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spk00: Ladies and gentlemen, thank you for your patience. This conference will begin shortly. Once again, thank you for your patience and this conference will begin shortly. Thank you. Thank you. © transcript Emily Beynon
spk03: Thank you. Ladies and gentlemen, thank you for your patience.
spk00: This conference will begin shortly. We thank you for your patience and this conference will begin shortly. Bye. We'll be right back. Thank you. Thank you. Thank you. Greetings.
spk02: Welcome to the SIFI Technologies Financial Results for First Quarter and Fiscal Year 2023-2024. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Praveen Krishna. You may begin.
spk09: Thank you, Holly. I would like to extend a warm welcome to all our participants on behalf of CIFI Technologies Limited. I'm joined on the call today by Raju Vexena, Chairman, MP Vijay Kumar, Executive Director and Group CFO, and Kamal Nath, CEO. 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'll have one sent to you. Alternatively, you may obtain a copy of the release at the investor information section on the company's corporate website at www.siffytechnologies.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 Siffy corporate website. Some of the financial measures referred to during this call and in the earnings release may include non-GAAP measures. SIFI's results for the year are according to the International Financial Reporting Standard or IFRS and 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 difference between such non-GAAP measures and the most comparable financial measures calculated and presented in accordance with GAAP will be made available on CFI'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 protection 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 Veksanath, Chairman of SIFI Technologies Limited. Chairman.
spk06: All you know, India is a growth story. These are exciting times India is going through. We have to build our services and how do we make a stable destination, the availability of the relevant resources, tools, and significant untapped demand for the Indian enterprises. The government has been consistent in using IT as an enablement tool to implement social measures, and this has contributed to a very matured IT ecosystem. And our next phase of the growth will leverage this favorable environment by introducing innovative and cost-effective... It looks like we lost the speaker's line.
spk05: Just one moment while we connect. We have the speaker line connected.
spk07: Thank you.
spk06: Our next phase of the growth will leverage this favorable environment. by introducing innovative and cost-effective digital services for our customers. Let me now bring Kamal Nath, our CEO, to expand on some of our business highlights for the past quarter. Kamal?
spk07: Thank you, Raju.
spk06: As enterprises are pursuing their digital transformation and digitalization objectives, they are also recalibrating their digital infrastructure across hybrid cloud network security and health infrastructures this is a great opportunity for us to monetize our infrastructures designed for digital i.t and transform the way digital infrastructures are managed through our digitalized services we are topping that up by continuously building our core digital portfolio to support our customers innovation journey this portfolio places siffy in a unique position for all round customer engagement across their digital lifecycle, which we believe would augment our growth strategy. Let me now expand on the business highlights for the quarter. The revenue split between the businesses for the quarter was data center co-location services at 32%, digital services at 28%, and network services at 40%. As on June 30th, 2023, SIFI provides services via 910 fiber nodes across the country, a 10% increase over the same quarter last year. The network connectivity service has now deployed 6,541 SD-WAN service points across the country. During the quarter, SIFI has invested US$193,000 in startups in the Silicon Valley area as part of our Corporate Venture Capital Initiative. To date, The cumulative investment stands at US dollar 5.57 million. A detailed list of our key wins is recorded in our press release, now live on our website. Let me bring in Vijay, our Executive Director of CFO, to elaborate on the financial highlights for the quarter. Vijay?
spk08: Thank you, Kamal. Good morning, everyone. Let me briefly sum up the financial performance for the first quarter of financial year 23. Revenue was INR 8547 million, an increase of 11% for the same quarter last year.
spk07: Holly, did the line drop?
spk02: Yes, one moment. I will connect the speaker's line again.
spk05: connecting again. We have the speaker line connected.
spk08: Yeah. Thank you. Please proceed, Vijay. If we don't want EBITDA was INR 1724 million, increase of 13% over the same quarter last year. Profit before tax was INR 149 million, and profit after tax was INR 95 million, a decrease of
spk02: It looks like we lost the speaker line again. One moment while I reconnect.
