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spk00: Good day, ladies and gentlemen, and welcome to the SIFI Technologies Financial Results for Second Quarter in Fiscal Year 2021-2022. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Praveen Krishna. Sir, the floor is yours.
spk06: Thank you, Holly. Good morning. I'd like to extend a warm welcome to all our participants on behalf of SIPI Technologies Limited. I'm joined on the call today by my chairman, Raju Veksana, my chief executive officer, Mr. Kamal Nath, and my chief financial officer, Mr. MP Vijay Kumar. 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 Grayling Global at 646-284-9400 and we will have one sent to you. Alternatively, you may obtain a copy of the release of the investor information section on the company's corporate website at cifitechnologies.com slash investors. 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 CIFI corporate website. Some of the financial measures referred to during this call and in the earnings release may include non-GAAP measures. CIFI's results for the year are according to the International Financial Reporting Standards or IFRS and will differ somewhat from the GAAP announcements made in previous years. The presentation of the most directly comparable financial measures calculated and presented in accordance with GAAP and the 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 CIFI's website. Before we continue, I'd 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 lists 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 my chairman, Mr. Raju Vekasena. Chairman.
spk05: Thank you, Praveen. Good morning, and thank you for joining us on the call. As India is bouncing back from the second wave remarkably, With the businesses reporting near pre-pandemic results, this pandemic helped us to clearly establish what administrative can achieve. Through the course of multiple lockdowns, the government set the pace by enabling critical IT infrastructure and following that up with the aggressive adoption of automation for the delivery of welfare services, and other services. Similar initiatives have rapidly been adopted by small and medium and enterprises, driving the demand for the services, our data center requirements, and the network and IT services. That combined with the geopolitical changes has made India increasingly and attractive to multinational companies and enterprises as the next destination for all the services. We expect these tailwinds to create new opportunities for TP. And let me, you know, bring our CEO, Kamal Naaz, to expand on some of the business highlights for the past quarter. Kamal? Thank you, Raju. As declared earlier, the creation of the two subsidiaries, SIFI Internet Spaces Limited and SIFI Digital Services Limited under the parent SIFI Technologies Limited, was to ensure that we can focus on strategy and investments in line with the evolving market conditions. Our financial results endorse this decision. The decision was timed to the enterprise world's accelerating demand for hyperscale data centers cloud-based digital transformation services and application modernization, all central to our current services bouquet. With the return in market sentiment, we are seeing aggression in customer decision-making in all forms of digitalization. Our cloud at core portfolio of services sits perfectly within this new demand and is increasingly reflected in our current customer engagements. In line with the precedent, I would like to expand on the business summary. The business summary this quarter is presented separately for network services, data center services, and digital services, reflecting the separate subsidiaries that have been established to focus on each of these business maps. Revenue from network-centric services grew by 7% over the same last quarter last year. Revenue from data center services grew by 47% over the same quarter last year. Revenue from digital services comprising of cloud and managed services, applications and technology integration services grew by 17% over the same quarter last year. The revenue speed between the businesses was network centric services 42%, data center services 27%, and digital services 31%. Let me now expand upon the business highlights. As part of our corporate venture capital initiative, we have cumulatively invested a little more than USD 3 million across four startups in the United States. During the quarter, SIFI has also invested in procuring renewable energy for our data center in Mumbai to the tune of INR 225 million. Cumulatively, SIFI has delivered 74 megawatt of data center capacity as on September 30th In the quarter, SIFI completed the upgrade of its backbone network in the key cities of Hyderabad, Chennai, Bangalore, Mumbai, and Delhi. These four times upgrade to the current capacity can now deliver high density services for its enterprise customers. In addition, SIFI completed its metro network deployment in Hyderabad, Pune, Jaipur, Ahmedabad, and Kolkata. adding to our metro networks in Mumbai, Chennai, Bangalore, and Delhi. With this deployment, SIFI can make available services up to 100 gig on tap to enterprise customers. SIFI continues to expand its network coverage and has increased wireless base station density by 23% to deliver high bandwidth to enterprise customers. During the quarter, SIFI signed a landing party agreement to land a new submarine cable at our open cable landing station in Varsoba, Mumbai. A detailed list of our key wins is recorded in our press release, now live on our website. Let me bring in Vijay, our CFO, to elaborate on the financial highlights for the past quarter. Vijay.
