Sify Technologies kicked off FY 2026 with a solid performance during the first quarter, reporting revenue of ₹10,723 million, a 14 percent rise compared to last year. At the same time, EBITDA climbed 18 percent, reaching ₹2,111 million. That tells you Sify is expanding its reach and managing its operations smartly, even in a challenging business climate.
Data Center Expansion and New AI Offering
Bolstering its foothold in the data center space, Sify commissioned an additional 8.6 MW of capacity this quarter, growing its total to 138 MW. The company also launched a pay-per-use AI hosting model. This new service, certified by NVIDIA and featuring liquid-cooling tech, is a big bet on the rising trend for AI infrastructure.
Profitability Under Pressure
Here’s the thing: while the top line shows momentum, the bottom line is still under stress. Sify reported a loss before tax of ₹322 million and a net loss of ₹389 million. The shortfall comes from depreciation charges, rising interest costs, and manpower expenses tied to expansion and hiring.
Breakdown by Business Segment
Let’s break it down by divisions. For Q1, the revenue split was roughly 41 percent from network services, 37 percent from data center colocation, and 22 percent from digital IT services. While network and data center lines are growing, the digital segment is lagging. Flat growth and increased losses are being squeezed by upfront technology investment.
Strategic Investments and Balance Sheet
Sify is pouring capital into growth. They logged ₹2,874 million in CAPEX and expanded operations across 1,159 fiber nodes and 9,661 SD-WAN service points nationwide. But there’s a cost. Net debt rose to ₹30,321 million, up from ₹23,115 million last year, while cash reserves slipped to ₹3,861 million.
Leadership’s Vision and Outlook
On the earnings call held July 18, 2025, Chairman Raju Vegesna emphasized India’s pivotal moment in digital infrastructure development. He highlighted that initiatives like Digital India and the AI mission are sparking big investments and said this decade will define India’s future in high-performance compute and AI workloads. CFO M P Vijay Kumar added that while short-term profitability is under strain, these moves are deliberate bets on long-term value, backed by cost discipline and calculated risk.
What It All Means
Here’s the takeaway: Sify is growing its core business and doubling down on infrastructure, especially in data center and AI hosting. But those gains are being offset by rising costs. The company sees this as a necessary trade-off. Invest now, harvest later. That strategy hinges on India’s ongoing digital transformation, which Sify aims to cash in on.
For investors and observers, the key question is whether revenue and infrastructure expansion can outweigh margin pressure in coming quarters. If demand keeps climbing and Sify’s new AI-centric offerings gain traction, they could be positioned to turn losses into sustained profits.
