Syntel Q4 revenues up 20 Percent

Mumbai: Bharat Desai, Chairman and CEO of Syntel Inc. a global information technology services firm, announced the financial results for the fourth quarter and full-year ended December 31,2003.

Syntel's total revenue for the fourth quarter increased 20 percent to $47.4 million, compared to $39.4 million in the prior-year period and 7 percent sequentially from $44.1 million in the third quarter of 2003. The Company's gross margin was 43.6 percent in Q4 of 2003, compared to 43.6 percent in the prior-year period and 41.6 percent in the Q3 of 2003.

Income from operations was 27.5 percent in Q4, compared to 38.3 percent in the prior-year period and 29.5 percent in Q3 of 2003. Matters of litigation related to the Metier transaction, an IT services company that Syntel acquired in 1999 were settled during the fourth quarter of 2002. Accordingly, $5.7 million of accrued Metier liabilities were reversed into income during that quarter, resulting in higher than usual income from operations.

Net income for the fourth quarter was $10.9 million or $0.27 per diluted share, compared to $11.2 million or $0.28 per diluted share in the prior year period, and $10.8 million or $0.26 per diluted share in the third quarter of 2003.

For the full-year 2003, Syntel's revenue increased more than 11 percent to $179.5 million, compared to $161.5 million in 2002. Net income for 2003 was $40.3 million or $0.99 per diluted share, compared to $32.5 million or $0.81 per diluted share in 2002. The Company finished 2003 with gross margin of 43.3 percent compared to 41.8 percent in 2002. Year-over-year, Syntel's key focus area of applications outsourcing grew by 19.7 percent and now accounts for 76 percent of total revenue.

Syntel's financial position and cash generation remain very strong. The Company ended 2003 with $136.8 million in cash and marketable securities. In the third quarter of 2003, Syntel paid a special one-time dividend of $1.25 per share and initiated a $0.06 per share quarterly dividend. The Company remains debt-free.

Syntel has grown from US$ 2000 as a start-up over 22 years ago to a company with a market capital of approx. US$ 1.2 billion. Its India global development centers are located at Mumbai, Chennai and Pune.

"We are very pleased with our performance for the fourth quarter and full-year, as we continued to show improvement across our key business metrics, for the first time, Syntel delivered a higher percentage of client work from India, which reflects customer demand and our strong push to more fully leverage our robust Global Development Center network." Said Bharat Desai