Sify(SIFY) - 2025 Q4 - Annual Report

Revenue Performance - Revenue for fiscal 2025 increased by ₹ 4,252 million ($49.68 million), representing an 11.93$13.08 million), primarily due to increased capacity from existing and new customer engagements[337] - Data Center Services revenue increased by ₹ 3,142 million ($36.71 million) due to new contracts and higher capacity utilization by existing customers[338] - Digital Services revenue decreased slightly by ₹ 9 million ($0.11 million), reflecting a 4% decline compared to the previous year[336] - Revenue from Digital Services decreased by ₹9 million ($0.11 million), primarily due to a ₹410 million ($4.79 million) decline in Application Integration Service and a ₹155 million ($1.81 million) decrease in Cloud and Managed Services, partially offset by a ₹556 million ($6.50 million) increase in Network Managed Services revenue[340] Cost and Expenses - Cost of sales as a percentage of revenues decreased from 62.80% in fiscal 2024 to 62.47% in fiscal 2025[335] - Selling, general and administrative expenses increased to 18.66% of revenues in fiscal 2025, up from 18.13% in fiscal 2024[335] - Total cost of sales increased by 11.35% to ₹24,917 million ($299.00 million), with significant increases in Network Services (11.50$5.80 million), driven by higher repairs and maintenance and network operating costs, resulting in a total Selling, General and Administrative expense increase of 15.17%[348] Profitability - Profit from operating activities decreased to 5.66% of revenues in fiscal 2025, down from 6.73% in fiscal 2024[335] - Net profit for the year was a loss of ₹ 1,197 million ($14.06 million) in fiscal 2025, compared to a profit of ₹ 1,000 million ($12.00 million) in fiscal 2024[335] - Net profit decreased to a loss of ₹785 million ($9.50 million), a decline of 564.50$474.00 million), with ₹7,342 million ($88.00 million) due within 12 months[368] - The company reported a negative working capital of ₹1,106 million ($13.00 million) as of March 31, 2025, despite having cash and cash equivalents of ₹4,671 million ($56.00 million)[365] - As of March 31, 2025, cash and cash equivalents totaled ₹4,997 million in bank accounts and ₹1,761 million in bank deposits, with restricted cash deposits amounting to ₹454 million[373] Cash Flow - Net cash generated from operating activities for the year ended March 31, 2025, was ₹8,647 million (US$101.04 million), an increase attributed to higher trade payables and contract liabilities[374] - Net cash used in investing activities for the year ended March 31, 2025, was ₹12,324 million (US$144.00 million), primarily for data center facilities and renewable energy investments[377] - Net cash generated from financing activities for fiscal year 2025 was ₹4,730 million (US$55.27 million), driven by borrowings of ₹12,894 million (US$150.67 million) and proceeds from share issues[381] Capital Expenditure - Capital expenditure for the year ended March 31, 2025, amounted to ₹15,486 million (US$180.95 million), funded through internal accruals and bank borrowings[385] Investments and Agreements - SISL entered into a Debentures Subscription Agreement with KDCF, receiving an investment of ₹6,000 million (approximately US$72.23 million) for data center expansion and renewable energy investments[372] Revenue Recognition - Revenue from data center services is recognized over time as services are performed, with distinct performance obligations[398] - Revenue from digital services, including cloud and managed services, is recognized as related services are performed, with fixed contracts for a specified period[400] - Revenue from Applications Integration Services is recognized over time, measured by the amount of time/effort spent on a project[406] - Revenue from commissions on electronic commerce transactions is recognized upon transaction completion[407] - The Group allocates transaction prices to performance obligations based on relative stand-alone selling prices[409] - Incremental costs of obtaining a contract are recognized as assets and amortized over the contract period if expected to be recovered[411] - Lease rentals from operating leases are recognized on a straight-line basis over the lease term[413] - Upfront payments for Indefeasible Right of Use (IRU) arrangements are treated as deferred revenue, recognized on a straight-line basis over the term[414] Risk Management - Market risk management is conducted through a corporate treasury department that evaluates and controls market risk exposure[723] - The Group's exposure to market risk is influenced by investment and borrowing activities, as well as revenue generation in foreign currencies[723] Other Financial Information - Other operating income decreased by ₹14 million ($0.16 million), mainly due to a ₹66 million ($0.77 million) drop in Miscellaneous income, offset by a ₹52 million ($0.61 million) increase in interest income[341] - EBITDA increased by ₹806 million ($9.66 million) to ₹7,562 million ($91.00 million), reflecting an 11.93% growth due to increased revenue[353] - Depreciation and amortization expenses rose by ₹860 million ($10.05 million) to ₹5,633 million ($68.00 million), an 18.02% increase attributed to the capitalization of new assets[357] - Finance expenses increased by ₹540 million ($6.31 million) to ₹2,744 million ($33.00 million), primarily due to higher interest on borrowings[360] - Contractual cash flow for long-term obligations as of March 31, 2025, is projected at ₹32,144 million (US$375.60 million) over various time frames[384] - Impairment analysis for trade receivables is performed at each reporting date using a provision matrix based on historical loss rates[424] - Deferred tax assets are recognized to the extent that it is probable future taxable profits will be available against which the temporary difference can be utilized[433] - The company does not engage in research and development activities[386]