spk04: Thank you, Kamal. Good morning, everyone. Let me briefly present to you the financial performance for the second quarter. of the financial year 2021-22. Revenue was INR 6986 million, a growth of 18% over the same quarter last year. EBITDA was 1477 million INR, an increase of 24% over the same quarter last year. Profit before tax for the quarter was INR 461 million, an increase of 11% over the same quarter last year. Profit after tax was INR 356 million, an increase of 39% over the same quarter last year. Capital expenditure during the quarter was INR 1497 million. We continue to stay focused on expanding our data center footprint along with our network reach and delivery capabilities in our digital services. Operating performance continues to be stable. While the economic recovery is a healthy positive sign, we will continue to be vigilant on cost effectiveness, capital allocation, and liquidity management. Cash balance at the end of the quarter was INR 2820 million. I will now hand over to our chairman for his closing remarks. Chairman.
spk05: Thank you Vijay. The creation of our subsidiaries was intended to enable sharper focus on the individual line of businesses allow them to pursue independent market strategy while they will enable their individual strength, collectively they will drive our focus to be the first choice of digital transformation partner for enterprises. We are encouraged by the adoption of our services by startups who use technology as their main differentiators. That coupled with the orders from the established enterprises endorsing the strength of our services offering. Thank you for joining us for this call. And I will now hand over to the operator the questions. Operator?
spk00: Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. Your first question for today is coming from Greg Burns. Please announce your affiliation, then pose your question.
spk03: Good morning. I'm with Sidoti and Company. It sounds like things are recovering from the Delta surge, the pandemic, this quarter or maybe more recently, but I just wanted to kind of get a, feel from you from what you're seeing from your customers are you seeing them willing to maybe engage in in larger projects start to spend more well what is the the demand picture look like for you and are you seeing you know build up in your your pipeline of opportunities thank you yeah great beside you yes what is so we are seeing
spk05: customers started engaging and the looking at the opportunities what we are seeing and while we are you know enhanced in our platforms and our services while the customers are doing in parallel and having starting the discussion and what we see is there may be major projects you know you know this pandemic learning will you know focus into the how they want to face, I think what are the things we are building up the pipeline of services. We are, you know, I cannot predict and forecast at this point, but we are engaged, let me say we are engaged with some of the exciting projects where, you know, a lot of the integrated deals across our services.
spk03: Okay. And you've done a really good job throughout the pandemic. managing costs and driving leverage. Now with market activity picking up and demand picking up, do you expect to maybe start spending more to drive that growth? What's your view on spending levels going forward and operating leverage?
spk05: One, Greg, as you said, the demand is coming up. So we are going to continuously investing in our data centers and also network. You've seen that we are expanding our network, metro networks. So both on the CAPEX side, both on the building more data centers and building more metro networks, even NLD networks, we are going to continuously spending for infrastructure. Similarly, On our services side, as we are, you know, country is, you know, focusing on the digital transformation, we are also going to increase our plans for the digital services adoption, you know, which is very good, great growth in India. So where, but it doesn't need much more CapEx, but, you know, it needs a lot of skills development and hiring more people. So both trends, both on the CapEx side, spending for the data centers, and the network, and similarly building our capabilities, delivering digital services, and part of the transformation, we are going to invest. As the, you know, hope, you know, future is going to be bright, and we are done with this pandemic. So, hoping that, I think, yes, we are going to invest very aggressively.
spk03: Okay. Do you have a target for EBITDA margin? I know it's been It's been over 20%, but would you expect that to maybe step down a little bit given some of the investments you plan on making?
spk05: Currently, we don't have, you know, at this predictable, you know, what it is. But, you know, as we, you know, investing, we are going to balance, you know, right? The investments and the return on the investments, you know, right? Okay.
spk03: Okay. And then in terms of the data center capacity, I guess you mentioned 74 megawatts of capacity at the end of the September quarter. What's the timeframe on bringing new capacity online? I think you had set a target for 100 megawatts, or maybe you can remind us what your target is and the timeline on when that would be coming online.
spk05: And I don't think we can predict what is the future, but we are going to continuously, quarterly, increasing the capacity what we showed this quarter. That is, we see the continuous growth, you know. And there are certain things we already built. So then, you know, we are going to deliver by demand by customers. And certain things we are building it. And those things will be coming online, you know, in the next 12 months or whatever it is. And there are certain things that are in design. So we have a plan to deliver what we have in the – what we build. And there are certain things we are building and certain things we are planning. So we see, you know, data centers is going, you know, a substantial amount in the next few years, you know, in all plans, you know, all plans.
spk03: Okay, great. Thank you very much.
spk00: Once again, if there are any questions or comments, please press star 1. There are no more questions in queue.
spk05: Thank you. I appreciate your time on this call. We look forward to interacting with you through this year. Stay safe. Stay healthy and have a good day. Thank you.
spk00: Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.
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