Sify Technologies Limited (NASDAQ:SIFY)
F3Q 2013 Results Earnings Call
January 28, 2013 8:30 AM ET
Christopher Chu - Grayling Investor Relations
Raju Vegesna - Chairman
Kamal Nath - Chief Executive Officer
M. P. Vijay Kumar - Chief Financial Officer
Greetings. And welcome to the Sify Technologies Financial Results for Third Quarter Fiscal Year 2012-2013. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions)
It is now my pleasure to introduce your host, Christopher Chu. Thank you, Mr. Chu. You may now begin.
Thank you, Operator. I would like to extend the warm welcome to all of our participants on behalf of Sify Technologies Limited. I'm joined on the call today by Raju Vegesna, Chairman; Kamal Nath, Chief Executive Officer; and Mr. M. P. Vijay Kumar, Chief Financial Officer of Sify Technologies.
Following our comments on the results, there will be an opportunity for questions. If you don’t have a copy of our press release, please call Grayling at 646-284-9400 and we'll have one sent to you.
Alternatively, you may have a copy of the press release at the Investor Information section at the company's corporate website at www.sifycorp.com.
A replay of today's call may be accessed by dialing in on the numbers provided in the press release or by accessing the webcast in the Investors Information section of the Sify corporate website.
Some of the financial measures referred to during this call and in the earnings release may include non-GAAP measures. Sify's results for the year are according to International Financial Reporting Standard or IFRS, it will differ somewhat from the GAAP announcements made in previous years.
Our presentation of the most directly comparable financial measures calculated and presented in accordance with GAAP and a reconciliation of such non-GAAP measures and other differences between such non-GAAP measures are -- and the most comparable financial measures calculated and presented in accordance with GAAP will be made available on Sify's website.
Before we continue, I would like to point out that certain statements contained in the earnings release and on this call are forward-looking statements rather than historical facts and are subject to risks and uncertainties that could cause actual results to differ materially from those described.
With respect to such forward-looking statements, the company seeks protection afforded by the Private Securities Litigation Reform Act of 1995. These risks include a variety of factors, including competitive developments and risk factors listed from time to time in the company’s SEC reports and public releases.
Those list are intended to identify certain principal factors that could cause actual results to differ materially from those described in the forward-looking statements, but are not intended to represent a complete list of all risks and uncertainties inherent to the company's business.
I would now like to introduce Mr. Raju Vegesna, Chairman and Managing Director of Sify. Raju?
Hi. Thank you, Chris. Good morning. Thank you for joining us on this call. As an organization since we have continuously aligned itself to new demand of our -- of an evolving markets.
On one side we are seeing a demand for a company IT solutions then on the other side demand continues to increase our robust network connectivity and data center capacity to deliver this products.
It is beginning to reap rewards as we see strong growth around our network and increasing levels of engagement of our managed services. It is also partly because of the industry moving towards the consolidation of services from various service providers.
And as a service provider, who get us to the entire ecosystem of product and services, we are finding ourselves increasingly called on -- call up on to deliver the solutions. This is helping us to win some of the major governments and private sector projects.
And we are also found a new market of, started growing in India that is SMB market and this, providing the kind of solutions what we created for enterprise, we are also providing existing solutions to SMB market and that has also started giving us a revenue. And our continued commitment of the government and state -- both state and union level also started seeing some fruitful.
So now -- I would now request our CEO, Kamal Nath to explain the operational highlights of the quarter. Kamal?
Yeah. Thank you, Raju, and good morning, everyone. As part of our plan laid out during the last quarter, we have restructured our go-to-market strategy around our Sify 3.0 objective.
We had already sensed a shift in the market space from a traditional procurement of IT infrastructure model to subscription of IT infrastructure model and I’m happy to share that the combined strength of our offering like Cloud Infinit along with our Private Cloud solutions on a services model has received significant response from enterprises, who are increasingly looking at IT infrastructure solutions, which would offer them flexible, valuable and cost effective model with faster deployment options.
