Greetings, and welcome to Sify Technologies financial results for the fiscal year 2022-2023. Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Praveen Krishna. You may begin.

Thank you, Ali. I'd like to extend a warm welcome to all our participants on behalf of Sify Technologies Limited. I'm joined on the call today by Mr. Raju Vegesna, Chairman; Mr. M.P. Vijay Kumar, Executive Director and Group CFO; and Mr. Kamal Nath, Chief Executive Officer. 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 sifytechnologies.com/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 Sify corporate website. Some of the financial measures referred to during this call and 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 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'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 that 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.

Thank you, Praveen. Good morning, everyone. Thank you for joining us on the call. The digital tsunami that swept India during COVID has settled into a steady adoption by both public and private enterprises. Enterprises are eager to unlock the power of digital automation measures to transition to the next phase of their growth. Sify is in the right place, building all the infrastructure services, be it network, data centers, and digital services, providing a digital bridge for any enterprise to transform and realize their digital ambitions. Let me now bring in Kamal, our CEO, to expand on some of the business highlights for the past year. Kamal?

Yes. Thank you, Raju. FY 2023 has set the tone for a massive digitalization drive among all sections of enterprises, public sector, and government customers. This puts Sify on the fast track to meet customer demands, which in turn offers potential for exponential growth. There has never been a previous period of uniform accelerated growth opportunities for each of our three managed service lines: data center infrastructure services, network infrastructure services, and digital services. The unique opportunity for Sify in the coming years is our ability to deliver transformational outcomes using a combination of these three services. Let me now expand on the business highlights for the year. Revenue from Data Center colocation services for the year grew by 35% over last year. Revenues from Digital Services for the year grew by 33% over the last year. Revenue from Network-centric services for the year grew by 11% over last year. The revenue split between the businesses for the year was Data Center colocation services at 30%, Digital Services at 30%, and Network-centric services at 40%. Through the year, Sify has invested USD 2.09 million in start-ups in the Silicon Valley area as part of our corporate venture capital relationship. To date, the cumulative investment stands at USD 5.38 million. As of March 31, 2023, Sify provides services via 892 fiber nodes across the country, a 9% increase over last year. 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 and Group CFO, to elaborate on the financial highlights for the year. Vijay?

Thank you, Kamal. Good morning, everyone. Let me briefly sum up the financial performance for the financial year 2022-'23. Revenue was INR 33,404 million, an increase of 24% over the last financial year. EBITDA was INR 6,291 million, an increase of 4% over the last year. Profit before tax was INR 1,021 million, a decrease of 45% over last year. Profit after tax was INR 674 million, a decrease of 46% over last year. Capital expenditure for the year was INR 13,221 million. Our strategy to separate the business into three units is bearing fruit, with each business focused on its unique opportunities and attracting appropriate investments and partnerships. Our investment philosophy is multi-pronged: invest in new locations for data centers for long-term growth, expand capacity at current data centers to capture immediate demand, strengthen our network and cloud interconnects while expanding our people strength with the necessary skills, tools, and processes, all of this while we stay cost competitive and fiscally diligent. The cash balance as at the end of the year, March 31, 2023, was INR 4,579 million. I will now hand over to our Chairman for his closing remarks. Chairman?

Thank you, Vijay. A large number of enterprises have transitioned from isolated digital warehouses to viewing their entire IT landscape in the context of transformation experiences. To achieve that, they will solicit partners who can enable multi-services deployment at cost-effective price points. Sify, we are building a digital bridge for these enterprises to meet their aspirations. That is, we are on the right track. Thank you for joining us on this call. I will now hand over to the operator for questions.

Our first question is coming from Greg Burns with Sidoti & Company.

Could you please give us an update on your data center roadmap maybe for the coming 12 months in terms of when you see capacity coming online and maybe the timing of when we might see revenue start to flow from those investments?

