Sify has announced results for second quarter of FY 2019-20.
Key performance highlights:
• Revenue for the quarter was Rs 5,807 million, an increase of 5 per cent over the same quarter last year.
• EBITDA for the quarter was Rs 1,061 million, an increase of 38 per cent over the same quarter last year. Considering IFRS16 leases adoption from April 1, 2019 the increase is 24 per cent on comparable basis.
• Profit before tax for the quarter was Rs 280 million, an increase of 11 per cent over the same quarter last year.
• Profit after tax for the quarter was Rs 191 million, a decrease of 25 per cent over the same quarter last year due to tax expense during the current quarter.
• CAPEX during the quarter was Rs 983 million.
• Cash balance at the end of the quarter was Rs 1,375 million.
Management commentary: Raju Vegesna, Chairman, said, “With the rapid adoption of digital technology across India, Global Enterprises and domestic players now see a market of 1.3 billion people who have to be quickly transitioned to the reality of a digital economy. In their pursuit to do so, they will draw upon the strength of local IT enablers who have the capability and local knowledge to execute. That is the opportunity in front of Sify today.”
Kamal Nath, CEO, said, “We continue to see increasing Cloud adoption in Enterprises as well as Government clients. Our investments, skills and partnerships are attracting clients who are renewing their erstwhile on-prem outsourcing, people heavy contracts and looking for hybrid or multi-cloud flavoured models. We are also able to bring in benefits to clients with our hyperscale network services which enables cloud adoption. The true value of Sify’s ICT services is being unleashed in Cloud transformation projects.”
M P Vijay Kumar, CFO, said, “With the focus on digital transformation, Enterprises are actively engaging for multiple ICT services for the operational benefits of our comprehensive set of services. We are seeing our managed services on top of the DC and Cloud as having the most traction among them. While we expand our capacity, both data centres and network infrastructure, we continue to exercise prudence in our capital investments. This financial year, the increase in depreciation and interest is partly due to IFRS 16 becoming applicable for leases and the tax expense is due to company being subject to income tax as the benefit of past losses has been utilized in full until last year. Our cash balance at the end of the quarter stands at INR 1375 Million.”
Key business highlights:
• Revenue from data centre centric IT Services fell by 4 per cent over the same quarter last year.
• Segment-wise, revenue from data centre services and cloud and managed services grew by 18 per cent and 30 per cent respectively, while those from technology integration services and application integration services fell by 32 per cent and 3 per cent, respectively.
• Revenue from telecom centric services grew by 16 per cent over the same quarter last year.
• Segment-wise, revenue from data and managed services grew 15 per cent while revenue from the voice business grew by 17 per cent.
Growth drivers:The primary growth driver in the market continues to be cloud adoption, led by digital initiatives and transformation. This trend is triggering movement of workloads from on-premise data centres to hyperscale public cloud and hosted private cloud in varied degrees, based on the digital objectives of the enterprises. This results in transformation of the traditional network architecture, and transformation at the edge which connects the end user. The need for digital services like analytics, data lakes, IoT, etc are shifting the balance to adoption of hyperscale public cloud vs private cloud. Collectively, these trends are generating opportunities for full scale cloud, DC and network service providers with digital services skills.
Key wins:Highlights of our major wins in the quarter include:
• Customers choosing Sify for migration of their on-premise data centre to multi-cloud platforms like Cloudinfinit, AWS and Azure. They also entrusted Sify with management and security.
• Customers choosing Sify as their DC hosting partner as they embrace hybrid cloud strategy.
• Customers choosing Sify as their digital services partner.
• Customers choosing Sify as their network transformation and management partner as they migrate to cloud-ready network.