Trúc Nguyen - Investor Relations Raju Vegesna - Chairman and Managing Director Kamal Nath - Chief Executive Officer Vijay Kumar - Chief Financial Officer.
Good morning and welcome to the Sify Technologies Limited Conference Call following the earnings announcement for the quarter ended June 30, 2015. At this all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.
I would now like to introduce your host for the conference Trúc Nguyen, Investor Relations for Sify Technologies. Please go ahead..
Thank you, Rob. Just to clarify, this is the conference call following the earnings announcement for the quarter ended September 30, 2015, not June. With that, I would like to extend a warm welcome to all 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 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 do not have a copy of our press release, please call me at 646-284-9418, and I will have one sent to you. Alternatively, you can obtain the copy of the release at the Investor Information section on the company’s corporate website at www.sifycorp, that’s 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 Investor Information section of the Sify corporate website. Some of the financial measures offered - referred to during this call and in the earnings release may include non-GAAP measures.
Sify’s results for the year are according to the International Financial Reporting Standards or IFRS and will differ somewhat to the GAAP announcements made in previous years.
A presentation of the most directly comparable financial measures calculated and presented in accordance with GAAP and a reconciliation of such non-GAAP measures and of the differences between such non-GAAP measures 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 conference 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 protections afforded by the Private Securities Litigation Reform Act of 1995. These risks include a variety of factors, including competitive development and risk factors listed from time-to-time in the company’s SEC reports and public releases.
Those lists 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 of Sify Technologies Limited, Raju?.
Thank you, Trúc. Good morning. Thank you for joining us on the call. Our sustained efforts at building a comprehensive ICT ecosystem is reflected in the results this quarter.
Within India, our broad portfolio and the cost competitiveness places us in a strong position to win multiyear contracts for Managed Services among enterprises looking for a technology refresh.
The new government’s call for a digital revolution is finding reasons [ph] among the different agencies who are adopting better methods of information dissemination through IT. State governments are also becoming increasingly aggressive in their push for IT with demand for multiple services.
While the Sify’s focus remains primarily on the enterprise market, this renewed interest from the government sector is pushing the overall demand for IT services forward and that Sify is well-positioned to take advantage of this opportunity.
The North America market is becoming - is beginning to gain traction with increasing references for our Managed Services. Our strategic alliance with Fujitsu announced last quarter will give us access to more clients and deeper engagements. In the time, we should see this complementing our historical Indian market position.
To reflect on the past quarter, I would now ask our CEO, Kamal Nath, to expand on some of the business highlights.
Kamal?.
Thank you, Raju. We have gained increased mindshare and wallet-share for our services in both existing and new customer base this quarter. We have also seen growth in public sector business as well as government sector business along with enterprise segment which is a very positive sign.
Our integrated ICT services continue to lead our growth along with the infrastructure transformation projects. Let me now spend some time on the business highlights for the quarter. I would start with Telecom business. Revenue from the data business grew by 20% over the same quarter last year.
Revenue from Internet grew over 20% over the same period last year. The business has signed up more than 200 clients during the quarter. Sify won a WAN transformation projection from a global auto-major that entails modernizing and implementing a secure high-performance Wide Area Network across all its locations.
This is Sify’s second win in the segment. A Network Integration and managed Wide Area Network deployment for a large public sector insurance company in India were also contracted during this quarter.
Sify continuous to see revenue growth in the e-commerce and logistics space as companies ramp up distribution in India prior to the start of the shopping season. A leading mobility data player in India contracted with Sify business for substantial international capacities through its cable landing station.
Sify also launched its sixth global Point of Presence in Dubai and a Network to Network Interconnect with a leading global telco to address the global data opportunity between India and the Middle East. As far as the Data Center Services business is concerned the revenue grew 17% over the same quarter last year.
Sify has signed up 11 new Data Center clients this quarter. A mobile digital payment platform startup and an existing player in the IT outsourcing signed up for Sify’s storage services. We also signed a large contract with one of India’s largest nationalized banks to provide disaster recovery for its internet banking.
We have completed the expansion of our Rabale Data Center with the completion of a dedicated substation providing 12.5 megawatt of utility power. Large repeat orders came in from existing BFSI and e-commerce clients too. Cloud and Managed Services business, in Cloud and Managed Services business the revenue grew 86% compared to the previous.
We have also signed up a large e-commerce backend player. The marketing and communication body for the insurance players in India signed up with Sify for a Data Center Transformation project. We also announced our strategic alliance with Fujitsu and began recognizing its first revenue this quarter.
Other contracts include the community arm of one of the India’s conglomerates, one of India’s largest online payment enabler, an aroma chemical player and a multinational farming tools major. As far as the Application Integration Services business is concerned the revenue recorded a 9% growth over the same quarter last year.
We have provided 10 new clients this quarter across different lines of businesses across India. We secured our first SAP HANA Infrastructure as a Service contract from a leading Indian cement company in eastern India. Sify announced its partnership with KRONOS, a leading global solution provider for Workforce Management Systems.
We have also signed three large Talent Management deals in this quarter, one from a leading government agency and two from large institutions in India. Technology Integration Services business line, this revenue grew over 3% over the last quarter.
Sify signed engagements to set up infrastructure services for a large public sector insurance company, a large public sector oil major and several state government departments. Our Security and Collaboration services have seen strong penetration across enterprise and public sector customers.
Large contracts won this quarter include one from a public sector insurance company to supply and deploy Data Center and Disaster Recovery IT Infrastructure and support for a 5 years of contract period. We have in total added 22 new clients across security, collaboration and network integration across the service lines.
I will now hand over - hand you over to Vijay, our CFO, to expand on the financial highlights of the quarter. Over to you, Vijay..
Thank you, Kamal, and good morning, everyone. I will now provide detailed financial results for the second quarter of financial year 2015-2016. Revenue for the quarter was INR 3,715 million, an increase of about 18% over the same quarter last year. EBITDA for the quarter was INR 663 million, an increase of over 43% over the same quarter last year.
Net profit for the quarter was INR 133 million, an increase of 48% over the same quarter last year. Capital expenditure during the quarter was INR 669 million. We have continued the positive trajectory over the past several quarters resulting in a healthy EBITDA and improved net profit.
This has come from the increased utilization of our assets on ground and the market demand for our services. That said, the aim for the remainder of this quarter continues to be to optimize our assets utilization while keeping a tight grip on our costs. Cash balance at the end of the quarter was INR 1,785 million.
I will now hand you over to our Chairman for his closing remarks.
Chairman?.
Thank you, Vijay. I am happy to note that the hard work of previous year and the good business coming from previous quarters we have built on, this points to the strength of our services portfolio and the market moving towards the consolidation.
Across the globe, enterprises are consulting with companies that have a complete picture of the emerging technologies landscape. That coupled with our comprehensive services booking is provisioning us the answer to the technology requirements.
The new wave of startups in India who use technology as the main differentiator to serve as a good platform to test and validate the strength of our services, and going by the demand of our services, we seem to be heading in the right direction, and there is a continuous lot of hard work needs to be done. Thank you for joining us on the call.
Now, I hand over to the operator for any questions.
Operator?.
Operator:.
Thank you, everyone, for joining us on the call. And we look forward to interacting with you through the coming year. Thank you and have a good day. Thank you again. Bye..
This concludes today’s teleconference. Thank you for your participation. You may now disconnect your lines at this time..