Our Disaster Recovery on cloud services model is being seriously evaluated by enterprises who are shying away from setting our Disaster Recovery infrastructure in the past because of both cost and complexity.
This particular trend and our readiness have put Sify as a premium contended and alternative against the traditional players whose model is kept Sify with little or no variability in that.
The above is automatically resulting into customer getting integrated solutions on Sify combining all towers of IT infrastructure, over and above the core data center and network player which Raju had mentioned. This is precisely what we envisage while laying down our Sify 3.0 objectives.
Our next important task could be to build strategic partnership with leading application providers with a view to becoming relevant to our clients right from the business and applications player.
Now allow me to spend a few minutes on individual highlights of this quarter, we have quite few of them. Overall, the network services grew a credible 10% over last quarter. Data was a big performer, this quarter with the strong 17% growth in new orders over the same quarter last year.
Our network now reaches more than 1000 towns and cities in India. Wholesale Voice had also grown big with an approximately 20% growth over last quarter. We’ve got recognition for our connectivity service from the banking community with Vision 2012 awards for Best Connectivity Partner.
Monetization of EIG and Cable Landing has commenced in a big way with one of India’s largest broadband player signing up a large capacity deal with Sify. The business also has launched Disaster Recovery-as-a-Service and Business Continuity Management on the Cloud platform, which we have already mentioned in the initial part of my statement.
Managed services both on the infrastructure and platform has also had a good head start with large strategic accounts which we won. Hosting business has grown 4% over last quarter, that’s almost 22% over the same quarter last year.
We’ve also won a large multi-year hosting services contract from a top Indian software major thereby strengthening our relationship and ensuring future revenue with that software services company.
Sify.com registered a robust 45% growth compared to the same quarter last year. Sify eLearning has also grown 20% over the previous quarter. And from a recognition perspective, we have won the Asian Learning Leadership Award for the most innovative new product and a second Brandon Hall award this year for Best Advance in Mobile Technology.
The uniqueness of our Aadhar certification platform built for UID has also won in the eIndia summit award for this year. So we have accomplished quite a few things in this quarter and we hope to do many more in the coming quarters for your next talk.
So I now hand over to Vijay, our CFO to take all of you through the international highlights of this quarter. Over to you, Vijay.
M. P. Vijay Kumar
Thank you, Kamal and good morning everyone. I will now provide detailed financial results for the third quarter of financial year 2012-13. Sify reported revenues of INR 2222 million for the quarter-ended December 31, 2012 against revenues of INR 1805 million for the corresponding quarter of the previous year growth of 23%.
EBITDA for the quarter increased to INR 206 million as compared to INR 135 million in the corresponding quarter of the previous year. Net loss for the quarter was INR 56 million as against the net loss of INR 74 million in the corresponding quarter previous year.
Capital expenditure during the quarter was INR 296 million and cash balance at the end of the quarter was INR 811 million. As earlier stated, we have won one of the largest government order in network integration in recent times, which you’ll see significant capital and operating expenditure to support the same.
As a company, we will continue to invest substantially in the best of technology as it’s evidenced from our new data center in Delhi and Mumbai. Of course, we are cognizant of the substantial challenges facing the telecom industry in India. So we continue to adhere to our ingrained fiscal discipline, both in our operating expenses and major capital investments.
I will now hand you over to our Chairman for his closing statements. Raju?
Thank you, Vijay. As my management team rightly put it, Sify as a company is maturing into services and solution leader, on top of our strong building blocks both networking and data centers.
Our focus is clearly under following, build a flexible and robust data center products and services, ensure that given emerging enterprises can be benefited for the SME market from enterprise cloud solutions, be present in almost all the spheres of the IT ecosystem, ensure speed and scalability across the offering and backing up with solid SLAs.
Our current business shows us we are under right track and to keep the speed under focus. I will now hand over to our -- hand over to the operator for any questions.
(Operator Instructions) Since there are no questions, I’ll turn the floor back to our management for any further closing comments.
With that, thank you and hope to see you again until then good bye.
Thank you. This does conclude today’s teleconference. You may disconnect your lines at this time and have a wonderful day. We thank you for participation today.
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