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Sify Technologies Reports Revenues of INR 5509 Million For Second Quarter of FY 2018-19

PERFORMANCE HIGHLIGHTS

* Revenue for the quarter was INR 5509 Million, an increase of 14% over the same quarter last year.

* EBITDA for the quarter was INR 771 Million, an increase of 8% over the same quarter last year.

* Net Profit for the quarter was INR 253 Million, an increase of 25% over the same quarter last year.

* CAPEX during the quarter was INR 598 Million.

* Cash balance at the end of the quarter was INR 1466 Million.

FINANCIAL HIGHLIGHTS

Sify Technologies Limited
Unaudited Consolidated Income Statement as per IFRS
(In INR millions)
Quarter ended Quarter ended Quarter ended
Description September September June
2018 2017 2018
Revenue               5,509               4,840                4,683
Cost of Revenues              (3,470)              (3,067)               (2,845)
Selling, General and Administrative  Expenses              (1,268)              (1,057)               (1,097)
EBITDA                 771                 716                  741
Depreciation and Amortisation expense                 (384)                (524)                 (387)
Net Finance Expenses                 (175)                  (74)                 (134)
Other Income (including exchange gain)                   67                   85                    34
Other Expenses (including exchange loss)                  (26)                   –                   (53)
Profit before tax                  253                 203                  201
Income tax expense
Profit for the period                 253                 203                  201
 Profit attributable to:
Reconciliation with Non-GAAP measure
Profit for the period                 253                 203                  201
Add:
Depreciation and Amortisation expense                  384                 524                  387
Net Finance Expenses                  175                   74                  134
Other Expenses (including exchange loss)                   26                   –                    53
Income tax expense                   –                   –                    –
Less:
 Other Income (including exchange gain)                  (67)                  (85)                   (34)
EBITDA                 771                 716                  741

MANAGEMENT COMMENTARY

Mr. Raju Vegesna, Chairman, said, “We continue to see more Global and Domestic Enterprises contracting us for their pan-India implementation. These companies are able to leverage the maturity of our Telecom and Data Center business to shrink their go-to-market time. The Government’s aggressiveness on digitization is also continuing to open up opportunities for our broader set of services.”

Mr. Kamal Nath, CEO, said, “Our recent wins are an endorsement of our vertical go-to-market strategy that was introduced a year earlier. This is reflecting positively on our revenue mix, profitability and new order book. Recent public policy changes regarding proposed data protection regulations in India and the Central Bank’s directive on domiciling data in the country of origin is driving demand as more global players look at hosting their applications within India. Our “Cloud@Core” service lines are perfectly aligned to cater to these demands.”

Mr. M P Vijay Kumar, CFO, said, “We continue our investments, specifically in Data Center infrastructure and enhancement of our network and IT managed services portfolio. While our revenues continue to grow, we continue to focus on fiscal prudence in the face of a tightening market. Our cash balance at the end of the quarter stands at INR 1466 Million.”

CORPORATE COMMENTARY

Mr. Arun Seth has been appointed as Independent Director and Member, Audit Committee, subject to the approval of shareholders. A respected Telecom leader, Mr. Seth was the founding Managing Director of British Telecom in India and is an active evangelist of the software product eco-system. With his appointment, Sify is now fully compliant with the NASDAQ Listing Rule 5605 on the number of Independent Directors on the Board and Audit Committee. A detailed announcement will follow shortly.

BUSINESS HIGHLIGHTS

GROWTH DRIVERS

Indian enterprises are in the mode of accelerated adoption of cloud model to drive their digital transformation and digitalization initiatives. The cloud adoption is being driven by the need of scalability and flexibility need of DCs as well as the need for digital tools like Artificial intelligence, Advanced Analytics, IoT, Machine Learning. This trend is visible among almost all the verticals of the industry.

This is driving usage and monetization of cloud infra, data centers and cloud aligned network infrastructures- the areas where Sify has invested majorly in India.

Sify views its services business around cloud migration and management and cloud security to be an area of fast growth.

On the Telecom front, Sify’s Cloud and DC centric infrastructure was further expanded to include cloud interconnections with Google Cloud during the quarter and launch of the nx400G capable metro

infrastructure in the cities of Chennai and Bengaluru. Sify also augmented its wireless network across India, with 200 new base stations commissioned.

KEY WINS

A consolidated list of the key sign ups during the quarter is as below:

* 17 customers signed up to have their workload migrated from their on-premise DC to multiple clouds like Sify Cloud Infinit, AWS and Azure. These cover key verticals such as Power, Health, Technology, Finance Institutions and FMCG.

* 15 customers have signed up with Sify for greenfield cloud project implementation. These cover verticals such as Technology, Logistics, healthcare, Power, Fashion, Heavy Engineering, Chemicals etc.

* 14 new customers have signed up for Disaster Recovery as a Service (DRaaS) across verticals like Renewable Power, Chemical Engineering, Health, Technology, Automobile Finance, Infrastructure finance, Accounting and Logistics.

* 12 customers have contracted Sify to migrate their on-premise Data Center to Sify’s Data Center. These range from Insurance, Power Transmission, Media, NBFCs, Electrical Engineering etc.

* 8 new customers across Banking and Health and State Governments signed up for building Private Cloud at their Data Center.

* 4 new customers also contracted Sify for setting up of their Disaster Recovery center. These customers span verticals like Banking, Government and Insurance.

* 9 new customers signed up for Information Security services covering verticals like the Central Government Power sector, State Government, Banking etc.

* 6 new customers signed up for Digital encryption.

* 3 new customers across Defence and the Government signed up for cloud based online test this quarter.

* The Telecom Centric Services added 427 new customers in the quarter.

* Key wins in the quarter include a leading FMCG company in India that outsourced its Wide Area Network to Sify.

* Sify won a Managed WiFi contract from two leading manufacturing conglomerates in India. The edge/WiFi deployment will cover multiple locations for both customers across the country in the next few quarters.

* Sify’s managed and secure SD-WAN offering has seen early traction in the market place with wins across the pharmaceutical and manufacturing verticals.

* Other notable wins in the quarter include contracts for Inter-cloud connectivity for a leading Asian cloud provider.

* Sify also won a large contract to build a network for a European technology provider that will connect their multiple sites in India as well as across the globe. – CT Bureau

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