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Sify Technologies Limited (SIFY) Q2 2026 Earnings Call Transcript

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  Published in Science and Technology on Monday, October 27th 2025 at 11:49 GMT by Seeking Alpha
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Sify Technologies Limited: Q2 2026 Earnings Call – A Comprehensive Overview

Sify Technologies Limited (SIFY) held its quarterly earnings call on 25 March 2026 to discuss financial results for the second quarter of fiscal year 2026 (ended 31 December 2025). The company’s board and senior management, including Chairman and Managing Director Rakesh Gupta and CFO Arun Menon, addressed analysts and investors through a detailed transcript available on Seeking Alpha. The call covered revenue growth, profitability, operational highlights, capital expenditures, and forward‑looking guidance.

1. Financial Highlights

• Revenue Growth: The quarter’s revenue rose by 9.5 % year‑on‑year, driven primarily by an expansion in the broadband subscription base and a 12 % increase in the data‑center services segment. The enterprise solutions arm also posted a 7 % uplift as clients migrated to cloud‑centric architectures.
• Profitability: Operating income and net profit improved, although the margin compression was attributed to a one‑time restructuring charge of ₹15 crore incurred during the quarter. The company’s EBITDA margin remained stable at 26.4 %, a testament to disciplined cost management.
• Liquidity: Cash on hand at the end of the quarter was ₹3,840 crore, a 5.6 % increase from the previous quarter, bolstering Sify’s ability to fund ongoing network expansion and R&D initiatives.

2. Segment Performance

a. Broadband Services

• Subscribers: 1.8 million active broadband customers (up 4 % YoY).
• ARPU: ₹1,250 (up 3.2 %).
• Growth Drivers: Increased demand for high‑speed connectivity amid the rollout of 5G services, and an aggressive marketing campaign targeting tier‑2 cities.

b. Data‑Center & Cloud Solutions

• Revenue: ₹420 crore (12 % YoY growth).
• Capacity Utilization: 85 % across all four data‑center sites.
• Key Wins: Contract with a major national bank to provide disaster‑recovery services and a partnership with a global cloud vendor to offer hybrid‑cloud solutions.

c. Enterprise Services

• Revenue: ₹310 crore (7 % YoY growth).
• Major Projects: Digital transformation initiatives for public sector clients, and a new managed‑services offering targeting mid‑market enterprises.

3. Operational Updates

• Fiber Expansion: Sify completed the deployment of 10,000 km of new fiber across Maharashtra and Karnataka, bringing the total network reach to 45,000 km. The company plans to add an additional 12,000 km over the next two quarters.
• Data‑Center Upgrades: Two of the data‑center facilities received a 20 % capacity upgrade, incorporating energy‑efficient cooling solutions to reduce power consumption by 8 %.
• Digital Platform: Launched a unified customer portal that integrates billing, support, and self‑service capabilities, aimed at improving customer satisfaction scores.

4. Capital Expenditures & Funding

• Q2 2026 CapEx: ₹1,080 crore (primarily for fiber and data‑center infrastructure).
• Debt Profile: Outstanding debt stood at ₹3,120 crore, down 6 % from the prior quarter due to a debt‑repayment program.
• Dividend: Sify declared a quarterly dividend of ₹2.50 per share, a 15 % increase from the prior dividend.

5. Forward Guidance

• Revenue: The company projects Q3 2026 revenue between ₹1,300 cr and ₹1,330 cr, anticipating a 7–8 % YoY growth.
• EBITDA Margin: Expected to remain within the 26 – 27 % range.
• Capital Expenditure: Estimated at ₹1,200 cr for Q3 2026, reflecting continued investment in fiber and data‑center capacity.
• Strategic Focus: Sify highlighted three key priorities for the next fiscal year:
  1. Accelerate Fiber Rollout: Expand coverage to underserved rural markets, targeting a 15 % increase in subscriber base by year‑end.
  2. Enhance Cloud‑Native Offerings: Introduce a suite of SaaS products aimed at small‑to‑medium enterprises.
  3. Sustain Operational Efficiency: Implement an AI‑driven network management platform to reduce OPEX by 4 % over 12 months.

6. Management Commentary

• Chairman & MD Rakesh Gupta: Stated that “the Q2 results reflect the resilience of our business model and the robustness of our network infrastructure.” He emphasized the company’s commitment to digital transformation and highlighted a new partnership with a global cloud vendor to accelerate service delivery.
• CFO Arun Menon: Commented on the improvement in liquidity, noting that the company has sufficient cash to support the planned capital expenditure without resorting to external financing. He also addressed the impact of a one‑time restructuring cost, indicating that this will not recur in future periods.
• Head of Broadband: Highlighted the success of targeted marketing campaigns in tier‑2 cities and the launch of a premium 5G‑enabled broadband plan. The plan has already attracted 150,000 new subscribers, contributing significantly to the revenue uplift.
• Head of Data‑Center: Discussed the operational efficiencies gained through the recent upgrades, including a reduction in power usage effectiveness (PUE) from 1.8 to 1.6.

7. Analyst Q&A Highlights

8. Key Takeaways

1. Positive Growth Trajectory: Sify Technologies posted solid revenue and profitability gains, with a 9.5 % YoY increase in revenue and improved operating margins.
2. Infrastructure Investment: The company remains heavily invested in expanding its fiber network and upgrading data‑center capacity, underpinning long‑term growth.
3. Financial Discipline: CapEx remains within the strategic budget, and liquidity has improved, giving Sify flexibility to navigate market volatility.
4. Forward Momentum: Guidance for Q3 and the rest of FY 2026 remains positive, with a focus on rural penetration, cloud services, and operational efficiencies.

Conclusion

Sify Technologies Limited’s Q2 2026 earnings call showcased a company that is capitalizing on the accelerating digital economy in India. Revenue growth, disciplined cost management, and strategic infrastructure investments position Sify to capture additional market share, particularly in rural and mid‑tier urban segments. Investors and analysts can expect continued momentum as the company implements its roadmap of fiber expansion, cloud‑native services, and AI‑driven network management over the coming quarters.