spk07: Holly, also connect on the other alternate number I gave you.
spk05: Okay, one moment.
spk02: The speaker's line is connected.
spk08: Thank you. Capital expenditure during the quarter was INR 1436 million. TIFI and SIFI Infinite Spaces Limited, a wholly owned subsidiary of SIFI, which operates data center co-location business, have entered into an agreement with Kotak Data Center Fund on July 20th, 2023, under which the fund will invest up to INR 6,000,000,000.
spk05: It looks like we've lost the line again. One moment while I reconnect.
spk08: Please try backup number also.
spk02: Okay, we have the speaker line reconnected.
spk08: SIFI and SIFI Infinite Spaces Limited, a wholly owned subsidiary of SIFI, which operates the data center co-location business, have entered into an agreement with a leading investment bank-led fund, Kotak Data Center Fund, on July 20, 2023, under which the fund will invest up to INR 6,000,000,000 Approximately USD 73 million on today's exchange rate in the form of compulsory convertible debentures of SIFI Infinite Spaces Limited.
spk05: One moment. It looks like we lost the speaker line again.
spk04: That landline is not even going through the total. Yeah.
spk02: We have the speaker line connected.
spk08: Thank you. CFI Infinite Spaces Limited will use the proceeds for the expansion of data centers, including land acquisition for new data center capacity, investment in procuring alternate source of power, and repayment of debt.
spk05: One moment please while we reconnect the speaker line.
spk07: Holly, try the other line too. He's just beside him.
spk02: We have the speaker line reconnected.
spk08: Yes. Fiscal disciplines will remain the cornerstone of our growth strategy as we scale investments into our data centers and networks. By judicially allocating investments and resources, we will seamlessly expand our infrastructure in new resources,
spk07: and build competencies and scale.
spk08: While we expect to see these investments impact profitability in the near term, they should enable us to aggressively pursue digital transformation engagements in the future. We will continue to prioritize resource optimization and sustainability, fortify our
spk05: One moment please while we reconnect the speaker.
spk02: We have the speaker line reconnect.
spk08: Yeah. The cash balance at the end of the quarter was INR 3,240 million. I will now hand over to our chairman for his closing remarks.
spk06: Thank you, Vijay. At the beginning of this financial year, we unveiled our ambition to become the digital bridge for enterprises who are either adapting or being...
spk05: It looks like we lost the speaker line again, just one moment.
spk02: We have the speaker line connected.
spk06: Our immediate milestone is to become the enabler of the choice of this transformation. And we are well on our way. Thank you for joining on this call. I will now hand over to the operator. So I know we are having a lot of connections. Please reach our IR person. for any questions, but more than happy to answer any questions we have at this point. Operator?
spk02: Certainly. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for questions. Your first question for today is coming from Greg Burns at Sedodian Company.
spk01: Good morning. So in terms of co-tax investment, what is their total investment now, including the first round of investment? that they did, I guess, a little over a year ago. I'm assuming that's fully pulled now, but where do they stand in terms of their investment into SIFI Infinite Spaces and the conversion rates on the notes? What percent of equity does that convert into?
spk09: Holly, do you have MPVJ for us?
spk02: It looks like the speaker line dropped again. Just one moment.
spk09: Holly, that's OK. My suggestion is that my CEO, Mr. Kamalnath, can take this call.
spk05: OK.
spk07: Kamal? Praveen, Vijay has to take this call.
spk06: Vijay has to take this call.
spk01: So he would be specific. I could ask another. I have another question. So maybe it's better for Kamal. Okay.
spk07: Go on.
spk01: Yep. So you mentioned like a new kind of phase of growth and taking advantage of moving beyond just kind of infrastructure and you know, emphasizing digital services. So when you talk about that, is that just putting more resources behind the digital services that you're already reporting, or does that envision something beyond that, some new services that you're bringing to market? Because I saw on your website you had something called Marketplace, and I don't know if that's new and part of this initiative, but maybe if you could elaborate on what you mean by digital services and, you know, your your vision there for how that drives growth for SIFI?
