Sify Technologies (NASDAQ:SIFY) reported third-quarter fiscal 2025-26 results and outlined ongoing investments in data centers, network infrastructure, and digital platforms, as executives pointed to rising enterprise and government demand in India for “secure and high-performance and sovereign digital infrastructure” tied to cloud and AI adoption.
Management frames demand around India’s digital infrastructure buildout
Chairman Raju Vegesna said India’s “growth story has moved decisively from promising to performance,” citing strong economic fundamentals, policy continuity, and accelerating digital adoption. He described India’s IT sector as entering a new phase focused on leadership in digital infrastructure, cloud, and AI-led innovations.
Quarterly business mix and operational metrics
Executive Director and Group CFO M.P. Vijay Kumar said Sify continued to emphasize fiscal discipline while making “measured investments” across data centers, networks, and people to support long-term value creation.
For the quarter, management described the revenue split as:
- Network services: 37%
- Data center colocation services: 40%
- Digital services: 23%
Vijay Kumar said 9.1 megawatts (MW) of data center colocation capacity was sold during the quarter. As of Dec. 31, 2025, the company’s network services operated via 1,214 fiber nodes, up 9% year over year, and Sify had deployed 9,695 SD-WAN service points across India.
Financial results: revenue and EBITDA growth, continued losses
For the third quarter of fiscal 2025-26, Sify reported revenue of INR 11,596 million, up 11% from the same quarter last year. EBITDA was INR 2,470 million, up 29% year over year.
The company reported a loss before tax of INR 2,570 million and a loss after tax of INR 3,290 million. Capital expenditure during the quarter totaled INR 3,452 million, and the cash balance at the end of the quarter (Dec. 31, 2025) was INR 3,627 million.
Data center capacity, ramp timing, and margin drivers
In response to analyst questions, management provided additional detail on current capacity and the construction roadmap. The company said total design capacity is 188 MW. Of that, capacity “ready for service” is 130 MW, and total sold capacity is about 127 MW.
Management said two facilities in its Rabale data center campus are expected to go live in the current calendar year and have already been contracted with customers. In addition, two other projects under construction are expected to be delivered mid-calendar 2026 and mid-calendar 2027. The aggregate capacity for the four facilities discussed was described as about 125 MW, while noting actual customer deployments could rise as AI workloads increase density.
On the pace of filling new capacity, management said recent experience in Mumbai suggests new design capacity can become “fully populated” in about 15 months. In other cities, where facilities are built to demonstrate scalable future capacity, it can take three to four years—though a hyperscaler customer can accelerate the ramp.
On margins in the data center business, management said EBITDA margins are typically consistent around 44% to 45%, with quarter-to-quarter fluctuations of 100 to 200 basis points. Executives attributed those movements primarily to ramp timing—capacity revenue can begin before power-related revenue scales over six to nine months as customers increase IT power consumption. Management also said it was not seeing pricing pressure from either hyperscaler or enterprise customers, emphasizing that availability of capacity on time and operational quality were key buying criteria.
Infinite Spaces IPO timing, structure, and use of proceeds
On the planned IPO of Sify Infinite Spaces, management said the draft prospectus was filed in mid-October 2025 and that securities regulator approval typically takes three to four months. The company said it expected approval of the draft prospectus “this month,” after which it would update the draft with financials as of Dec. 31 before proceeding, guided by bankers, on timing for opening the issue and listing.
Management described Sify Infinite Spaces as a 100% subsidiary of Sify Technologies and said separate financial statements are available on the company’s website and in IPO documents. On proceeds, management said the primary portion would be used for data center expansion, with a portion used to retire existing loans that would later be replaced with lower-cost, longer-term infrastructure debt.
Later in the call, management said the primary capital being raised is INR 2,500 crores, alongside an offer for sale of INR 1,200 crores from capital partner Kotak (with ADIA and GIC as limited partners), for a total issue size of INR 3,700 crores. Management also said existing ADR holders would not receive priority allocation due to legal framework constraints, though U.S. shareholders could participate through a non-resident (NRE) account in India.
Network services and cable landing station partnership with Google
Addressing a question on relatively flat network revenue, management cited price corrections for existing customers and a shift from MPLS to internet connectivity driven by technologies such as SD-WAN and SASE, which lowers price realization. Management said it seeks to manage costs to protect margins and noted that volumes increased even if revenue looked “a little flattish.” Executives said they still expect the network business to grow alongside the data center business, though likely at a slower pace given higher data center growth momentum.
Management also discussed a partnership with Google related to a cable landing system on India’s eastern side. Sify said it operates a carrier-neutral cable landing station in Mumbai and was selected as a partner for setting up a cable landing station in Vishakhapatnam where Google’s cable will land, within an “edge data center” Sify is developing there. Management said the cable landing station investment itself is not material financially but is strategically important, and that the larger investment is carrying capacity from the landing station to Google’s own data center in Vishakhapatnam—an investment that is “largely funded by the customer themselves” and not expected to be balance-sheet heavy for Sify.
Digital services losses and break-even expectations
Management acknowledged the digital services segment continues to operate at a loss. Executives said they “should hopefully become break-even” in the latter part of fiscal 2026-27, with profitability dependent on market scale-up for new offerings. Management said actions planned over the next three to four quarters include focusing revenue efforts on two to three core service areas—cloud and managed services, network managed services, and security managed services—while developing AI Ops capabilities for differentiation and repurposing resources away from offerings with more limited scale opportunities.
Accounting policy note on depreciation and equipment life
On depreciation, management said Sify uses an average depreciation policy of eight to 10 years to align with its pricing model, which assumes eight to 10 years of capital recovery. However, management said most power equipment can last “north of 15 years,” with certain items such as UPS and batteries being exceptions.
AI readiness, liquid cooling, and incremental costs
Management said data centers brought online since 2024 are NVIDIA-certified and capable of hosting liquid cooling systems, and that new Rabale facilities would have liquid cooling “right from day one.” The company said commercial arrangements vary by contract: in some cases Sify incurs the cost and charges customers via capacity charges, while in other cases customers invest and Sify enables the deployment. Management said the incremental cost for liquid cooling is approximately $1.3 million per MW.
About Sify Technologies (NASDAQ:SIFY)
Sify Technologies Limited is an India‐based provider of integrated information and communications technology solutions, catering primarily to enterprise and government clients. The company’s core offerings include network services, data center hosting, cloud computing, managed security, unified communications, and digital transformation solutions. Sify’s end-to-end portfolio is designed to support critical IT infrastructure, enabling clients to scale operations, improve reliability, and accelerate technology adoption.
In the networking domain, Sify operates a nationwide IP‐MPLS backbone with extensive fiber infrastructure and a global internet peering footprint.
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