SIFY: Close but still no profit.
Sify Ltd. continued its trend of disappointing its shareholders with another profitless quarter. Although, the losses went down to $230,000 the revenue number didn’t meet expectations. Even though, the revenues increased 27% to $26.7 million, the growth in sequential revenue was only 2.5%. Considering that 3rd quarter numbers always are on a high side this was a very disappointing quarter.
The only positive from this quarter was the growth in the Portal business of 17% sequentially and 82% from the same quarter last year. The primary reason for this growth was the broadband content via http://www.Sifymax.com
The market and Jim Cramer took the news of CFO/COO George Zacharias leaving, to join Yahoo! India, pretty hard. I don’t see it that way. George Zacharias, although an integral part of Sify, never did a great job of promoting the company and the financial results as the CFO. It’s time for some new blood at SIFY and this might get them to rethink their policy of “No future Guidance”. They could have stopped the bloodbath in share price today by giving guidance.
Other Highlights
- Iway’s continue to grow at a tremendous rate
- Online gaming and Internet Telephony grew at a rate of 50% and 30% respectively.
- Plans for international expansion in neighboring countries (Nothing to get too excited about)
- SIFY restructured into three Business Units: Enterprise Services, Access Media and Portals
Finally, look for Sify Ltd. to continue to go down. With the earnings disappointment from Yahoo Inc., Intel corp. and IBM, look for a bloodbath tomorrow for Tech stocks.
This might present a great buying opportunity in Sify Ltd. Sify should be profitable next quarter (Although, when it comes to Sify there is no guarantee). Long term growth still seems very bullish with India and the internet sector in the country growing at a tremendous rate. However, with opportunity comes competition and there is plenty of that for SIFY. Next quarterly results will decide the future of Sify and the talent of its management team.
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