Janney Montgomery Scott IT Report

Joseph D.
Foresi 617-557-2972
jforesi@jmsonline.com IT Services
May 18, 2009
Global Services Notebook-May 2009

Are We Near Stability? Some Sources Think So...
INVESTMENT CONCLUSION:
The primary question on investors' minds after viewing March quarter results is,"Are we nearing stability in the demand
environment for IT spending?" After reviewing the vendor commentary, it appears that the majority of the company
managements believe that we are getting close. The optimism is not yet being reflected in quarterly results, metrics, and
guidance, which continue to reflect a difficult demand environment. We note that stability does not imply growth, which
will take time to return. However, stability is a good thing for the group, as customers shift their focus from protecting
the balance sheet to making business decision which include cost saving initiatives. Our global services notebook takes a
look at the dominant themes that investors are focusing on in the offshore IT services space. This month we take a look at
the status of the demand environment, current political issues, and review the March quarter results focusing on pricing.
Our favorite name in the space continues to be Cognizant, which matches up well on a comparative basis across all of the
metrics that we track.
KEY POINTS:
• Commentary on the demand environment improving. The commentary surrounding the demand environment for
IT services appears to be improving. Accenture kicked off the earnings season reporting results below expectations,
but the outsourcing portion of the business held up. IBM followed by reporting strong bookings in its outsourcing
business. Among the companies in our coverage list, vendors were cautiously optimistic, with most companies
believing we are nearing a bottom particularly in the financial services vertical. We take a look at the vendor
commentary on the demand environment on p. 10.
• There are a number of political questions to be answered. The H-1B and L-1Visa Fraud & Prevention Act of
2009 expected to be proposed later this year would require employers to make a “good faith” effort to hire an
American worker first. We note the demand for H1-B's has fallen due to the economic decline. President Obama
proposed tax changes that would eliminate tax breaks for companies that outsource jobs offshore. The irony of the
legislation is that it it hurts domestic players having only a marginal affect on the Indian players. We are awaiting the
outcome of the Indian elections, which could have a positive or negative effect on the extension of the STPI tax
holiday in India. We review the political issues regarding outsourcing on pp. 10-11.
• The demand environment continued to be challenging in the March period. Revenue for the group decelerated
in the March quarter, decreasing 6% on average sequentially, due to lower volumes, pricing pressure, and a further
reduction in discretionary spending. Financial services and Telecom continue to be areas of weakness, while retail,
manufacturing, and healthcare have held up comparatively well. Margins were stable on the whole in the March
period, decreasing sequentially due in part to the large positive impact the rupee had in the prior quarter. The
majority of the vendors reported earnings upside resulting from an increase in operational efficiencies. We provide a
comprehensive review of the March quarter results on pp. 4-8.
• Metrics adjusting to the environment; pricing remains a concern. Total headcount declined 1% on average on a
sequential basis. Attrition came down 2% sequentially to 13% (TTM). A number of the vendors reported that if any
wage increases are given this year they will be lower than in the past, which should help keep margins stable. Pricing
continues to come under pressure, down about 2% to 3% in the March quarter. We currently expect price declines to
be in the 5% to 6% range for 2009, noting that these are ongoing discussions. We take a look at the pricing
environment on p. 10. We encourage investors to take a look at operating metrics in Appendix A (pp. 19-40).
Equity Research Research Analyst Certifications and Important Disclosures

