Sify Technologies (NASDAQ:SIFY) reported a 31% year-over-year increase in revenue for the second quarter of fiscal 2026-2027, as the company continued to invest in data center capacity, network infrastructure and services supporting AI-related workloads.
Revenue for the quarter totaled INR 13.798 billion, while adjusted EBITDA rose 33% from a year earlier to INR 3.131 billion. Profit for the quarter was INR 40 million. Capital expenditures were INR 8.573 billion, and cash at quarter-end stood at INR 5.868 billion, according to Executive Director and Group CFO M P Vijay Kumar.
The company’s revenue mix during the quarter consisted of network services at 43%, data center services at 37% and digital services at 20%.
Data Center Expansion and Contracted Capacity
Sify had 136 megawatts of operational, revenue-generating data center capacity as of Sept. 30, 2026. The company also had 113 MW of contracted capacity scheduled for delivery, which Vijay Kumar said is expected to come online beginning in the current quarter and continuing over the following three quarters.
The 113 MW includes 81 MW previously identified for delivery during fiscal 2027, he said. The capacity is located primarily in Rabale and Noida, with a smaller amount in Chennai.
After incorporating the capacity under construction, Sify expects total design capacity to approach 300 MW. Vijay Kumar said the company’s land bank across seven cities could support more than 1 gigawatt of capacity without additional land purchases.
Management said industry demand currently exceeds available data center supply, supporting pricing and expected returns on investment. “There is no pressure on pricing,” Vijay Kumar said. “In fact, the pricing is getting better, and the returns are also improving.”
Data center revenue declined sequentially, but Vijay Kumar attributed the change to quarter-to-quarter timing rather than a change in the broader business trajectory. The prior quarter included one-time enterprise implementation revenue and higher power-consumption revenue from existing customers. Power revenue is passed through and does not affect margins, he said.
Network and Digital Services Initiatives
Sify said its network services business benefited from the buildout of its national long-distance fiber network and growing demand for interconnection between hyperscale data centers. The company had 1,264 fiber nodes as of Sept. 30, up 6% from the same quarter a year earlier.
Vijay Kumar said the company is expanding its network to support AI workloads and expects network demand to increase alongside India’s hyperscale data center growth. He noted, however, that greater network traffic volume would not necessarily translate proportionately into revenue growth because of the business’s unit economics.
The company received approval from India’s Department of Telecommunications for its Vizag cable landing station and plans to begin work on the project. Separately, management said two edge data centers—in Lucknow and Mohali, near Chandigarh—have gone live, while work is under way on two additional edge facilities.
On capital allocation, Vijay Kumar said the “substantial amount” of current spending is directed to data centers. He estimated the split of data center and network capital expenditures at roughly 80% and 20%, respectively, while adding that Sify expects to increase network investment over time.
Digital services returned to positive EBITDA during the quarter, according to management. Vijay Kumar said the company expects the segment’s performance to improve further as it works to make its digital-services portfolio increasingly AI-led. He did not identify one-time factors behind the quarter’s profitability.
IPO Timing and Financial Flexibility
In response to analyst questions about a potential initial public offering for Sify Infinit Spaces, Vijay Kumar said the company remains engaged with bankers, who are advising management on the appropriate timing for the offering.
He said the timing is not strictly related to market conditions, noting that the Indian IPO market is performing well. The company has until the end of January to proceed under its current timetable; beyond that point, the process would need to be restarted, he said.
Vijay Kumar also said Sify is adequately capitalized to pursue its growth plans and would continue to have support from Kotak in the event of a further IPO delay.
Chairman Raju Vegesna said India’s digital transformation is moving into “a new phase of execution at scale,” driven by investments aimed at improving productivity, resilience and customer experience. He said Sify’s integrated portfolio of data centers, network services and digital capabilities is intended to help customers modernize technology environments and prepare for an AI-enabled future.
About Sify Technologies (NASDAQ:SIFY)
Sify Technologies Limited is an India-based digital transformation and information and communications technology services company. It provides enterprises with solutions spanning cloud computing, data center infrastructure, managed connectivity, cybersecurity, and IT services.
The company operates data centers and delivers hybrid and multi-cloud services, including cloud migration, infrastructure management, monitoring, and application-related support. Its connectivity offerings include enterprise networking and managed network services, while its security portfolio covers areas such as threat protection, security operations, and compliance support.
Founded in 1998, Sify was among India’s early internet service providers before expanding into enterprise technology and digital infrastructure services.
