Shiwei Yin – Investor Relations Raju Vegesna – Chairman Kamal Nath – Chief Executive Officer M.P. Vijay Kumar – Chief Financial Officer.

Greg Burns – Sidoti & Company Ben Klieve – Noble Financial.

Greetings and welcome to the Sify Technologies Financial Results for Third Quarter of Fiscal Year 2017-2018. At this time, 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’d now like to turn the conference over to Shiwei Yin. Please go ahead..

Thank you Rob. Hi, everyone, I’d like to extend a 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 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 646-284-9474 and I’ll send copy for you. Alternatively, you may obtain a copy of the release at Investor Information section of 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 Investor Information section of the Sify corporate website. Some of the financial measures referred to during today’s 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 it will differ somewhat from 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 developments 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.

Sir?.

Thank you, Shiwei. Good morning everyone. Wish you a Happy New Year and thanks for joining us on the call. We remain encouraged by the response of Domestic and Global Enterprises to our subscription and outcome-based services.

They are beginning to see the merits of consolidated their IT needs with service providers like us, who can extend the full range of ICT solutions. Public policy and measures undertaken by the Indian government thus far are the positive for large-scale digital transformation projects, both from private enterprise and the public sector.

Let me now, I will include Kamal, our CEO to expand some of the business highlights for the past quarter.

Kamal?.

Yes. Thank you, Raju. Our growth is being driven by our continuous enhancement in data center centric IT services which for the first time has gained more wallet share than our telecom services in our overall revenue mix.

Our continuous pitch of integrated IT services and telecom services both aligned to cloud and digital consumption model, have been significant differentiators for Sify, as more clients migrate to the cloud platform and adopt digital model of doing business.

As we done with the last two quarters, allow me to present business results under the following categories. Category A, telecom-centric services and category B, data center centric IT services. I will start with the telecom centre centric services. Revenue for the data and managed services business grew 11% over the same quarter last year.

Overall, revenue for telecom business grew 2%, primarily due to a reduction in revenue from India voice termination business. Key wins during this quarter include a large public sector bank, an insurance company, a state power distribution company and global R&D and engineering company.

Sify’s focus on OTT/content providers continues to deliver growth with a large win from a fast-growing global CDN player. The contract covers offerings around the network, colocation and the internet exchange lines of business. Sify also had two key wins in the network transformation and outsourcing category.

A leading logistics company outsourced its network and security management and a leading financial services company signed up to transform and manage their network.

Other key contracts won in this segment were from a global manufacturing and engineering conglomerate to deploy secure wireless mobility infrastructure across all its offices, and a PSU bank in India as they continue to drive the next generation of digitization in bank branches.

Sify also won its first IoT project of scale in this quarter from a logistics company to drive digitization of their supply chain. I’ll now moving onto the data center centric IT services part. Revenue from this business grew 25% over the same quarter last year.

In response to market demand, Sify has added an additional 1440KW of capacity at its Mumbai data center. Sify added some marque clients to their data center roster.

Among them are an Indian MNC for their energy business, a content caching MNC at two of our data centers, an international OTT player to commission their Content PoP for North India and a world leader in the audio components industry.

One of the fastest growing private banks and a large public sector bank also expanded their data center engagement with us. Sify in total signed up 14 new customers for cloud and managed services this quarter.

Sify has also signed up 9 new customers for talent management and supply chain management and a significant government organization for digital security. Sify is offering of applications extended through alliances with major players won 7 new clients this quarter for SAP, Oracle and Microsoft services.

Sify also added 21 new clients this quarter for its technology integration services.

Sify made major inroads into the public sector banking segment in managed security services with two public sector banks signing up for implementation and maintenance of security operations center, another to implement intrusion protection system and provide security services.

A public sector oil and gas major contracted with Sify to build their data center and manage its operations. This quarter, Sify became the first Indian company to find a place in the challengers’ quadrant in Gartner’s Magic Quadrant for Managed Hybrid Cloud Market 2017 in Asia.

Amazon web services authorized Sify as a reselling partner for public sector units in India. For the second time, Sify has been certified for SAP for hosting services, cloud services, Hana services and application managed services. This was about our business. Let me bring in Vijay, our CFO to elaborate on the financial highlights for the past quarter.

Vijay?.

Thank you, Kamal. Good morning everyone. Please to present a financial performance for the third quarter of financial year 2017-2018. Revenue for the quarter was INR 5228 million, an increase of 13% over the same quarter last year. EBITDA for the quarter was INR 702 million, approximate to the same as the same quarter last year.

Net profit for the quarter was INR 285 million, an increase of 62% over the same quarter last year. CapEx during the quarter was INR 379 million. Our revenue continues to maintain growth.

The reduction in depreciation is on account of completion of amortization of a significant investment in the past for a major wide-area network project for a customer. Over this quarter, we have continued our investments in resources and in particular, on skills enhancement, which will get monetized over time.

Our cash balance for the quarter was INR 1898 million. I will now hand you over to our Chairman for his closing remarks.

Chairman?.

