Sify Technologies reported QQ2 2026 revenue of INR 10.533 billion, up 3% year-over-year per management commentary, with EBITDA of INR 2.361 billion and an operating margin of 6.7%. While EBITDA growth (+20% YoY) reflects ongoing efficiency and scale initiatives in the Network Services and Data Center segments, the company posted a net loss of INR 275 million for the quarter, driven by continued investments in digital services and data center capacity expansion. Management reiterated a deliberate, long-horizon strategy to build future-ready capabilities across three core platforms (Network Centric Services, Data Center Services, and Digital Services), with a strong emphasis on AI-enabled, hyperscale data center growth and edge computing in India.
Key strategic themes discussed on the earnings call include: (1) a robust data center expansion program supported by a design capacity of ~188 MW (with ~130 MW already built) and a pipeline for multiple greenfield projects; (2) a structured IPO path for Infinite Spaces (data center stack) via a holding company, with Kotak's debenture conversion and a plan to maintain significant parent equity, signaling a capital-raising catalyst to meet rising capacity demand; (3) margin dynamics in Network Services being structurally challenged by early-stage AI infrastructure investments, with management forecasting a return to 20%+ margins as utilization and AI-related deployments scale. Investors should monitor the progression of data center monetization, incremental margins from network investments, and the execution of the Infinite Spaces IPO.
Overall, Sify remains positioned to benefit from India’s AI-led digital infrastructure expansion, but near-term profitability is pressured by high capital expenditure and strategic investments in growth initiatives. The stock-specific catalysts include improved data center project IRRs, edge data center deployments, and regulatory/structural milestones around the Infinite Spaces offering.