Good morning, ladies and gentlemen, and welcome to the Sify Technologies Financial Results for Fiscal Year 2020 Through 2021. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Shiwei Yin. Sir, the floor is yours.

Thank you, Kate. 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 the press release, please let us know and we'll have one sent to you. Alternatively, you may obtain a copy of the release at the company's investor information section on the company's website at www.sifytechnologies.com/investors. A replay of today's call may be accessed by dialing in to the numbers provided in the press release or by accessing the webcast information in investor information section of the Sify Corporate website. Some of the financial measures referred to during the call and in the earnings release may include non-GAAP measures. Sify's results are according to the International Financial Reporting Standards, or IFRS. A presentation of the most directly comparable financial measures calculated and presented in accordance with the 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 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 production afforded by the Private Securities Litigation Reform Act of 1995. These risks include a variety of factors including comparative 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. Sir?

Thank you, Shiwei. Good morning. I trust you and your family are staying safe. Thank you for joining us on the call. As you know, India is in the grip of the second wave of the COVID pandemic, our government reintroduced lockdown to deal with the situation. The first wave was a wake-up call for large companies to increase their investments in digital transformation and that has helped us -- insulate them to a large measure this time around. Now that the merits of the digital transformation has been firmly established, we should see more midsized businesses adopt automation aggressively. The new normal, as I know, between -- blurred the lines between the work and the home environment, calling for the businesses to invest in the security of their data over public networks. The challenge is ensuring the public networks as a secure and resilient as the corporate networks. That said, we wish the situation will be over soon. And so the people and the livelihoods can be returned to the old normal. Let me bring in Kamal, our CEO, to expand on some of the business highlights for the past year. Kamal?

Yes. Thank you, Raju. A year into the pandemic, all the industries cutting across small, medium and large have accelerated their digital transformation and cloud adoption drives to be able to sustain and grow their businesses in a changed environment. Work from anywhere, movement to hybrid cloud platform, strengthening of disaster recovery plans to enable business continuity, application modernization, all these market trends find a natural solution in Sify's Cloud@Core model and offerings. The other important highlight is the growth of hyperscale cloud service providers and OTT players in India, which, on one hand, is accelerating our data center colocation business and on the other hand, strengthening our hybrid cloud offerings. Overall, we are on the right side of the same path. I would now like to expand on the business highlights and our growth drivers. Revenue from Data Center Services grew by 22% over last year. Segment-wise, revenue from Data Center Services grew by 45%. Cloud and Managed Services grew by 21%, and Technology Integration Services grew by 19%, while Application Integration Services fell by 19% over last year. Revenue from Network-centric services fell by 7% over last year. Segment-wise, revenue from Data and Managed Services grew by 4% and Voice business fell by 35% over last year. Let me now expand upon the growth drivers. The pandemic has accelerated the primary growth drivers in the market for cloud adoption led by digital initiatives and transformation. This trend is triggering movement of our cloud from on-premise data centers to hyperscale public cloud and hosted cloud in varied degrees based on the digital objectives of the enterprises. This results in transformation of the traditional network architecture and transformation at the edge, which connects the end user. The need for digital services like analytics, data lakes, IoT, et cetera are shifting the balance to adoption of hybrid and public cloud versus private cloud. Collectively, these trends are generating opportunities for full-scale cloud data center and network services, network service providers with digital service schemes. Let me summarize the categories of customers who are signing up with Sify. Customers choosing Sify for migration of their on-premise data center to multi-cloud platforms like Cloudinfinit, AWS, Azure and Oracle. They also entrusted Sify with management and security. Customers choosing Sify as their data center hosting partner as they embrace hybrid cloud strategy. Customers choosing Sify as their multiservice digital transformation partner and customers choosing Sify as a network transformation and management partner as they migrate to cloud-ready network. 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 year. Vijay? M. Vijay Kumar: Thank you, Kamal. Good morning, everyone. Let me sum up the performance for the financial year 2021. Revenue for the year was INR 24,320 million, an increase of 6% over the last financial year. EBITDA for the year was INR 5,085 million, an increase of 25% over the last year. Profit before tax for the year was INR 1,599 million, an increase of 57% over last year. Net profit for the year was INR 1,585 million. Deferred tax asset of INR 600 million has been recognized at end of the year based on assessment of reasonable certainty of future taxable income in the individual entities of the group. In future, tax expense, comprising current tax and deferred tax, is expected to be in line with the effective tax rate. Capital expenditure for the year was INR 3,483 million. Cash balance at the end of the year was INR 5,438 million. We continue to show steady growth through 2021 despite the challenges that the pandemic has posed. The healthy EBITDA growth has increased our confidence to spend on investing in both people and tools to increase our digital transformation service capabilities. We expect contracts to take slightly longer to conclude as clients take time to regain momentum. Our focus is on insulating the organization as we carefully manage our costs while ensuring that there is no lag in services delivery and customer experience. We are firm on our commitment to our data center, cloud and network-centric expansion plan and will exercise due caution in terms of both timing and cost structure of these projects. Considering the resurgent pandemic and the uncertainty on pace of economy recovery, the Board of Directors did not recommend the payment of dividend this year and instead, advised that the capital be conserved and put to use for capital asset expansion. Following shareholders' approval, we have given effect to business transfer agreements entered into during the quarter for the transfer of data center business and digital services business to wholly owned subsidiary companies. I will now hand over to our Chairman for his closing remarks. Chairman?