Thank you, Vijay. As stated earlier, the business community is taking note of our unique positioning and differentiated products and services. And we will keep you posted on our progress. Thank you for joining us on the call. Now I will handle over to the operator for question.

Operator?.

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question is from the line of Greg Burns with Sidoti & Company. Please state your question..

Good morning.

In the telecom services business, what’s causing the declines in the voice component of that business?.

So Greg, Vijay Kumar here. As far as the voice business is concerned. That business is incidental to our overall data and managed services business, and this business is essentially are India termination of the voice traffic which we bring into India. And the price realization has been lower over the last couple of quarters.

And consciously, we have chosen to have lower revenue volumes in that particular business..

Okay. And in terms your data center centric services, is that 25% growth across that whole segment of the business.

Could you give us maybe a little bit of color on where that growth is coming from? Is it being driven by one or two particular services? Or is it broad-based across all the four services?.

Greg, it’s broad-based across our entire offerings that own the data center centric IT services, which includes colocation services, cloud and managed services and also some application like integrated – integration services project. We are seeing good traction in the growth of these services business.

As shared in the past, the current quarter performance is a reflection of the strategy we have pursued over time..

Okay. Is there any particular segment that’s outperforming the rests like – or any that are not growing – but you maybe have some that are – can you just give us the IT of the relative growth of each of those services..

In terms of products and services, we are seeing growth uniformly across all our offerings, except in the context of the voice, which we had mentioned. There is an accelerated growth in the area of data center centric IT services, which you have rightly pointed out, and that basically a reflection of the conscious strategy, we are pursued over time.

In terms of customer segmentation, the BFSI segment continues to drive growth along with retail and manufacturing..

Okay.

Could you help me understand the decline in the gross margin this quarter, was that’s driven by mix or is there something else going on?.

No. Two reasons – two point break. One is, in the context of the India termination of voice which I mentioned to you, which is there, of course, a small part of the overall revenues. There is a margin decline.

And second, as I mentioned in my remarks, we have during the year, invested significantly in resources, adding people particularly with reference to our focus on enabling digital transformation for our client deal. And up skilling of our resources, existing resources too, so which have contributed to the margin being relatively flat..

That is – Greg. That is what we’re doing is, we are looking – we are investing little bit head of the things for the plans. As you see the digital transformation is happening. So there is one of the reason why we are – in this transformation, we’re little bit heading investment head of schedule..

Okay.

So more being driven by your internal investments and competitive pricing pressures?.

It’s not a pricing pressure. It is more of our investment for the forward – following future quarters, we started investing, one is skill development. And other is also – is hiring to expand around our data center centric and the business development teams..

Okay.

Is there anyone else in the queue waiting to ask questions?.

Yes. We have our next question from the line of Ben Klieve with Noble Financial..

Thank you. One quick question, Kamal, in turn building up Greg’s question here from the voice terminations business. You noted this on the first quarter call as well, I may have missed it. But I don’t think you did on the second quarter.

I’m wondering if the declines in this business year really have been ongoing for a period of time, or you just have been seeing it kind of – or if it’s been kind of lumpy decline. And then also do you expect the headwind that you saw this quarter to really be an issue going forward as you look into 2018..

Two things, one is, it’s big seasonal the voice India termination business. Second is on the regulatory framework, going forward there are some changes also expected.

Consequently, while the margins might remain same or improve the individual revenue from that particular set of services which happens to be relatively small component in the overall revenue of the company? There would be some marginal decline..

Did you say some of marginal decline or margin decline?.

Marginal..

Marginal decline. Okay, perfect. Thank you. And then also you – I’m curious about the all-flash storage platform that you was – one, well there was launch in response demands from limited number of customers or do you think this is the service that really has the potential to have kind of broad demand.

And then also do you see the demand from that service to be purely accretive or do you think this is going to fall in revenue from other areas of your business..

In general, let me answer it. In general, all-flash storage is taking into the new generation technology and the customers are demanding and the new technologies. If you look at – the cloud platforms what we are offering with the storage, is there are – for a selling is a storage, for a backup or a storage for the part of the cloud services.

Overall, we see people are demanding such kind of technologies..

Okay. And that the demand for that technology, is that being – is the demand being shifted away from other technology or other services you provide? Or do you think this is going to be accretive to the top line..

At this point, it’s more of accreted I think we’re not seeing the demand reducing from other technology. But as you can see more and more all-flash is growing up compared to the other old traditional storage technology in it..

Okay, perfect. Thank you. And then last question for me, Vijay, you talked about a wide area network customer amortization winding down. Is the – can we assume the – that the depreciation amortization rate that you have for this quarter is being as reasonable run rate going forward..

Yes. You’re right. Subject to the new capacity, which we are adding – which capital expenditures numbers we have been reporting to you quarter-by-quarter..

Okay. Thank you then. That’s it for me. Thank you, thank you very much..

Thank you..

Thank you. At this time, I’ll turn the floor back to management for closing remarks..

Thank you everyone for joining us on the call. And we look forward to interact with you throughout the year and have a great day. Thank you..