Patni Q3, 2006 Net Income up 37% at $22.3 Million (Rs 1,024 Million)

Performance Highlights for the quarter ended Sept 30th 2006

• Revenues for the quarter at US$ 151.7 million (Rs 6,971 million)
• up 6.1% sequentially from US$ 143.0 million (Rs 6,561 million) in quarter ended June 30, 2006
• 28.3% higher compared to US$ 118.3 million (Rs 5,197 million) in quarter ended Sep 30, 2005
• Operating Income at US$ 25.1 Million (Rs 1,153 million) on the back of improved operating efficiencies
• up 46.4% sequentially from US$ 17.1 million (Rs 786 million) in quarter ended June 30, 2006
• 40.8% higher compared to US$ 17.8 million (Rs 783 million) in quarter ended Sep 30, 2005
• Net Income at US$ 22.3 million (Rs 1,024 million )
• up 33.4% sequentially US$ 16.7 million (Rs 766 million) in quarter ended June 30, 2006
• 37.2% higher compared to US$ 16.2 million (Rs 714 million) in quarter ended Sep 30, 2005
• EPS for the quarter at US$ 0.16 per share, (Rs 7.42 per share ); US$ 0.32 per ADS
• Top Customer contribution towards revenue decreased to 14.1% during the quarter from 14.5% in Q2 2006. Revenue concentration of Top 10 clients also reduced to 51.6% from 54.1% in the previous quarter.
• Number of active clients was 235 at quarter end as compared to 220 in Q2 2006. Patni acquired 27 new clients during the quarter.

Management comments
Commenting on the Q3 2006 performance, Mr. Narendra K Patni, Chairman and CEO, Patni Computer Systems Ltd., said, "I am delighted to report a strong increase in revenue and net income in the quarter under review which is a result of new client acquisitions and efficient management of our cost structure. We are witnessing healthy demand escalation across all our verticals and service lines. To ensure adequate preparedness to meet this demand, we are expanding our facilities. Further, in continuation of our drive towards profitable growth we have reorganized our management team, as a result of which I expect greater focus and accountability thrust across the organisation.

Over the medium to long term, I remain confident of our ability to capture the growth opportunities and translate them into ongoing value enhancement for all our stakeholders"

Commenting on the performance, Mr. Mrinal Sattawala, Chief Operating Officer, Patni, said, "This quarter saw us delivering good operating efficiencies. We improved our resource utilization for both offshore and onsite projects in addition to improvements in other operating parameters. During the period under review we have added 27 new clients, bringing our tally of active clients to 235. Additionally, in line with our overall business strategy, we maintained our thrust on diversifying our revenue stream which is reflected in reduced reliance on our Top 5 and Top 10 clients. These developments strengthens our confidence in our ability to maintain our strong & profitable growth momentum"

Speaking on the occasion, Mr. Surjeet Singh, Chief Financial Officer, Patni, added, "In Q3 2006, we executed well on our operating efficiency improvement plan. A reduction in G&A, improvement in operating parameters including utilization coupled with revenue growth has led to sustainable margin expansion in the quarter. We continue to focus on managing our cost base more efficiently and driving profitable growth through our investments in service capabilities."

Corporate developments in Q3 2006Patni Ranked Highest among Indian Offshore Supply Chain Solution Providers in Customer Satisfaction
Patni received the highest customer satisfaction rating among Indian offshore supply chain solution providers in a Forrester survey. The survey, "Ranking Supply Chain Management Tools and Services", conducted by Forrester Research, Inc., in June 2006, queried 167 supply chain decision makers in North America. It examined their satisfaction with supply chain software and service providers, as well as their plans for additional investments.

Patni and Savvion enter into a strategic alliance
Patni has formed a strategic alliance with Savvion, the industry’s leading business process management (BPM) company. Patni will leverage its deep domain expertise and knowledge of industry best practices to help people within organizations to collaborate, control, and improve business processes to drive business success with Savvion BusinessManager.

Patni received award at CIO 100
Patni was recognized as one of ‘The Giant 100’ companies at the CIO 100 awards in India for demonstrating excellence in deploying technology solutions to deliver optimum business value. Patni received the awards at the CIO Symposium and Award ceremony in Mumbai. The award was presented to Patni for its technology vision in building a Corporate Performance Management System (CPMS).

Patni Connect
Patni successfully concluded its third annual customer forum - ‘Patni Connect 2006’ - in the U.S. The Patni leadership team exchanged views with IT and business leaders representing their customer organizations, other pre-eminent industry analysts and professionals.

Source : Equity Bulls

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