Sify Technologies revenue rises 15%, led by data center demand
Sify Technologies reported a 15% YoY revenue increase to INR 12,352 million for Q1 FY26-27, with adjusted EBITDA up 42% to INR 3,005 million. Capex was INR 6,708 million as the company expands data center capacity and modernizes its network. The firm is preparing for the IPO of Sify Infinite Spaces and plans to build edge data centers in tier 2 and 3 cities.
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Sify Technologies reported a 15% year-over-year revenue increase to INR 12,352 million for Q1 FY26-27, driven by demand for data center and network services. Adjusted EBITDA rose 42% to INR 3,005 million, while profit for the quarter stood at INR 65 million. The company is heavily investing in capacity expansion and network modernization to address emerging demand from AI, cloud, and data-intensive workloads, with capital expenditure for the quarter at INR 6,708 million.
Financial Performance
The revenue split for the quarter was Network Services at 39%, Data Center Colocation Services at 42%, and IT Digital Services at 19%. The company’s cash balance at the end of the quarter was INR 4,597 million. Management noted that while investments in infrastructure and talent continue to influence depreciation, interest, and people costs, these are aligned with long-term growth objectives.
| Metric | Q1 FY26-27 Value |
|---|---|
| Revenue | INR 12,352 million |
| Adjusted EBITDA | INR 3,005 million |
| Profit | INR 65 million |
| Capital Expenditure | INR 6,708 million |
| Cash Balance | INR 4,597 million |
Data Center Expansion
Sify’s data center business sold 5 megawatts of capacity during the quarter. As of 30 June 2026, the operational live revenue-generating capacity is 134 megawatts, while the designed and ready capacity is 188 megawatts. The company has 150 megawatts of capacity under construction and aims for future operational capacity to exceed 220 megawatts. Management highlighted a temporary margin reduction in the data center business due to a one-off power tariff revision at one facility, which could not be immediately passed on to customers.
Strategic Initiatives
The company is preparing for an IPO for its subsidiary, Sify Infinite Spaces, with bankers actively evaluating market conditions. Management emphasized that the IPO remains the primary target, though Kotak has committed to supporting equity growth if the listing is delayed. Sify is also expanding its footprint in tier 2 and tier 3 cities, having completed data centers in Lucknow and Chandigarh, with plans to build 10 to 12 edge data centers over the next few years.
Operational Highlights
Network services infrastructure expanded, with fiber nodes increasing 7% year-over-year to 1,238 across the country. The digital services business reported negative EBITDA, with management focused on reducing losses quarter-on-quarter and achieving profitability. Network revenue is expected to grow organically in the mature market.
What is the expected timeline for the IPO of Sify Infinite Spaces, and how will current market volatility impact the valuation?
How will the significant increase in capital expenditure affect free cash flow and leverage ratios in the coming quarters?
What strategies are being implemented to turn the digital services business profitable, and when is EBITDA breakeven expected?
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