Patni Q1 Revenues at $156.4 Million, in Line with Guidance, Operating Margin Higher 7.7% Sequentially

Business Wire, April 29, 2009

MUMBAI, India -- Patni Computer Systems Limited (Patni) (NYSE: PTI) (BSE: PATNI COMPUT) (NSE: PATNI) today announced its financial results for the first quarter ended 31st March 2009.

Performance Highlights for the quarter ended March 31,2009

• Revenues for the quarter at US$ 156.4 million (Rs.7,954.8 million) Down 11.4% YoY from US$ 176.4 million (Rs.7,061.2 million) Down 11.4% QoQ from US$ 176.4 million (Rs.8,570.0 million) Contribution from top customer at 12.3% for the quarter from 11.0% during the previous quarter. Revenue concentration of Top 10 clients declined from 48.7% to 46.9% during the quarter. New client acquisition during the quarter were 22 as compared to 18 during previous quarter.

• Operating Income for the quarter at US$ 16.0 million (Rs.812.4 million) Down 7.8% YoY from US$ 17.3 million (Rs.693.4 million) Up 7.7% QoQ from US$ 14.8 million (Rs.720.1 million)

• Net Income for the quarter at US$ 15.0 million (Rs.760.7 million) Down 17.4% YoY from US$ 18.1 million (Rs.724.6 million) Down 6.9% QoQ from US$ 16.1 million (Rs.780.2 million)

• EPS for the quarter at US$ 0.12 per share (US$ 0.23 per ADS).

Future Outlook:

• Q2 CY2009 Revenues are expected to be at US$ 158 million to US$ 159 million and Net Income (Excluding the hedging Gain/Loss) is expected to be in the range of US$ 26.5 million to US$ 27 million This guidance is based on Constant Rupee-USD rate of Rs.50 and constant GBP–USD rate of 1.45, EURO-USD rate of 1.30. Mark to Market Forex loss during Q2 2009 is expected to be in the range of US $10 million based on current estimates. This may change depending on further currency movements during the quarter and will impact our Net Earnings accordingly.

Management Comments

Mr. Jeya Kumar, CEO, said, “The demand environment continues to be challenging in the short run, however we are investing for portfolio expansion in all areas. Long term growth prospects of the global delivery model are robust. We will see the benefits of our excellent financial health in further enhancing sustainable differentiation of our strategy.”

Speaking on the occasion, Mr. Surjeet Singh, Chief Financial Officer said, “We are putting all levers of cost optimization and reduction at work, while simultaneously investing for long term growth. Currency changes are expected to cause volatility in addition to lower overall business visibility in short run.”

Corporate Developments

• Patni has been ranked No 1 –Green Innovative Information Technology Vendor by the prestigious 2009 Black Book Top Green Outsourcing Vendors Survey.
• Patni ranked among the ‘Top 10 Best Performers in IT Services’ and IT Infrastructure Services.’ The survey conducted by Global Services, an integrated media brand, and neoIT, a leading offshore advisory and management firm, included a panel of international experts assessing companies across geographies. Patni is also featured in the prestigious list of Top 100 innovative service providers of the year, which honours global companies that demonstrate leadership, innovation and outstanding performance in information technology

• Patni became the First Indian Company to receive global certification by SAP of its application management services. This certification confirms Patni’s high level of competency in delivering application management services in support of SAP solutions. Patni entered into a partnership with SAP services to offer global experience in consulting and system integration in support of SAP solutions to the Japanese market.
• Patni opens first delivery centre in Mexico, Latin America.

[Table Omitted]

Financial Statements Analysis:

Revenues

Revenues during the quarter were in line with the guidance at US$ 156.4 million (Rs.7,954.8 million), representing a QoQ and YoY decrease of 11.4% in US dollar terms. Revenue decline at constant currency has been at 10.6% sequentially. Number of active clients was 320 at quarter end as compared to 331 in Q4 2008.

Gross Margin

Gross Margins for the quarter were at 32.9% or US$ 51.5 million (Rs.2,620.3 million) against 34.1% or US$ 60.1 million (Rs.2,921.5 million) in the previous quarter. Overall movement in Gross margins was due to price impact of (-) 1.1%. Change in margin on account of, lower volume and higher visa cost, has been mitigated by cost and operational efficiencies.