The Good And The Bad About Sify

Here is an analysis of Sify Ltd in the wake of the new management and so on. It seems Sify is the favourite pastime of Indian-origin analysts in the US. Himanshu PandyA’s take below.

What Is Good:

# The new CEO, Raju Vegesna, has stated that focusing internationally is their number one priority.
# Sify is focusing on content for its portal since it’s very hard for Indian portals to compete with Yahoo and Google over services such as Email and Instant Messenger. This is the right strategy.
# The new local portals for Indian cities.
# Infrastructure Outsourcing – Sify won 2 US customers in Q4 that will generate revenues of $2 million each year for the next 5 years.
# Gaming – Still very early in India but a huge market.
# Online Travel – Another growing market but a lot of competition. Sify will have to leverage its portals and cyber cafes to promote the travel site.
# Cyber Cafes – Lots and lots of potential here.
# Potential buyout target

What Is Bad:

# Sify faces major competition in pretty much every field.
# Sify has failed to take advantage of the mobile growth in India.
# The stock is relatively unknown when compared to other Indian stocks even though it was the second Indian company to list on NASDAQ.
# Competition and margins are tough in the ISP business.

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