Infosys Technologies -- NASDAQ: INFY -- Announces Results for the Quar

Infosys Technologies -- NASDAQ: INFY -- Announces Results for the Quarter and Year Ended March 31, 2005; Q4 Revenue Grows by 50.2% YoY; Revenue is Expected to Cross US$ 2 Billion in Fiscal 2006

    Business Editors

    BANGALORE, India--(BUSINESS WIRE)--April 14, 2005--Infosys Technologies Limited (NASDAQ: INFY):

    Highlights

    Consolidated results for the quarter ended March 31, 2005

--	Fourth quarter revenues at $ 455 million, up 50.2% from the corresponding quarter last fiscal
--	Earnings per American Depositary Share (ADS) increased to $ 0.47 from $ 0.29(1) in the corresponding quarter last fiscal
--	Final dividend of Rs. 6.50 per ADS (equivalent to $ 0.15 per ADS at the prevailing exchange rate of Rs. 43.62 per US$). The dividends are payable on the ADSs at the prevailing exchange rate on the payment date and are subject to approval by the shareholders
--	37 new clients were added during the quarter
--	Gross addition of 2,506 employees for the quarter
--	36,750 employees as on March 31, 2005
--	$ 11 million received on sale of investment in Yantra Corporation, USA

    (1) adjusted for the two for one stock dividend distributed on July 6, 2004. Each ADS represents one equity share

    Outlook for the quarter ending June 30, 2005 and the fiscal year ending March 31, 2006

    -- Consolidated revenues expected to be between $ 459 million and
    $ 463 million for the quarter ending June 30, 2005 (growth of
    37.0% to 38.2%) and between $ 2,038 million and $ 2,070
    million for the fiscal year ending March 31, 2006; growth of
    28.0% - 30.0%

    -- Consolidated earnings per ADS(1) expected to be $ 0.44 for the
    quarter ending June 30, 2005, (growth of 41.9%) and $ 1.92 to
    $ 1.95 for the fiscal year ending March 31, 2006; growth of
    22.3% - 24.2%

    (1) adjusted for the two for one stock dividend distributed on July 6, 2004. Each ADS represents one equity share

    Infosys Technologies Limited ("Infosys" or "the company") today announced financial results for its fourth quarter ended March 31, 2005. Revenues for the quarter aggregated $ 455 million, up 50.2% from $ 303 million for the quarter ended March 31, 2004.
    Net income was $ 127 million ($ 77 million for the quarter ended March 31, 2004) and earnings per ADS was $ 0.47 ($ 0.29 for the quarter ended March 31, 2004(1)).

    (1) adjusted for the two for one stock dividend distributed on July 6, 2004. Each ADS represents one equity share

    "We are beginning to see the results of various initiatives taken over the last few years," said Nandan M. Nilekani, CEO, President and Managing Director. "Our clients increasingly see us as a strategic long-term partner who can offer a wide range of services and contribute to their business goals."
    "During the quarter, we realized the gains on our investment in Yantra Corporation, the first Infosys-incubated company," said S. Gopalakrishnan, Member of the Board and COO. "We have added a record number of employees during the year and our variable compensation plan helped align our employee costs to the growth in business."
    Infosys' Radio-Frequency Identification (RFID) solutions continued to make global corporations more competitive. A global advanced electronics and high technology company is using Infosys' expertise to comply with an RFID mandate and to build a strategy roadmap for its mobile computing product line. Infosys is developing industry-based RFID scenarios and templates for one of the world's largest software companies.
    Infosys is working with a global leader in enterprise mobility computing for product engineering and next-generation product development. A large independent distributor of office equipment and document management services is using Infosys' business intelligence solution for Sarbanes Oxley compliance.
    Infosys is helping a large US-based Cable Multi-Service Operator (MSO) upgrade its network to offer Voice-over IP (VoIP) services. Infosys is consolidating multiple billing systems for a prominent integrated telecommunications services provider in the US. Infosys enabled a global telecom service provider to set up a regional customer service center to provide data, voice, mobile and CRM services to its Asia Pacific customers.
    Infosys completed a web-based risk management program for a leading mortgage insurance services company in the US. A market leader in Western Europe sought Infosys' services to improve its operating efficiencies and reduce total cost through a strategic analysis of its IT portfolio.
    Infosys assessed and designed technology architecture for a leading diversified financial services company in the US. A leading investment bank used Infosys' expertise to implement an enterprise-wide financial messaging solution across multiple geographies. Infosys implemented a strategic reporting solution for the mortgage business of a leading European retail bank and migrated mission-critical databases for a large German independent financial advisor.
    "We have been taking steps towards transforming the way we manage our large accounts. Our focus is to bring the best that we can offer to our clients in an integrated manner while strengthening key relationships," said Basab Pradhan, Head - Worldwide Sales and Senior Vice President. "We are delighted with the progress we have made so far."
    "Our investments in growing new services have yielded returns, both in terms of revenue as well as value differentiation. Services such as Independent Validation and Infrastructure Management continue to demonstrate healthy growth while System Integration continues to deliver higher value through technology solutions," said S. D. Shibulal, Member of the Board and Head - Worldwide Customer Delivery. "Progeon continues to surge ahead, delivering both growth and enhanced client value."
    "This has been a good year. Pricing has been stable. The movement of the Rupee against the US Dollar was hedged efficiently. We spent $ 186 million on capital expenditure and added a record 10,781 seats. Our Balance Sheet continues to be liquid with over $ 688 million in cash and cash equivalents, and investments in liquid mutual fund units," said T. V. Mohandas Pai, Member of the Board and Chief Financial Officer. "We also invested back in the business to develop engines of growth."

