SIFY TECHNOLOGIES LTD

Where It Passes

Where It Falls Short

• Debt & Leverage0% pass✗ 15▾

  All 12 investors flag SIFY's debt & leverage

  LT Debt vs Net Current AssetsLT Debt $330.0M vs NCA $-12.9M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 1.76, IC: 0.8x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity1.76

  ✗Lynch< 0.33

  Cash - Long-term Debt$-271.5M

  ✗LynchPositive preferred

  LT Debt / Total Assets Change32.90% -> 33.93%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities0.96

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity1.76

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt Levels1.76

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=0.8x, D/EBITDA=4.5x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity1.76

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-1.7572; #3703/4210 (top 88.0%)

  ✗AsnessTop 30% of eligible cross-section
• Valuation0% pass✗ 28▾

  All 13 investors flag SIFY's valuation

  Price / 3-yr avg EPS276.5x

  ✗Graham<= 15x

  Price-to-Book Ratio3.9x

  ✗Graham<= 1.5x

  P/E x P/B1,071.2

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value2.1%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=2.1%, ROC=5.6%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)9.0x

  ✗Dreman< 8x

  Price / Book Value per Share3.9x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessOE Yield=-8.0%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=-3.1%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/B=3.9x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value-1743.6% (IV=$0.11 vs Price=$2.10)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Price vs. Trailing Low389% of trailing low ($0.54)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization-1.01%; #3404/6340 (top 53.7%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.2579; #3892/6449 (top 60.4%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share3.87x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.5109; #2599/5247 (top 49.5%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization-3.13%; #2842/4519 (top 62.9%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-8.50%; #3346/6202 (top 54.0%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Efficiency0% pass✗ 11▾

  All 8 investors flag SIFY's efficiency

  Current Ratio0.96

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)6.8%

  ✗Buffett> 10%

  ROIC - WACC-3.2%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)5.6%

  ✗Greenblatt> 25%

  Current Ratio Change YoY1.02 -> 0.96

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.50x -> 0.48x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities0.96

  ✗Dreman> 1.5

  Return on Invested Capital3.2%

  ✗Munger> 15%

  ROIC (high and growing)FY2022: ROIC=5.7%; FY2023: ROIC=3.9%; FY2024: ROIC=3.2%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest 3.2%)

  ✗SleepROIC > 12% in a majority of years
• Verdicts0% pass✗ 16▾

  Split decision: 15 FAIL · 1 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (1/9)✗LynchFAIL (0/7)✗GreenblattRank #1709✗PiotroskiFAIL (F-Score 3)✗DremanFAIL (0/11)✗MungerFAIL (1/4)✗PabraiFAIL (0/3)✗AkreFAIL (0/6)✗MarksFAIL (1/5)✗AckmanFAIL (2/9)✗TempletonFAIL (1/8)✗SleepFAIL (2/6)✗AsnessFAIL (Rank #1683/2370 (Top 71.0%))✗NeffFAIL (1/6)✗SchlossFAIL (1/7)•OshaughnessyNEUTRAL (Not ranked)
• Valuation models0% pass✗ 5▾

  SIFY overvalued: all 5 models price fair value below $12.60 (median $0.62)

  Greenblatt fair value$0.53

  ✗Greenblatt-296.2% margin vs $12.60

  Dreman fair value$0.15

  ✗Dreman-1300.0% margin vs $12.60

  Akre fair value$0.62

  ✗Akre-238.7% margin vs $12.60

  Marks fair value$0.89

  ✗Marks-136.0% margin vs $12.60

  Templeton fair value$0.70

  ✗Templeton-200.0% margin vs $12.60
• Profitability6% pass✓ 6✗ 29▾

  15 of 16 flag SIFY's profitability — Graham, Buffett, Lynch +12 more

  Positive EPS (10 years)9/11 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)-86.8%

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)9/11 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)4.4%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)5.7% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-35.0M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)0.71

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE-3.9%

  ✗Lynch> 15%

  EBIT / Enterprise Value2.1%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=2.1%, ROC=5.6%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-0.94%

  ✗PiotroskiROA > 0

  ROA Change YoY0.24% -> -0.94% (delta: -1.18%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=10.40%, ROA=-0.94%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY37.2% -> 37.5%

  ✓PiotroskiImproved YoY

  Pre-Tax Income / Revenue-0.7%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity-3.9%

  ✗Dreman> 12%

  Margin of SafetyP/B=3.9x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity0.5% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value-1743.6% (IV=$0.11 vs Price=$2.10)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency9/10 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue5.7%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity-3.9%

  ✗Ackman>= 15%

  5-Year EPS CAGR-50.5% CAGR over 4 years

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend7.9% (2022) -> 5.7% (2024)

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 36.0% -> 37.5%, operating margin 7.9% -> 5.7%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization-1.01%; #3404/6340 (top 53.7%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+18.00%; #2193/3702 (top 59.2%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity-3.90%; #3151/5226 (top 60.3%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0180; #1332/5884 (top 22.6%)

  ✓AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR-49.9% over 5 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years9/10 years positive

  ✓Schloss>= 70% positive over 5-10 observed years (app rule)
• Growth13% pass✓ 3✗ 10▾

  7 of 8 flag SIFY's growth — Graham, Lynch, Dreman +4 more

  EPS Growth (3-yr avg, 10-yr window)-86.8%

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 13.8% vs Rev: 9.1%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction$0.05 (2015) -> $-0.02 (2024)

  ✗DremanPositive over recent years

  EPS CAGR-28.7% CAGR over 8 years

  ✗Dreman> 5% annualized

  Positive Net Income Frequency9/10 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth9.1%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency1/5 years with positive EPS growth

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR-50.5% CAGR over 4 years

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 36.0% -> 37.5%, operating margin 7.9% -> 5.7%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR8.9%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR-49.9% over 5 years

  ✗Neff7%-20% annualized
• Cash Flow20% pass✓ 3✗ 9▾

  8 of 10 flag SIFY's cash flow — Buffett, Lynch, Dreman +5 more

  Free Cash Flow Proxy$-35.0M

  ✗BuffettPositive and growing

  FCF Positive and Growing$-28.6M

  ✗LynchPositive and growing

  Operating Cash Flow$101.1M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=10.40%, ROA=-0.94%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)9.0x

  ✗Dreman< 8x

  P/E or FCF YieldFCF Yield=-3.1%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive5/10 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap-3.1%

  ✗Ackman>= 4%

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency10/10 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$-28.6M

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization-3.13%; #2842/4519 (top 62.9%)

  ✗OshaughnessyTop 10% of eligible cross-section