Sify Technologies has reported revenue of Rs 22,952 million in the financial year (FY) 2019-20, an increase of 7 per cent over the last year.

Further, earnings before interest, taxes, depreciation and amortisation (EBITDA) for the year stood at Rs 4,076 million, an increase of 31 per cent over the last year. Profit for the year was Rs 706 million, a decrease of 34 per cent over the last year.

Capex during the year was Rs 4,405 million and cash balance at the end of the year was Rs 2,651 million.

For the quarter ended (QE) March 2020, Sify reported a rise in revenue to Rs 5,736 million from Rs 5,623 million in QE March 2019. Further, profit for the quarter reduced to Rs 134 million from Rs 303 million in QE March 2019. Moreover, the company’s EBITDA stood at Rs 1,038 million during the QE March 2020.

Commenting on the development, Raju Vegesna, Chairman, Sify Technologies, said, “Every adversity presents an opportunity to rethink the way we do business. For some time now, Sify has been increasing the level of automation across our entire suite of services. And during the ongoing lockdown period, we have been able to perform remote commissioning and maintain high service levels without any major impact. I am incredibly proud of my team who are continuing to rise up to the challenges faced by our clients every day. The biggest lesson for the market from this lockdown is that there is no escaping the digital economy of tomorrow. Sify’s future is in enabling that for our clients.”

Further, Kamal Nath, chief executive officer (CEO), Sify Technologies, said, “The current scenario under lockdown has created challenges in the short term and opportunities in the mid and long term for us. As a Service Provider, we are currently addressing the upgrade and downgrade requirements of customers, based on the demand. We are remotely managing the mission-critical infrastructure of customers who are serving the core industries and consumers. The current situation has also stimulated conversations with customers on the need for scalable, flexible IT infrastructures that can be consumed on-demand. We are seeing the Cloud skeptical customers showing enthusiasm on cloud adoption to ease their capex cost and cash flow. Organisations are reviewing how to provide secured and productive “work from home” deployment. As a Digital ICT Service Provider, we see this as an opportunity to further boost the utilisation of our investments and enhancement of our services revenue.”

Meanwhile, M P Vijay Kumar, chief financial officer (CFO), Sify Technologies, said, “We had the reasonably good year 2019-20. The EBITDA growth has been healthy, while we continue to spend for the future – both in people and tools to increase our digital transformation service capabilities. The net profit is lower as the company is now subject to full taxes as past tax benefits have expired. As global trade shrinks substantially and overall demand and supply chain recovery is expected to take time, we are preparing the organisation for new contracts to be slow to conclude as some of our clients are likely to take time to regain their momentum in the market. We continue to carefully manage our costs while ensuring that services to customers and their experience remain the best. We stay committed to our data center, cloud, and network-centric expansion projects, and will exercise due caution in terms of both timing and cost structure of these projects. Considering the economic conditions and uncertainty on the timing of the economy normalising, the Board did not recommend the payment of dividend this year and instead advised capital to be conserved and used for financing expansion projects. Cash balance at the end of the year was Rs 2,651 million.”

Business Highlights

  • Revenue from data center centric IT Services grew by 3 per cent over last year.
  • Segment-wise, revenue from data center services grew by 21 per cent, cloud and managed services grew by 9 per cent, while technology integration services and applications integration services fell by 13 per cent and 2 per cent respectively over last year.
  • Revenue from network-centric services grew by 9 per cent over last year.
  • Segment-wise, revenue from data and managed services grew by 12 per cent and voice business grew by 4 per cent over last year.

Growth Drivers

The current situation resulting from the nationwide lockdown has curtailed industry growth, and we expect customers to spend mostly on “must-have” services, and not on “nice to have” services, as we emerge from the lockdown. Customers will look for technology and contracts which are flexible and agile. Overall, service providers whose business models are consumption-based will get more attention from customers. Service Providers who can deliver “cost benefits” will have an advantage in customer engagements more than ever. cloud services, network access services, security services, and e-learning would be the prime growth area for Sify, albeit post-lockdown.

Key wins and business highlights

  • Four prominent customers signed to have their workload migrated from their on-premise DC to multiple cloud platforms, including Cloudinfinit, AWS, Azure, and OCI. These cover key verticals, such as a Non-Banking Finance Company, Insurance, IT & ITeS, Retail, Heavy Engineering, and Chemicals.
  • Six major clients signed up for greenfield cloud implementation from verticals such as Microfinance, NBFC, Software testing, and Media.
  • Nine major contracts were concluded for Disaster Recovery as a Service. Among them were clients from OTT, PSU, Broadcast management, Technology solutions, and Digital Wallet.
  • Two major customers, one of India’s largest retail finance operators and one of the nation’s largest distillers, moved from competitor DC to Sify DC, while five customers moved from their on-premise DC to Sify DC across Banking, Health, Plastic Engineering, and HR automation verticals.
  • Seven clients signed up to have their Data Centers modernised, while one of them also contracted Sify to commission their DR.
  • Four clients contracted for Managed Services across NBFC, ITeS, and OTT.
  • The e-Learning business gained multiple clients, including an International investment bank, an office automation major, corporate finance lender, and an Indian Multinational conglomerate.
  • Two PSU’s from Energy and Insurance, one of the largest private automobile companies, an International Bank, and multiple Retail operators contracted for Digital certification services.
  • Among the top clients who signed up for our Cloud-based supply chain management solution included companies in the Energy, Retail and Pharmaceutical verticals.
  • More than 2.8 million cloud-based tests were delivered for multiple arms of the Government and one of the Armed forces on a continuing contractual basis.
  • Network-centric Services added 328 new customers in the year across various verticals and segments.
  • During the year, there was significant investment and expansion of the next generation fiber access networks across 6 key markets covering Data Centers, SEZs, and Commercial Business Districts. Revenue growth has largely been driven by customer and network acquisition on fiber.
  • A significant contract was concluded with a large Public Sector Financial Institute for a pan-India refresh of their WiFi connectivity.
  • The Network Integration vertical had key wins with a multi-year deal from a leading PSU bank and a Public Sector Insurance Company.
  • During the year, Sify expanded its GlobalCloudConnect (GCC) platform to provide enterprises with high-performance networks to enable hybrid-multi cloud on all major hyperscale platforms across the key metros.
  • Sify continued to see wins in the SD-WAN category – these have come across multiple verticals, including BFSI and FMCG.
  • The business also saw steady progress in its internet of things (IoT) business. The focus around branch energy management saw wins largely in the retail sector.