Sify(US:SIFY)2019-07-24 18:25Financial Data and Key Metrics Changes - Revenue for the quarter was INR 5,518 million, an increase of 18% over the same quarter last year [16] - EBITDA for the quarter was INR 874 million, an increase of 18% over the same quarter last year; however, on a comparable basis considering IFRS 16, the increase is 5% [16] - Net Profit for the quarter was INR 216 million, an increase of 8% over the same quarter last year [17] - Capital expenditure during the quarter was INR 1,407 million [17] - Cash balance at the end of the quarter was INR 1,568 million [17] Business Line Data and Key Metrics Changes - Revenue from Data Center centric IT Services grew by 26% over the same quarter last year; specifically, Data Center Services grew by 13% and Technology Integration Services grew by 92%, while Cloud and Managed Services fell by 4% and Applications Integration Services fell by 5% [11] - Revenue from Telecom centric services grew by 13% over the same quarter last year, with Data and Managed Services growing by 12% and Voice business growing by 16% [12] Market Data and Key Metrics Changes - The primary growth driver in the market continues to be cloud adoption, led by digital initiatives and transformation [13] - There is a shift towards hyperscale Public Cloud and hosted Private Cloud based on enterprises' digital objectives [14] Company Strategy and Development Direction - The company is focused on enabling enterprises to adopt Cloud and is well-positioned to assist in this transition through its Cloud@Core service lines and alliances with global players [10] - The company aims to be a relevant partner to enterprises in an ecosystem where data residency and localization policies are evolving [18] - The company is optimistic about the pro-industry measures from the Indian government, which are expected to accelerate growth opportunities [9][45] Management's Comments on Operating Environment and Future Outlook - Management noted that the new Indian government continues to support pro-industry measures, which is beneficial for both domestic and multinational companies [9] - The company is seeing a strong demand for cloud services, with many CIOs focusing on cloud adoption [31] Other Important Information - The tax benefit from past accumulated losses has been fully utilized, and the net profit for the quarter is after tax expense [19] - The company has about 10 data centers, with six fully monetized and the remaining four being built in a modular manner [26][46] Q&A Session Summary Question: What tax rate should be modeled for the company? - The tax rates are about 34%, but the effective tax rate is around 30% considering some tax benefits on accelerated depreciation [22] Question: What is the projection for CapEx for the full year? - CapEx should be in the same order as the quarterly expense [23][25] Question: How many data centers are currently operational and what is their capacity utilization? - There are about 10 data centers, six are fully monetized, and the others are being populated in a modular manner [26] Question: What is the current debt level and interest expense? - Net borrowings are approximately INR 5,500 million, and the interest expense is expected to remain in the same order as the last financial year [34][36] Question: Is there seasonality in revenue for the first quarter? - Historically, the first quarter tends to be lower than the preceding quarter due to customer order momentum picking up in the second and third quarters [38] Question: How does the company benefit from alliances with global cloud providers? - The company collaborates with global players like AWS and Azure to help customers migrate to hyperscale cloud providers, providing high-speed connectivity and management services [39][40] Question: What is the revenue ratio between data center centric and telecom centric services? - The revenue is approximately 58% from telecom centric services and 42% from data center centric services [58]