Greg, we cannot disclose some of the forward-looking. But there are multiple places of our data centers coming in the next 12 months, starting from the third and fourth quarters of this current calendar. And we will have substantial things coming into the market in all segments. As you know, we are already in six markets in India: Mumbai, Chennai, Bangalore, Hyderabad, Karnataka, and NCR, the New Delhi area. So there is a substantial amount of capacity coming in all these cities covering India in the market. So we see substantial growth in the data center market for us.

Okay. Maybe we could do it like this. Like how many megawatts of capacity do you currently have? And what's the roadmap for adding incremental capacity or maybe over the next 12 months or next 3 to 5 years?

So as you know, we crossed more than 100 megawatts of IT power already in production, and most of that's already in usage. We are building in the next 12 months more than 124 megawatts of capacity available in the next 12 months. And if you're looking at the next 4 to 5 years, we are in the roadmap to build 400 to 500 megawatts of capacity across the country.

Okay. And then maybe you could just talk about sources of funding. Obviously, there's going to be a little bit of CapEx needed here. So could you just talk about sources of funding for that investment?

So Greg, Vijay Kumar here.

You want to answer, Vijay?

Yes. As far as the current expansion projects which are underway which we are adding in the next 12 months, the financial closure is already done, which comprises partly the compulsory convertible debentures which we have issued to Kotak Special Situations Fund, partly from the banking system in terms of term loans which have an average maturity of 7 to 8 years, and the remaining from our internal accruals. As far as the capacities to be created beyond that, we have an arrangement with Kotak Special Situations Fund for drawing down an additional INR 600 crores of capital. Along with our approvals, we are confident of raising the needful debt for meeting the expansion beyond the period of 12 months as well.

Okay. Perfect. And then in your Digital Services segment, very strong second half, and this quarter, I think that revenue was up about 60%. So what is driving that, I guess, the stronger second half on the Digital Services?

So Greg, as we discussed, a lot of the Indian enterprises are transforming into digital. We are doing some of the major projects to transform these enterprises into digital. These projects could be major, but we are transforming them project by project.

Okay. So regarding the technology integration, the service is very project-based. What does the pipeline look like there? I know it can fluctuate, but how should we consider the growth of Digital Services for this year?

Yes. No, Digital Services, this year's growth is more than we expected because of COVID. Some of the projects did not complete yet, but we completed some of those projects this year. That's the reason you see the growth. But I think, like I stated, there's a transformation happening in India, and you will see these kinds of projects continuously coming. So we don't know how many we are going to win in the future, but in general, the digital transformation projects are happening, and we are eagerly participating in those projects.

Could you please discuss the current state of the Indian economy, how it's performing, and its potential short-term impact on your business? Additionally, there are many reports about foreign direct investment increasing in India, particularly from countries like China. Can you elaborate on the short-term economic situation and also provide your thoughts on the long-term outlook?

Yes. So from the perspective of the Indian economy, we are strong believers in Indian economic growth. It's not just because I like it; that's what I see in the customers when we meet. Most organizations are spending for digital transformation, and I've never seen a single company's budget cut under digital transformation. That way, it's good. In general, what we see in the Indian economy, I cannot comment on GDP numbers or anything beyond my skill set, but the sentiment in India’s growth is very high. As for the foreign investments from China into India, I don't have specific insights on those, but I see a lot of foreign investments coming into India and a belief in the country's growth. We are witnessing multiple trends: India's growth, continuous foreign investment growth, Indian enterprises reaching out more, and now India being number one in population. We need more infrastructure and all aspects for digital transformation. So we are going to play a big role in India's digital transformation. In that way, we see a lot of opportunities as we have before. We have a lot of opportunities; that's what Sify believes in.

Okay. It appears we have reached the end of our question-and-answer session. So we'll hand it back over to management for any closing comments.

Thank you for your time on this call. We look forward to interacting with you throughout the year. Have a good day. Thank you.

Thank you, ladies and gentlemen. This does conclude today's conference, and you may disconnect your lines at this time, and we thank you for your participation.