Thank you, Vijay. A good number of the enterprises still didn't transform themselves during the first phase of the pandemic has begun exhibiting renewed enthusiasm towards the adopting of automation, digital transformation and cloud adoption. Many of them are thinking to outsource the complete IT to players like us who can provide the data centers, hybrid cloud and the network, and we are seeing a lot of demand in these integrated solutions, one-shop, end-to-end, providing data centers and hybrid cloud and the network. So we are going to see more and more our increasing of interest in the data centers enterprise -- Indian enterprises looking for the data centers and the cloud and the network. So we are going to continuously -- like our CFO, Vijay, mentioned, we are going to continuously invest our data centers, and we are developing a lot of the excellent data centers in all our areas in all our regions. And we are going to continue to invest and we will accelerate because the demand of the data center, as you know, India is growing. And similarly, not only the data centers and the network, the bandwidth consumption is increasing, and we are going to invest in our network technology across the country. And also, our digital transformation, like our multi-cloud platform and our digital services platform, that is also we are going to increase. So thank you for joining us on this call. I will now hand over to the operator for questions. Operator?

[Operator Instructions] And our first question today is coming from Greg Burns at Sidoti Company.

Can you just talk about the business transfer agreement for the data centers? What the rationale for that is or what that means for this perspective?

See, Greg, the rationale is because people maintaining their own server rooms and their own data centers. It's very hard to keep up with the kind of manpower required and the resources required to run Tier 3 or what are the high-level redundancy, high-level running up the SLAs for the data center. So instead of building their own -- living in their own server rooms or having their own data centers, they are adopting more of outsourcing their data centers. So that is where we are seeing a lot of the data center usage. Second, hyperscalers. So we have all the major hyperscalers are in India. And the people started using the cloud adoption and hyperscalers with their scale, so we are seeing exponential growth in the cloud adoption and which is helpful for the hyperscalers. And at the same time, people not completely 100% committed to hyperscalers where people are creating hybrid solutions, which with the Sify's Cloudinfinit, one of the platform we created intellection property, which can create a hybrid model with hyperscalers. So that is where we see the adoption across the data centers and hyperscalers and the hybrid cloud models.

Okay. Thanks for that color on the demand. I was more asking about the business transfer agreement you mentioned or Vijay mentioned, you're moving the data centers to wholly owned subsidiaries. Could you just help me understand what that means, rationale there?

Okay. Vijay? M. Vijay Kumar: Yes. Greg, given the fact that the data center businesses are scaling, and as you know, they are capital intensive and in contrast, the digital services business is more IP-led and involves people and tools. So to bring in more customer focus and given the different delivery mechanisms, we believe that it is time that we should create independent companies for these 2 businesses, both of which are wholly owned subsidiaries. So at a consolidated level, they don't mean any different. But organizationally, they help the companies to grow at a faster pace and become larger businesses over time.

Okay. Great. All right. In terms of the investments you mentioned for next year, what is your projection for CapEx for the full year for the next fiscal year? M. Vijay Kumar: We expect it to be a little more than what we had invested last year. The year which went by, we spent about INR 3,483 million. Assuming pandemic does not disturb much of capacity creation, we should be able to invest much more than what we had done in the previous year.

Okay. And then relative to -- you also mentioned investing in or spending a little bit more maybe on people and tools to help your digital service transformation capabilities. How should we think about the EBITDA margin for next year, do you expect it to contract maybe a little bit given the spending or how should we think about that? M. Vijay Kumar: I don't want to sound much on forward looking. But as far as our current visibility goes, we should be able to maintain the EBITDA margin unless the pandemic becomes so extreme, has a different implication. But as we see now, we should only get better with scale, and you have witnessed over a period of time, the EBITDA margins have been gradually improving year-on-year. And we have had a nonlinear growth in EBITDA vis-à-vis the revenue.

Right. Okay. And then in terms of the -- I'm sorry. Okay. Sorry, I lost my train of thought. So in terms of the data centers, could you just maybe give us an update on your existing network, capacity utilization is there and your plans for bringing on additional capacity throughout the year?

