It's been a good year for Sify
Investors looking for Internet plays in India have a limited selection of pure plays.
Then we get to Sify. The Indian provider of connectivity, hosting, and other IT-related services is well positioned for the inevitable dot-com revolution in its country. It also has some skin on the content end. Its Sify Movies website is one of India's fastest-growing movie portals.
These aren't the companies that one typically associates with India. Automaker Tata Motors
That may change soon. India's Draft National Telecom Policy promises to ramp up Web access throughout the country, but the cyberspace migration has been slow.
Unlike with China -- where investors have dozens of Internet hopefuls to choose from -- these are the three stateside-trading stocks that have all of their rupees in India's Web basket. If anything, Sify may deserve an asterisk. It's been branching out overseas. Sify turned heads in March after expanding into the Middle East through a partnership with Saudi Telecom.
Sify grew its revenue by just 6% in its latest quarter, but its deficit narrowed substantially. Three months earlier, Sify's second-quarter revenue popped by a robust 31%. The market reacted favorably to both reports, unlike the one before its back-to-back winning performances.
Sify's stock took a hit last month. It was unfortunate enough to have a joint venture with the ill-fated MF Global in India, and even as a minority investor this will leave a dent. However, that's just one of the many moving parts at Sify.
Buying international stocks is risky. There's always the fear that you'll be the last to know when things happen, a problem that was illustrated perfectly this summer when The Wall Street Journal pointed out the wide discrepancy that different financial sources have in reporting the number of Sify shares outstanding. The number of shares has actually more than tripled over the past two years after a dilutive -- and heavily discounted -- offering.
The volatility has paid off for Sify investors this year. The stock may have shed more than half of its value since peaking in April, but the shares are trading surprisingly 68% higher since the year began.
Despite the dilution realization and bumpy financials over the past year, Sify's in the right place for India's upcoming dot-com revolution.
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