SIFY to show profit this quarter
According to Dow Jones Newswire, Sify Ltd. CEO, R. Ramaraj, expects the company will turn its first-ever profit in the fourth-quarter. Sify Ltd. (NASDAQ: SIFY) was up almost 18% in after hours trading on Friday. This is great news because the momentum was busted after the third quarter earnings report came out. Sify made daily 52 week highs until they reported their numbers for the third quarter. The inability to turn a profit and revenue not being in-line caused a major pullback. The stock has been hovering around 9-10 range since then.
First of all, I am surprised R. Ramaraj made a comment such as this to Dow Jones. Sify Ltd. never gives guidance, but with loss of only $230,000 last quarter, it was all but sure they would turn profitable this quarter. If he would have just given guidance and made this comment during the third quarter conference call we wouldn�t have seen the pullback.
It would be interesting to see how high Sify goes from here. Sify doesn’t get a lot of attention and hype like the other Indian Stocks. Jim Cramer thinks this is a ‘Indian Internet Solution company”. I have no clue what the hell he means by that. He is on Rediff’s bandwagon which is way over valued right now but keeps breaking 52 week highs everyday. Although profitable, Rediff’s has miniscule revenues and doesn’t have great growth numbers.
REDF Revenue for the Third quarter - $5.02 Million
SIFY Revenue for the Third quarter - 26.7 Million
I have been recommending Sify Ltd. for a long time now and still think is a great opportunity both short and long term.
We have also seen better publicity from Sify Ltd. since Raju Vegesna became the majority shareholder and Chairman. It does seem like Raju Vegesna has started to execute his vision for Sify. 2006 should be an interesting year for Sify.
By the way, I am going to compare Rediff.com India Limited (NASDAQ: REDF) with Sify Ltd. portal division in a future column.
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