Sify Technologies NASDAQ: SIFY reported full-year financial results for fiscal 2025-2026 and used its earnings call to highlight data center expansion plans, segment performance, and the status of its proposed listing for data center subsidiary Sify Infinit Spaces Limited.
Management cites India policy tailwinds and demand environment
Chairman Raju Vegesna framed the company’s outlook against what he described as accelerating digital adoption in India and a supportive policy backdrop. He pointed to the Union Budget’s recommendation of a tax holiday for foreign cloud providers that use Indian data centers to serve global customers, calling it an added tailwind for domestic data center growth.
“Enterprises today are moving beyond adoption to technology optimization,” Vegesna said, adding that Sify is positioned to partner with customers through integrated offerings spanning connectivity, data centers, and digital services.
Full-year results: revenue up 13%, EBITDA up 31%, net loss reported
Executive Director and Group CFO M P Vijay Kumar said consolidated revenue for the year was INR 44,877 million, an increase of 13% from the prior year. He reported EBITDA of INR 9,871 million, up 31% year over year.
The company posted a loss before tax of INR 941 million and a loss after tax of INR 1,366 million. Vijay Kumar also noted that, under an amendment agreement to a debenture subscription agreement with Kotak, an additional coupon payable on a compulsory convertible debenture—converted to equity in February 2026—was recognized as an expense in the income statement.
Cash balance at year-end was INR 507.1 million, and capital expenditure during the year was INR 13,282 million.
Segment mix and performance: data center growth leads, digital services dips
Vijay Kumar provided a breakdown of revenue contribution across Sify’s three business lines:
- Network Services: 39%
- Data Center Services: 39.5%
- Digital Services: 22%
He said segment revenue increased 12% in Network Services and 23% in Data Center Services, while Digital Services revenue decreased 2%.
On segment results, Vijay Kumar reported year-over-year increases of 91% in Network Services and 24% in Data Center Colocation Services, while Digital Services segment results decreased 67%.
Addressing questions on the path to improvement in the Digital (IT) Services business, Vijay Kumar said the company continues to invest in people and capabilities tied to AI infrastructure services. He did not provide a specific quarter for breakeven, but said there is work underway to reach it and that “two years is a very reasonable period” to get to break-even, adding that investors should expect “quarterly improvement going forward.”
Data center capacity: 188 MW design capacity, 129 MW revenue-generating; 81 MW backlog
Data center scale and contracted demand were central topics in the Q&A. In response to Sidoti & Company’s Greg Burns, Vijay Kumar said Sify has 14 live facilities with 188 MW of total design capacity, of which 129 MW is currently revenue generating (as of late March).
He added that the company’s data center subsidiary sold 17 MW during the year, bringing cumulative sold capacity to 129 MW. He also disclosed that, during the quarter, the data center business contracted an additional 81 MW “to be delivered in the coming quarters” of fiscal 2026-2027.
Pressed on the nature and timing of the 81 MW, Vijay Kumar described it as backlog for new facilities under construction that are expected to go live in the “early part of the second quarter” of the current financial year, with delivery “in a phased manner.” In a later exchange with IIFL Capital’s Prateek Singh, Vijay Kumar said the customer schedule is to deliver the 81 MW “within this financial year.”
Singh also asked for an update on installed and operational capacity figures referenced in Sify’s draft red herring prospectus (DRHP). Vijay Kumar said installed capacity increased to 140 MW from 127 MW, and operational (revenue-generating) capacity increased to 129 MW from 111 MW, while design capacity remained at 188 MW.
On expansion sites, Vijay Kumar said two projects referenced by analysts—77 MW and 52 MW—are both located at the Rabale campus. He said the 52 MW facility has the ability to scale higher “based on the customer engagement.” He added that 52 MW “or a part of it” will be commissioned in the current financial year, with the remainder in the first quarter of the next financial year.
Asked about the potential impact of liquid cooling on profitability, Vijay Kumar said returns “could be little higher,” but he declined to provide detailed unit economics due to customer contract specifics, noting that “considering higher capital deployment, you tend to get a higher return.”
Capex expected to rise as Sify targets major capacity ramp
Vijay Kumar said capital expenditure will be higher in the new fiscal year, responding to Burns’ question on spending outlook. “Given that we are almost doubling our capacity, it will be significantly higher,” he said, later clarifying to Singh that he was referring to doubling revenue-generating capacity, not design capacity. Vegesna added that the company also intends to build design capacity beyond the current 188 MW level.
On potential bottlenecks such as energy availability, Vijay Kumar said Sify is not seeing constraints at present and cited “very good support” from both the Union Government and state governments for data center infrastructure creation in India. He also reiterated management’s view that the government’s tax holiday proposal is drawing interest from customers in active discussions.
In another demand-related comment, Vijay Kumar told Oaklane Capital Management’s Sourabh Arya that the company is seeing some demand shift toward India in its data center colocation business and “consequently” in its network business as well.
On the call, Vegesna emphasized that Sify’s connectivity, data center, and digital services operations are intended to reinforce one another as an “end-to-end digital ecosystem,” positioning the company to serve India’s ongoing digital transformation.
Data center subsidiary IPO: SEBI observations received; size reiterated; timing depends on markets
Vijay Kumar said Sify has received final observations from SEBI on its DRHP for its data center subsidiary, Sify Infinit Spaces Limited, and that the company will time the issue and listing based on bankers’ guidance and market conditions.
Responding to a private investor identified as Sri Tulsidutt (who introduced himself as Srikanth), Vijay Kumar said there was “no deferment per se” other than awaiting bankers’ guidance on timing, adding that management has completed roadshows and approvals are in place.
Vijay Kumar also reiterated the IPO size disclosed in the DRHP: INR 2,500 crores of primary issuance and INR 1,200 crores as an offer for sale, describing it as a partial exit by growth capital partner Kotak, for a total of INR 3,700 crores. Asked what that implies for enterprise value, he said it would depend on the book-building process and would be visible in updated DRHP disclosures.
About Sify Technologies NASDAQ: SIFY
Sify Technologies Limited is an India‐based provider of integrated information and communications technology solutions, catering primarily to enterprise and government clients. The company's core offerings include network services, data center hosting, cloud computing, managed security, unified communications, and digital transformation solutions. Sify's end-to-end portfolio is designed to support critical IT infrastructure, enabling clients to scale operations, improve reliability, and accelerate technology adoption.
In the networking domain, Sify operates a nationwide IP‐MPLS backbone with extensive fiber infrastructure and a global internet peering footprint.
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