    About the company

    Infosys is a leading global technology services firm founded in 1981. Infosys provides end-to-end business solutions that leverage technology for our clients across the entire software life cycle: consulting, design, development, re-engineering, maintenance, system integration, package evaluation and implementation. In addition, Infosys offers software products to the banking industry, as well as business process management services through its majority-owned subsidiary, Progeon. For more information, contact V. Balakrishnan at +91 (80) 2852 0440 in India or visit us on the World Wide Web at www.infosys.com.

    Safe Harbor

    Certain statements in this release concerning our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the success of its investments, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2004 and 6-K for the quarters ended June 30, 2004, September 30, 2004 and December 31, 2004 and Registration Statement on Form F-3 filed on December 20, 2004 and Amendment No. 1 to Form F-3 filed on January 18, 2005. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. The company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the company.

Infosys Technologies Limited and subsidiaries Consolidated Balance Sheets as of March 31,

($ in millions) ----------------------------------------------------------------------

2004 2005 ----------------------------------------------------- ------- -------- ASSETS Current Assets Cash and cash equivalents $445 $410 Investment in liquid mutual fund units 218 278 Trade accounts receivable, net of allowances 150 303 Deferred tax assets -- 2 Prepaid expenses and other current assets 36 35 Unbilled revenue 24 32 ------- -------- Total current assets 873 1,060 ------- --------

Property, plant and equipment, net 228 352 Goodwill 8 8 Intangible assets, net 2 -- Deferred tax assets 7 8 Other assets 14 26 ------- -------- TOTAL ASSETS $1,132 $1,454 ======= ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $1 $1 Client deposits 15 7 Other accrued liabilities 99 124 Income taxes payable 22 23 Unearned revenue 15 20 ------- -------- Total current liabilities 152 175

Non-current liabilities

Preferred stock of subsidiary 22 21

Other non-current liabilities 5 5

Stockholders' Equity Common stock, $ 0.16 par value 300,000,000 equity shares authorized, Issued and outstanding -266,564,224 and 270,570,549 equity shares as of March 31, 2004 and 2005, respectively 9 31 Additional paid-in capital 157 266 Accumulated other comprehensive income 39 33 Retained earnings 748 923 ------- -------- Total stockholders' equity 953 1,253 ------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,132 $1,454 ======= ========

Infosys Technologies Limited and subsidiaries Consolidated statements of income for the years ended March 31,

($ in millions except share and per share data) ----------------------------------------------------------------------

2003 2004 2005 ------------------------------ ------------ ------------ -------------

Revenues $754 $1,063 $1,592 Cost of revenues (including amortization of stock compensation expenses of $ 3 417 603 904 million and $ 2 million for fiscal 2003 and 2004) ------------ ------------ ------------- Gross profit 337 460 688 ------------ ------------ ------------- Operating Expenses: Selling and marketing expenses 56 77 103 General and administrative expenses 58 82 127 Amortization of stock compensation expenses 2 1 -- Amortization of intangible assets 2 7 2 ------------ ------------ ------------- Total operating expenses 118 167 232 ------------ ------------ ------------- Operating income 219 293 456 Gain on sale of long term investment -- -- 11 Other income, net 18 28 24 ------------ ------------ ------------- Income before income taxes 237 321 491 Provision for income taxes 42 51 72 ------------ ------------ ------------- Net income $195 $270 $419 ============ ============ ============= Earnings per equity share Basic $0.74 $1.03 $1.57 Diluted $0.73 $1.01 $1.52 Weighted average equity shares used in computing earnings per equity share Basic 262,284,008 262,780,308 266,901,033 Diluted 265,916,036 267,166,236 273,590,413

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CONTACT: Infosys Technologies Limited Investor Relations: Sandeep Shroff, +1-510-742-2960 (US) sandeep_shroff@infosys.com V. Balakrishnan, +91-80-2852-0440 (India) balakv@infosys.com Media Relations: Tina George, +1-416-224-7495 (Canada) tina_george@infosys.com Bani Paintal Dhawan, +91-80-2852-2408 (India) Bani_Dhawan@infosys.com

KEYWORD: NEW YORK INDIA INTERNATIONAL ASIA PACIFIC INDUSTRY KEYWORD: HARDWARE COMPUTERS/ELECTRONICS SOFTWARE NETWORKING EARNINGS SOURCE: Infosys Technologies Limited

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