BWI: Syntel Reports First Quarter 2009 Financial Results

Press release from Business Wire India
Source: Syntel, Inc.
Monday, April 27, 2009 09:32 PM IST (04:02 PM GMT)
Editors: General: Economy; Business: Accounting & management consultancy services, Banking & financial services, Business services, Financial Analyst, Information technology, Stock exchanges; Technology
Release no: 19794
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Syntel Reports First Quarter 2009 Financial Results


Mumbai, Maharashtra, India, Monday, April 27, 2009 -- (Business Wire India) --
. Q1 revenue decreased 2% yoy to $96.4M (Rs.484 crore)
. Q1 Operating Income grows 37% yoy to $26.1M (Rs.131 crore)
. Q1 Net Income increases 34% to $27.3M (Rs.137 crore)
. Q1 EPS of $0.66 per diluted share
. Added 4 new clients this quarter;
. Work progresses on new campus construction in Chennai. Phase I is tracking for initiation in Q4 of 2009.
. Syntel is updating 2009 guidance,
-- from Revenue of $385 (Rs.1925 crore) to $425 (Rs.2125 crore) million to Revenue of $385 (Rs.1925 crore) to $415 (Rs.2075 crore) million and
-- from EPS of $1.66 to $2.08 to EPS of $2.12 to $2.42;

Syntel, Inc. (NASDAQ: SYNT), a global information technology services and Knowledge Process Outsourcing (KPO) firm, today announced financial results for the first quarter ended March 31, 2009.

First Quarter Financial Highlights

Syntel's total revenue for the first quarter decreased 2 percent to $96.4 million (Rs.484 crore), compared to $98.5 million (Rs.495 crore) in the prior-year period. The Company's gross margin was 46.5 percent in the first quarter, compared to 40.3 percent in the prior-year period (620 bps increase).

Syntel's income from operations expanded to 27.1 percent in the first quarter, compared to 19.4 percent in the prior-year period (770 bps increase) .

Net income for the first quarter was $27.3 million (Rs.137 crore) or $0.66 per diluted share, compared to $20.4 million(Rs.102 crore) or $0.49 per diluted share in the prior-year period.

During the first quarter, Syntel added 4 new clients and one new "Hunting License" or preferred partnership agreements, bringing the total number to 94 strategic relationships.

Operational Highlights

"We continue to see the impacts of the global recession on our client's behaviors and as a result, Syntel's top line growth. The combination of currency headwinds, pricing pressure and delayed decision making are impacting our revenue," said Syntel Chief Executive Officer and President Keshav R. Murugesh. "Clients are focused on stabilizing their business models, adjusting their strategic plans and prioritizing initiatives going forward. This has resulted in delayed decision making with respect to many projects, and aggressively driving operational efficiency and cost reduction on others."

"In this difficult macroeconomic environment, Syntel remains focused on helping our clients meet their changing business needs and continuing to drive operational efficiencies internally. That being said, we must continue to invest in our business to drive increased value to all key stakeholders including our clients, employees and shareholders. We believe that Syntel remains well positioned to capitalize on the mega-trend towards globalization of services."

Syntel has invested close to $37M (Rs. 185 crore) in 2008 and plans to invest approx. $35Mn (Rs.175 crore) in 2009 as it makes progress on construction of its SEZ campuses in Pune and Chennai. Phase 1 with 2,300 seats in Pune is ready and operational and Phase 1 of our new Chennai campus having built up space of 6,50,000 sq.ft. and 5000 seats will be ready by Q4 of 2009.

2009 Guidance

Based on current visibility levels and an exchange rate assumption of 50.0 rupees to the dollar, the Company is updating 2009 guidance from revenue of $385 (Rs.1925 crore) to $425 (Rs.2125 crore) million and EPS in the range of $1.66 to $2.08 to revenue of $385 (Rs.1925 crore) to $415 (Rs.2075 crore) million and EPS in the range of $2.12 to $2.42

About Syntel

Syntel (NASDAQ: SYNT) is a leading global provider of integrated information technology and Knowledge Process Outsourcing (KPO) solutions spanning the entire lifecycle of business and information systems and processes. The Company is driven by its mission to create new opportunities for clients by harnessing the passion, talent and innovation of Syntel employees worldwide. Syntel leverages dedicated Centers of Excellence, a flexible Global Delivery Model, and a strong track record of building collaborative client partnerships to create sustainable business advantage for Global 2000 organizations. Recently named one of the "50 Best Managed Global Outsourcing Vendors" by The Black Book of Outsourcing, Syntel is assessed at SEI CMMi Level 5, and is ISO 27001 and ISO 9001:2000 certified. As of March 31, 2009, Syntel employed more than 11,700 people worldwide. To learn more, visit us at: www.syntelinc.com.

Safe Harbor Provision

This news release includes forward-looking statements, including with respect to the future level of business for Syntel, Inc. These statements are necessarily subject to risk and uncertainty. Actual results could differ materially from those projected in these forward-looking statements as a result of certain risk factors set forth in the Company's Annual Form 10-K document dated March 12, 2009.


CONTACT DETAILS
Sudhanshu Patni, Syntel, Inc., +91 9930313192, sudhanshu_patni@syntelinc.com

KEYWORDS
ECONOMY, CONSULTANCY SERVICES, BANKING, BUSINESS SERVICES, Financial Analyst, IT, STOCK EXCHANGES, TECHNOLOGY, SYNT.O

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