spk06: Yeah, very good. So, yeah, it's a good question. So, you see, we have, so our entire portfolio can be logically divided into, can be looked at, you know, from a customer's point of view in three parts. One, of course, are the infrastructures for digital IT, you know, cutting across data center, network, cloud, et cetera, et cetera. The second set of services, we are calling them digitalized services, which are basically services to better manage the digital infrastructure to get the best out of the digital infrastructures when the digital applications are being run on the infrastructure. Those are the digitalized services. And some of the digitalized services, some of the services were basically were existing earlier also, but they have got digitalized by by insertion of digital technologies like AIML. A lot of our services have got digitalized by enabling them with AIML technologies. The third set of services, which we call the core digital services, are across certain digital platforms. So we have invested, as you gather, what we call... in multiple deep tech companies, which are by using those platforms, we offer digital services to our customers. So customers can build digital business models or can digitalize their services based on those platforms. So we will be continually adding more and more portfolio around those core digital platforms. And in the coming days, I'm sure we'll be able to announce some more exciting partnerships in that regard. So from a customer standpoint, we are engaging with the customers for their core infrastructure. We are engaging with them for managing the core infrastructure better and also in the customer's innovation journey. So that's how I would like to put. And in that way, we are able to engage with customers cutting across their entire lifecycle of their digital journey.
spk01: Okay, great. And I don't know if this is one for Vijay or not, but can you just give us an update on your data center footprint? I think the last report was around 11 DCs and about 100. megawatts of power. What's the roadmap like for this year? How much capacity in fiscal 24 are you bringing online, and what's the timing of that?
spk07: Yeah, we are, in fact... Yeah, Vijay, you're there?
spk08: Yeah, Kamal, I'm here. So we have three greenfield projects which are currently under construction. One of them is expected to go live... later this quarter and that particular capacity is designed for about 38 megawatts and will get occupied by the customer in a phased manner. The other two facilities, the civil construction will get completed in the quarter four of the fiscal year and basis or customer engagement will create the initial IT capacity required for the customer.
spk01: Okay. So, um, so between those three, um, how much, I guess you'd mentioned 38 megawatts and the one that's coming online, but how, how much added capacity is that put you at? And then I guess, could you just remind us of what your, your longer term targets are in terms of your, your, um, data center investments and does the, the new investment from Kotak increase your goals in terms of investment and capacity?
spk08: Yeah. I lost a part of your question because I got disconnected. I guess you are referring to additional capacities to be created in future based on the new capital which is coming from Kotak.
spk01: Yes. Yeah.
spk08: That is for new capacities which we intend to create over the next 18 to 24 months beyond the three greenfield projects which are currently under construction. The new capacities we are currently completed are land acquisition. The design and planning work is in progress.
spk02: one moment while we connect Vijay.
spk01: That's okay. We can connect offline and do this at another time. Yeah. All right. No problem.
spk08: Okay. I'm back here. So it's basically for new capacities beyond the current greenfield project. What we have done is financial closures ahead of new projects to be started.
spk01: Okay, great. Thank you. Thank you.
spk02: Once again, if there are any questions or comments, please press star 1 on your telephone keypad. There appear to be no further questions in queue. I would like to turn the call over to the management for closing remarks.
spk06: Thanks for your time on this call. We look forward to interacting with you throughout the year. Thank you very much. Have a great day.
spk02: Thank you. This concludes today's Thank you. This concludes today's conference. You may disconnect at this time.
spk09: Holly, if you don't mind, to everybody on the call, we're sorry about the interruptions that have been frequently happening. But if you have any further questions, you can reach out to me marked in the press release. My email ID and my coordinates are there. Thank you very much, Holly.
spk02: Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.
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