What is the current live, designed, and under-construction data center capacity, and will CapEx remain at current levels?

Live capacity is 134 MW, design capacity is 188 MW, 100 MW will be delivered this fiscal, and 150 MW is under construction. CapEx is expected to be higher for the remainder of the year. “So the capacity which is designed and ready is 188-megawatt the operational live revenue-generating capacity is 134 megawatts and the capacity, which will get delivered in this fiscal will be about 100 megawatts. And there is another 150 megawatts of capacity under construction. ... The CapEx is likely to be higher for the remaining part of this year as we get ready to deliver capacity for the customers.”

What differentiates Sify in the market, and what is the opportunity for edge data centers?

Sify differentiates through its 20+ years of market presence, integrated portfolio (data centers, network, cable landing stations), presence in key metros, and power availability. They are building 10-12 edge data centers in Tier 2/3 cities over the next few years, with 2 completed and 2 under construction. “No, I think there is some uniqueness with our -- in the market presence for about the time of more than 20 years. And the existing hyperscalers and the enterprises that makes us different. ... So our presence, we are billing strategically 2, 3 edge data center per year. That's what we are looking at.”

When will the 81 MW capacity signed last quarter start generating revenue?

Revenue generation will start from the end of Q2 FY27 and reflect significantly in Q3 and Q4 FY27. “it will start generating from end of quarter 2, but it will reflect significantly in Q3 and Q4”

SIFY

Sify Technologies (SIFY) Q1 FY27 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q1 FY27)· Information Technology· Jul 15, 2026

Source: earnings call transcript

Executive summary

Sify Technologies Q1 FY27 — Strong EBITDA Growth and Data Center Expansion

Sify Technologies reported a strong start to FY27, driven by significant growth in adjusted EBITDA and revenue, primarily from its Data Center Co-location and Network Services segments. The company continues to strategically invest in capacity expansion and network modernization to capitalize on India's digital transformation, particularly in AI and cloud-intensive workloads. While managing costs and optimizing cash flow, Sify is also actively pursuing an IPO for its data center subsidiary and exploring alternative funding for its substantial CapEx plans.

Highlights

Adjusted EBITDA increased by 42% year-over-year to INR 3,005 million.
Revenue grew by 15% year-over-year to INR 1,235 million.
Sold 5 megawatts of data center capacity during the quarter.
Increased fiber nodes by 7% year-over-year to 1,238 across the country.

Concerns

IT Digital Services revenue declined year-over-year and quarter-over-quarter, remaining negative EBITDA.
Data center EBITDA margins fell from 45% to 43% due to a one-off power tariff revision.

Guidance & targets

Category	Target	Timeline	Confidence
Data Center Capacity Delivery	about 100 megawatts high materiality	this fiscal year · FY27	High
Data Center Capacity Under Construction	another 150 megawatts high materiality	future	High
CapEx Outlook	likely to be higher medium materiality	remaining part of this year · FY27	Medium
Edge Data Centers Plan	about 10 to 12 edge data centers medium materiality	over the next few years	Medium
81 MW Signed Capacity Revenue Generation	start generating from end of quarter 2, but it will reflect significantly in Q3 and Q4 high materiality	Q2, Q3, Q4 · FY27	High
Revenue Generating Capacity (Next Year)	north of 220-230 MW high materiality	next year · FY28	High
Network Services Revenue Growth	reasonably good low materiality	next few quarters	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Network Services Expected to grow organically at a reasonably good pace. Percentage of total revenue: 39%	INR 481.65 million	—	—	—
Data Center Co-location Services EBITDA was largely flat despite revenue growth, due to a one-off power tariff revision impacting margins. The company is working to pass on costs to customers. Percentage of total revenue: 42%EBITDA margin: 43%Prior EBITDA margin: 45%	INR 518.7 million	—	10%	INR 292 million
IT Digital Services Experienced revenue decline and continued negative EBITDA. The company is focusing on services revenue and actively working to reduce losses and achieve profitability. Percentage of total revenue: 19%	INR 234.65 million	decline	decline	negative EBITDA

Risks & headwinds

Uncertainty in IPO timing for Sify Infinite Spaces Near-term

Market appetite for IPO is being evaluated by bankers.

Mitigation:Company is ready for listing; Kotak has offered equity support if IPO is delayed; other strategic investors have shown interest.

Impact of power tariff revision on data center margins Q1 FY27 (one-off)

One-off event, caused data center EBITDA margin to fall from 45% to 43%.

Mitigation:Working with customers to potentially pass on the increased cost.

Continued negative EBITDA and revenue decline in IT Digital Services Ongoing

Revenue declined YoY and QoQ, segment remains negative EBITDA.

Mitigation:Focusing on services revenue over project-based; active work to reduce losses quarter-on-quarter with board guidance for profitability soon.

Q&A highlights

What is the potential timing for the Sify Infinite Spaces IPO?

Bankers are actively evaluating the right market timing for the IPO, and the company is ready for listing once advised.

“As far as the IPO timing is concerned, the bankers are actively evaluating the right time where the market appetite will be good, and we'll appreciate the quality of the asset we are. From the company side, we stay ready for listing once the bankers advise us on going ahead.”

asked by Greg Burns · answered by M. Vijay Kumar

2 min read 5 chapters

Detailed narrative

India's Digital Transformation and Sify's Strategic Alignment

India's digital transformation is accelerating, becoming a business imperative for organizations investing in technology for productivity, resilience, and customer experience. Sify is aligning its investments with these long-term trends, leveraging progressive policy initiatives, expanding digital infrastructure, and a deep talent pool.

The company's integrated portfolio of data centers, network, and digital services supports customers in modernizing their technology environments and preparing for an AI-enabled future, positioning India as a global technology innovation hub.

Operational Foundation and Investment Strategy

Sify continues to strengthen its operational foundation through disciplined execution, improved resource utilization, and targeted investments. The company is expanding capacity, modernizing its network, and enhancing technology platforms to meet emerging demand from AI, cloud, and data-intensive workloads. While these investments influence depreciation, interest, and people costs, they are aligned with long-term growth objectives and supported by prudent risk management and financial planning, aiming to maintain a strong balance sheet and financial flexibility.

Data Center Expansion and Capacity Outlook

The data center business remains a key growth driver, with 5 megawatts of capacity sold in Q1 FY27. The company currently has 134 megawatts of operational, revenue-generating capacity and 188 megawatts of designed capacity. An additional 100 megawatts are expected to be delivered this fiscal year, with another 150 megawatts under construction.

Sify also plans to build 10 to 12 edge data centers in Tier 2 and Tier 3 cities over the next few years, with two already completed and two more under construction.

IPO and Funding Strategy for Growth

Sify is actively pursuing an IPO for its data center subsidiary, Sify Infinite Spaces, with bankers evaluating optimal timing. In the event of IPO delays, Kotak has committed to providing equity support for the company's growth initiatives. This strategic funding approach ensures that Sify can continue its significant CapEx investments, which are expected to be higher in the coming quarters, to meet customer demand and expand its infrastructure.

Digital Services Business Challenges and Focus

The IT Digital Services segment experienced a revenue decline year-over-year and quarter-over-quarter, and continues to report negative EBITDA. Management is actively working to reduce losses and achieve profitability by focusing on services revenue rather than project-based revenue. Despite the current challenges, there is a clear directive from the board to improve the segment's financial performance, with efforts already showing a reduction in loss compared to the previous year and sequential quarter.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.