation revenue, unlike the previous quarter. The power consumption revenue was little lower than the last quarter. Power revenue, as you know, is a passthrough. It doesn't impact the margin generation. Am I clear, Sourabh, there?
Thank you. Your next question is coming from Greg Burns from Sidoti. Your line is live.
Hi. I guess just to follow up on that last question. It's more of just a timing issue with how the backlog's getting deployed as opposed to maybe a change in the trajectory of the data center business, correct?
Yeah. The backlog orders will get delivered beginning this quarter. Over the next three quarters it will get delivered.
Okay, great. I had a last question about the network services growth this quarter. It was a lot higher than we expected and more than we've seen in recent quarters. Was there anything specifically driving that? Is that a good level to build off of for our models?
Yes. As far as the network is concerned, you'd recall that we started building our national long-distance fiber network on our own. Given the hyperscale data center growth happening in the country and the data center interconnect services as well, this business is seeing upside. We'll continue to stay focused on that business growth as well.
Great. All right. Thank you.
Thank you.
Thank you. Your next question is coming from Sourabh Arya from Oaklane. Your line is live.
Hello. I actually got dropped.
Yeah. Hi, Sourabh.
You were an-
You dropped. I was asking you whether I explained to you satisfactorily. You got it?
No. Actually, I got dropped from the call.
Okay. I will repeat, Sourabh. I will repeat. Unlike quarter one, this quarter, we did not have any enterprise implementation services income, which typically is a one-time income. That is one reason.
Okay.
Second is, in the previous quarter, there was a higher power consumption from the existing customers, and the power revenue was higher. This quarter it was relatively moderated, and hence the power revenue, which is a passthrough, was lower. Those are the two reasons why between the two quarters there is a revenue change.
Okay. But capacity was more in this quarter versus the last quarter.
Yeah. Correct.
How should we think about then these capacities panning out in next two quarters? Because you said that most of the additions will happen in the second half.
Yeah. In fact, we have communicated that there is 113 MW of contracts, which is capacity, which is scheduled for delivery. It will get delivered beginning this quarter over the next three quarters.
Okay. Perfect. And sir, network business has grown very strongly while the
Yeah
margin declined. So how should one read this business in that sense?
Yeah.
In past you have guided it will grow. Yeah.
Yeah. Network business should continue to see some bit of growth, corresponding to the data center growth as well. Because as the hyperscale data centers grow in India, the network connectivity between the data centers and for enterprises to connect to those data centers, that business will also see growth. And as I mentioned during my address, the network expansion which is happening is largely now for enabling AI workloads to be carried across the length and breadth of the country. And that's one of the reasons why we are seeing growth.
When India's capacity moves from 1.5 GW- 10 GW, that is what everybody is saying for next five years.
Correct.
Does it mean network business can grow in that line?
Yes.
Can it become 4x-5x?
I'm not too sure about 4x-5x. Volume wise, probably yes, but not revenue wise, because the unit economics of that business is different.
Okay. There is a pricing pressure always in this business.
It's not pricing pressure, it's inherent for that nature of business because as you scale the unit economics, the costs are significantly lower.
But can you put some context here if industry is growing from 1.5 GW - 10 GW, what does it mean for network opportunity in terms of revenue?
There are multiple legs of a network. One is the subsea cables, which come here because most of the data center capacity is for serving the global workloads which are there. There will be a subsea revenue. We don't participate in the subsea revenue. Then connectivity between the data centers in India. That business will see some growth for sure.
Okay. I think then maybe the better question would be, among your three businesses, is it fair to say data center will grow highest and then network and then digital? Do you expect in some other way around?
I don't want to make forward-looking, but if you look at the trend over the last two years and the way we have deployed capital, that's a reasonable conclusion you can arrive at. But there are businesses like the digital services, which has the potential to scale bigger. But let's wait and see as to when that will start delivering.
Okay, perfect, sir. Thank you. Thank you very much.
Okay. Thank you, Sourabh.
All the best.
Thank you.
Thank you. Your next question is coming from Prateek Singh from IIFL Capital. Your line is live.
Hi. Thanks for the opportunity again. Three questions. First, what is the update on the Vizag cable landing station? Has work started there or it is something which will make sense?
Okay. The Vizag cable landing station, we have got the DoT approval now, and we will start work on the same.
Okay. Just to understand a bit more about the network services business, it is something where there would be multiple peers and competitors as well, right? Who can-
Yeah
take part in the growing demand.
Yeah. There are good peers. There are some four or five good peers who are there, and peers playing in different-
Understood.
Yeah.
On the CapEx front, possible to quantify on the CapEx front on the first half spend or maybe this quarter's spend, how much is going into network and how much is going into digital?
No, at this point of time, substantial amount of CapEx is on the data center. Then on the network side, probably we are about, 80:20 ratio.
How does it work? I mean, to satisfy more network demand, is it like we are sitting on capacity and we do not need to do CapEx for that? Sorry if I do not understand the business really well on the network side. How does it work?
Yeah. On network side, we have a model of a satellite delivery of services. Having said that, we will increase our spend on the network side over time. We currently are focused on delivering our data center capacity, but we will continue to invest on network too, and you will see spend happening on that in due course.
Thanks. My last question is, this 113 MW is entirely in Rabale? If yes, which towers are they?
It is in Rabale and in Noida. There is small capacity in Chennai as well.
Understood. Thanks a lot again.
Sure. Okay. Thank you, Prateek.
Thank you. Once again, everyone, if you have any questions or comments, please press star then one on your phone. Please hold while we poll for questions. Thank you. That concludes our Q&A session. I will now hand the conference back to Raju Vegesna for closing remarks. Please go ahead.
Thank you. Thank you for your time on this call. Have a great day. Thank you.
Thank you. Everyone, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.