No. But that said, being with the current COVID situation, we cannot give -- completely picture. We have a great plan to bring this year as much as what we have. Today, we have 10 data centers, and we are planning -- we are in the process of building 4 more data centers this year and the next 18 months. And those things will continue because we started. And only the thing is depending upon these lockdown situations could change our readiness for the operations. But what we see is overall, the growth of the digital transformation in India. One way COVID is bad but the other way is the digital transformation is accelerated in India. And what we see it is in the next 4, 5 years, I think for my organization, the current data center could be 3 to 4x growth in the data center itself.

Okay. All right. And then in terms of how COVID is impacting your business. Is it more -- like you mentioned project cycle times extending. So is that going to maybe more start to impact the Technology Integration Services side of the business? Or do you see maybe it's slowing growth a little bit on data centers and cloud until maybe businesses are -- or some knockdown measures are relieved?

Yes. No, these are projects that will slow down a little bit. But in general, the overall lockdown, will slow down the business, but hoping this thing will go over soon. But at the same time, they need also digital transformation tick up to keep up with this lockdown situation. So -- because the organization still running, right? And they're moving more into the digital way, right? The banks are still working, right? So one way they maybe add up the new technologies to make it as a digital company and stuff, you need to be present physically kind of thing. So overall, we see it as a growth, but what is COVID challenge, is not clear to us at this point.

Our next question today is coming from Jon Atkin at RBC.

So maybe continuing the data center theme. Just interested in the mix of demand that you're seeing between Indian enterprises and hyperscalers, how is that shifting? And is there any kind of change in the activity level in terms of either procuring capacity or moving in equipment on the part of the international hyperscalers in India?

So Jon, I think we are seeing the same demand what was there before. The hyperscalers growing very well. And the adoption of the hyperscalers, that means the public clouds by Indian enterprises are accelerating every month and month. Similarly, at the same time, adoption of the hybrid also increasing. So we are seeing the nice growth and probably 70-30 or 80-20 kind of adoption. And I think we'll continuously will grow in that adoption. And we don't see -- maybe it may slow down a couple of months because of this COVID, but we don't see that formula, that equation changing between the hyperscalers at a public cloud versus the private hybrid cloud. I think that adoption will continue. As that adoption will continue and the demand for the data centers will grow continuously, we see the demand for the data centers continuously growing because India still is in the very early stage of the adoption of the digital transformation, which is the data center is the backbone for the digital transformation and the hypercloud sale.

Okay. A couple of weeks ago or maybe months at this point because there was the announcement with AMS-IX. And I just wondered how that benefits your business? Is it kind of like a marketing benefit? Or does it specifically benefit the network business or does it create more of an attraction for your data center services? Or how do we think about the economic impact? Or is it too early to really assess that?

It's too early to assess what is the numbers point of view, but the benefits, what you said is it's all about, right? So marketing, right? How do you market our data centers versus the people who provide just a data center. Second is our network, integrated solutions and connecting with our data centers. So overall, it gives us -- see, the way I look at it is cloud is not just a data centers, right? Cloud means data center plus network. So overall, with our strategy going with the data centers plus the network, that is a unique position for Sify to offer integrating both the data centers and the networking. So we are going to bring those kind of technologies more and more to make it -- like I said, we want to be an integrated player instead of just providing just for the Indian enterprises just a polo service or vanilla servicing.

And then finally, just wanted to ask you about partnerships. There has been some recent ones, I think, even since the last earnings call, with international partners partnering with Indian conglomerates to develop data center businesses and given how capital-intensive these projects can be, how do you think about that as a possible option for Sify?

So we always -- there is always partnership opportunities are coming. So far, the Sify has good financial statements, as Vijay Kumar mentioned. We are going to continuously invest what the CapEx is required. And we also don't have any challenges procuring the loans. And we are looking for -- we always look for the data center -- a partner who is required, brings the value to the -- our current value proposition. So we are open, and we are continuously -- people come and engage with us. So we are looking for right partners in this kind of game. And so far, we are doing -- because we are established player in the data centers, right? Some of the new players coming, they're trying to validate themselves, could be a data center provider. But we are serving the data centers for the last 20 years. We are the first data center, Tier 3 data center provider in India, and we have 10 data centers, and we are serving 3 hyperscalers in India. And so we have -- and we are servicing most of the banks and insurance companies in India. So for us, we don't need an international brand to validate our data center business. So that's what is different compared to some of the new players trying to validate themselves as a data center player.

We have no further questions in the queue at this time. Do you have any closing comments you would like to finish with?

Thank you. The entire Sify family offers its condolences to people who have lost dear ones during the pandemic. Please continue to wear mask up and protect yourself and everyone else. Thank you for your time.

Thank you, ladies and gentlemen. This does conclude today's event. You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation.