New York-based equity research firm Kauffman Bros had initiated coverage of Sify from last quarter. In a post-result analysis of Sify, Sameet Sinha, the digital media analyst at Kauffman, has recommended a buy on the Indian internet company with a price target of $17 (currently $13). Sify had cut losses to $3.35 million in 2005-06 from $6.9 million in 2004-05. It had touched revenues of $105 million and has been showing traction in the portals business.
Sinha On The Portals Business
Portals (Q4 2005): This business exhibited strong growth with revenues of $1.27 million versus our estimate of $1.2 million. Advertising revenues finally broke through the $1 million figure, but were offset by a decline in the mobile content business. Sifymax contributed about 35% of advertising revenues, down from 40% in the previous quarter – this indicates that the revamped Sify.com portal grew faster than Sifymax, another encouraging sign of the turnaround gaining traction.
On Access Media Business
Access Media (Q4 2005): This business was affected by seasonality and revenues came in at $10.8 million versus our estimate of $11.7 million. On the residential broadband side, total subscribers came in at 183,000 versus our estimate of 172,500. The core iway (cyber cafe) revenues were affected by exam season in India, which led to lower traffic into the cafes (we had not modeled for this). VoIP revenues were up more than 50% sequentially to around $2 million.
He expects 2007 revenues to be $134 million and 2008 revenues to grow to 168 million.
Related:
Earnings: Sify Touches $105 Million In Revenues; Cuts Losses
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