Total revenue for the 2001 second quarter was $42.7 million compared to $42.1 million in the year-ago period. Revenue for Syntel’s two strategic focus areas Applications Outsourcing and e-Business increased nine percent to $36.7 million. These two strategic areas represented 86 percent of the total revenue reported this quarter, compared to 80 percent for the second quarter 2000.

Pro forma net income increased 21.2 percent to $6.6 million compared to $5.4 million in the year-ago second quarter. The Company’s pro forma earnings increased 21 percent to $0.17 per diluted share, compared to pro forma earnings of $0.14 per diluted share in the 2000 second quarter, (results for the 2000 period exclude a one-time goodwill write-off charge associated with the 1999 acquisition of Metier.)

Syntel had a solid quarter, highlighted by better-than-expected earnings, reflecting increased leverage from our offshore delivery capabilities, said Bharat Desai, Syntel’s Chairman and CEO. The current economic downturn is accelerating the rate at which Global 2000 corporations are taking a closer look at the offshore IT outsourcing model. As a U.S.-based organization with a substantial offshore infrastructure, Syntel is ideally positioned to capitalize on this trend. We were successful in launching 65 new engagements in the second quarter, a 20 percent increase over the first quarter, including multi-year, multi-million dollar engagements with GMAC and Wells Fargo.

Sanjay Chheda, Director of Syntel India and Interim Chief Financial Officer added, From a financial perspective, the second quarter was quite successful as our gross margin improved 2 points to 39 percent, and our operating margin improved 3 points to 19 percent, sequentially. These results reflect the continued growth of our global delivery services.

The financial attributes of the Company are strong and growing. Syntel generated $15 million in cash flow from operations and ended the quarter with $86 million in cash up from $78 million at the end of the first quarter 2001. The Company also has no debt and has access to unused credit facilities.

SOURCE: COMPANY PRESS RELEASE