Why Long Cast Advisers Loves Sify Technologies Limited (SIFY)

New York-based investment firm Long Cast Advisers sees a value in holding shares of Sify Technologies Limited (NASDAQ: SIFY), which is one of the largest integrated information and communications technology solutions and services companies in India. In its Q1 Investor Letter (you can download a copy here), the investment firm said that Sify would benefit from growth in the Indian digital market. In this article, we’re going to take a look at Long Cast’s comments about SIFY as well as will talk about the company and its performance.

First, here is what Long Cast Advisers said about Sify Technologies in the letter:

They own digital infrastructure and provide services around that infrastructure, which offsets risk of potential commoditization of fixed assets. The company “checks a lot of boxes” that we like to see in investments: A long-term plan successfully and patiently implemented in a cost and capital efficient manner that allows them to invest the proceeds in high return opportunities.

We view this as a business that will benefit from growth in Indian digitization trends. It is a toll collector with fixed telecom and data centers in a market that should continue to experience material growth in Internet traffic over time.

Talking about challenges, the investment firm mentioned ‘competition’ and ‘commoditization’, noting that the “services component alleviates some of these concerns.”

Sify Technologies Limited (NASDAQ: SIFY) is an Indian information and communications technology company that provides end-to-end solutions including telecom services, data center services, cloud & managed services, transformation integration services and application integration services. The company played a major role during the early days of internet and e-commerce boom in India.

For its most recent quarter ending March 31, 2018, Sify reported a 15.79% year-over-year (YoY) increase in revenues to 6.06 billion Indian rupees. Net income for the quarter rose 41.29% YoY to 261 million Indian rupees.

If we look at the company’s performance on the share market, the stock priced has moved up 0.54% over the past three months. However, the value of the company’s stock has surged more than 108% over the past 12-month period, according to Morningstar.

Disclosure: none