Truc Nguyen - IR Raju Vegesna - Chairman Kamal Nath - CEO Vijay Kumar - CFO

Welcome to the Sify Technologies Limited Conference Call following the earnings announcement for the quarter ended 30th of June, 2015. [Operator Instructions]. I would now like to introduce your host for the conference Truc Nguyen, Investor Relations for Sify Technologies Limited.

Thank you, Jessy. I would like to extend a warm welcome to all 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 Grayling at 646-284-9418 and we will 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.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 this 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 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 of 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, Raju?

Thank you, Truc. Good morning, thank you for joining us on the call. Our continued growth in the face of uncertain economic environment has firmly established us a steady player in the Indian IT space. This year we’re pursuing integrated growth from the North American market to supplement our traditional Indian market profits. While we’re still on the earlier stages of our entry in this market we are gaining strong traction with the partner ecosystem and are already seeing a growth interest in services we’re offering in North America. Within India we see a gradually improving market with ITC services playing an important role in supporting the Prime Minister's call for digital transformation of India. He has confidence that we have an important role to play in enabling both the public and private sectors as right to leverage the benefits of digital transformation. To reflect of the past quarter I would ask Kamal, our CEO to expand on some of the business buyback. Kamal?

Thank you, Raju. Our focus on multi-year and multi-services projects with our customers have guided us the continued growth path over the last multiple quarters including quarter one-off FY ‘15 - FY ‘16. Enterprises are increasingly adopting third platform as a shown model for IT infrastructure services and that’s a positive sign for Sify. Our new contracts particularly with the medium sized enterprises reflect the strength, such engagements are not only positioned us strongly as a new age ITC services partner for our clients but that will also play a significant role in utilization of multiple infrastructure as such we have on the ground. Let me now spend some time on the business highlights for the quarter, to start with our telecom business unit. The revenue from the data business grew over 20% over the same quarter last year, revenue from internet grew over by 16% over the same period driven largely by the five year exit [ph] strategy launched last year. During the quarter Sify delivered over 5000 circuits [ph] for it's enterprise customers including completion of a large project of over 1000 circuits [ph] for a PSU bank. The key wheels in the large enterprise segment include a large public sector bank and [indiscernible] bank state-wide network. In the mid-market Sify continues to acquire customers in the Ecommerce and logistics vertical, as these companies ramp up their supply chain into Tier 2 and Tier 3 cities and towns. The business launched project Jupiter, a special project focused on upgrading the data center interconnects service to provide best scale capability. The project involves upgradation of all network nodes in the key cities as well as the [indiscernible] of network with 100 gig optical capability. During the quarter Sify was awarded a major contract from a global OTT player to provide DCI services across two cities with Giga/Tera bit scale capability. As far as data center services business is concerned the business revenue grew 21% compared to the same quarter previous year, 40 new customers were acquired in the last quarter from different business verticals. Sify won a multi-crore contract from a third party assurance company, other deals include two cooperative banks and an international business process company. Sify concluded a contract for an important government project outsourced from an Indian IT and Manufacturing Conglomerate. Sify brought into production 22,000 sqft of data center server farm space in it's new data center in Rabale in Navi Mumbai. The cloud and managed services business revenue grew 66% compared to the same quarter in the previous year and media and 3D animation startup signed up a large contract for Sify’s Cloudinfinit platform, based on the flexibility and performance it offered. A disruptive player in the online budget hotels space signed on for consistent website and mobile site performance, while a leading Scheduled Bank signed a multi-year contract with Sify to handle their DC infrastructure operations. Sify has won the ‘Best Solution Implementation’ award for the Cloud Enablement of a State Data Center. Cloud major VMware accorded Sify the VCAN partner of the year recognition. Our application integrational services business revenue for this quarter was 15% lower than the same quarter in the previous year, reflecting fewer large projects completed during the quarter. The business partnership with Microsoft announced earlier has been extended to include all Microsoft applications on their Azure platform, the first customers for Microsoft’s O365 platform have been signed up under this partnership. Sify has also signed up a leading Oil and Lubricant organization and a leading beverages and packaged foods organization in India for Forum - our flagship product for the FMCG market. Sify’s foray into the Student Lifecycle Management area began with contracts from two major Educational institutions. A leader in the MEP sector with presence in the Middle East signed up to become Sify’s first international client for Managed SAP Infrastructure Services. Sify’s Managed SAP Infrastructure Services portfolio which is a combination of our indigenous cloud platform and SAP application services was extended to two new customers this quarter, taking the total number of SAP customers in Sify’s Data Centers to 13. The Technology Integration Services revenue grew 91% compared to the previous year. Sify won a large multi-year contract from a Public Sector Bank to supply, deploy and support Data Center Infrastructure, another contract to manage the data center was signed with a Public sector housing finance insurance company. A Central Government department contracted Sify for deployment of Data Centre IT Infrastructure. Overall 18 new clients were signed in the quarter across Security, Collaboration and Network Integration businesses. Our Security Operations Center setup by Sify for a Public sector Power company won the best SOC award from CERT. I will now handover you to Vijay, our CFO to expand on the financial highlights for the first quarter.

Thank you, Kamal. Good morning everyone. I will now provide detailed financial results for the first quarter of financial year 2015, 2016. Revenue for the quarter INR 3407 million, an increase of about 15% over the same quarter last year. EBITDA for the quarter was INR 583 million, an increase of 21% over same quarter last year. Net Profit for the quarter was INR 85 million, a decrease of 25% over same quarter last year. Capital expenditure during the period was INR 82 million and cash balance at the end of the quarter was INR 1342 million. Our top line growth has continued into the first quarter of the new fiscal year which has also translated well into a good EBITDA growth however our continuing investment in the core assets to support this level of growth has resulted in a modest drop in the net profit. While continuing to support the investment required for sustainable growth, our primary financial focus is on optimal asset utilization and mean lower operational cost. We see potential for increased asset utilization in both our network and data center business which have driven most of the capital investment in the past. Cash balance as of the end of quarter was INR 1342 million. I will now hand you over to our Chairman for his closing remarks. Chairman?

Thank you, Vijay. It's strong and consistent performance to a challenging economic environment is sign of strong fundamental and a clear valid direction. The other factor for our strong showing -- is growing realization that we are perhaps the only company offering the full spectrum of ITC services. For both our enterprise and SME client that translates into a single point of [indiscernible], better utilization of time and resources and a comprehensive SLA, has clients begin to see this benefit, Sify should see plan to gain in the coming year. Our focus is now to deliver on these lines while maturing up the curve in terms of our contracts. Thank you for joining us on this call. I will now handover to the operator for any questions. Operator?

Thank you everyone for joining us on the call and we look forward to interacting with you through the coming year. Thank you and have a good day.

Ladies and gentlemen this concludes today's teleconference.