are on pages 50 - 51 of this report
Industry Report
TABLE OF CONTENTS:
SECTION 1-OUTSOURCING:
Outsourcing Investment Thesis……………………………… ......................................................................................................... 3
March Quarter Review………………………………………. ...................................................................................................... 4-8
Pricing Environment………………………………………… … ..................................................................................................... 9
Demand Environment……………………………………….. ....................................................................................................... 10
Political Environment………………………………………… ................................................................................................. 10-11
Margin Levers…………………………………………………................................................................................................. 12-14
In the News………………………………………………….. .................................................................................................. 14-15
The Markets............................................................................. .................................................................................................. 15-17
Currency……………………………………………………... .................................................................................................. 17-18
SECTION 2: APPENDIX
Offshore Vendor Metrics…………………………………… .. ................................................................................................ 19-40
Outsourcing Coverage Universe…………………………….. .................................................................................................. 41-49
TABLES:
Table 1: Sequential Revenue Growth……………………………….. ............................................................................................. .5
Table 2: Annual Revenue Growth………………………………….… ............................................................................................ 5
Table 3: Sequential Headcount Growth ……………….................................................................................................................... 5
Table 4: Annual Headcount Growth ……………………............. .................................................................................................. ..6
Table 5: Sequential Attrition Rates (TTM) …………………....... ................................................................................................... 6
Table 6: Earnings per Share Results (March Quarter)………………............................................................................................... 7
Table 7: Estimates and Guidance ……………………………... ...................................................................................................... 7
Table 8: Comparative Performance of Offshore Vendors (March Quarter)……………………………… ...................................... 8
Table 9: Revenue Shift Mix……………………………………..................................................................................................... 12
Table 10: Impact of Offshore Work on Margins…………….. ....................................................................................................... 12
Table 11: Increase/Decrease of Utilization………………....... ...................................................................................................... 13
Table 12: Increase of Utilization on Margins….……………... .................................................................................................... ..13
Table 13: SG&A as a % of Revenue……….………………… ...................................................................................................... 14
Table 14: Offshore Vendor Exposure to Companies in the Headlines ............................................................................................ 15
Table 15: Clients Potentially Leaving Satyam ……………………… ........................................................................................... 16
Table 16: YTD Outsourcers Stock Performance …………….. ...................................................................................................... 16
Table 17: Short Interest Metrics…………………………….. ....................................................................................................... 17
Table 18: Impact of Rupee Fluctuation on Margins………….. ...................................................................................................... 17
Table 19: Recent Company Notes……………………………... .................................................................................................... 18
Table 20: Recent Industry Notes……………………………... ...................................................................................................... 18
FIGURES:
Figure 1: Sequential Change in Margins …………………… ......................................................................................................... 6
Figure 2: Onsite/Offshore Revenue Mix ………………………… ................................................................................................ 12
Figure 3: Offshore Utilization……………………………….. … ................................................................................................... 13
Figure 4: U.S. Dollar to Indian Rupee Graph……………….. ....................................................................................................... 17
Figure 5: U.S. Dollar to Euro Graph………………………… ....................................................................................................... 18
Figure 6: U.S. Dollar to British Pound Graph………………. … ................................................................................................... 18
Valuation Comparison
Price Market Cap --- EPS --- --- P/E --- Est. 2-Year CY 10E Target
Company Name Ticker 5/14/2009 Rating (Millions) CY 08A CY 09E CY 10E CY 08A CY 09E CY 10E EPS CAGR PEG Target 09 P/E Price
Offshore IT Services:
INFOSYS TECH ADR INFY $31.48 BUY $18,033 $2.22 $2.01 $2.07 14.2 x 15.7 x 15.2 x -3% -4.4x 15x $30
WIPRO ADR WIT $10.38 NEUTRAL $15,206 $0.53 $0.52 $0.54 19.6 x 20.0 x 19.1 x 1% 15.4x 15x $8
COGNIZANT TECH SOL CTSH $24.95 BUY $7,279 $1.44 $1.53 $1.69 17.3 x 16.3 x 14.7 x 8% 1.8x 20x $31
SYNTEL SYNT $28.19 NEUTRAL $1,170 $2.10 $2.17 $1.90 13.4 x 13.0 x 14.9 x -5% -3.1x 13x $28
PATNI CMPTR SYST ADR PTI $8.40 NEUTRAL $538 $1.49 $1.00 $1.05 5.6 x 8.4 x 8.0 x -16% -0.5x 8x $8
Offshore Peer Group Average 14.0 x 14.7 x 14.4 x -3% 1.8 x
BPO (FAO-Financial Accounting Outsourcing):

GENPACT G $9.50 NEUTRAL $2,041 $0.57 $0.60 $0.65 16.6 x 15.7 x 14.6 x 7% 2.2x 18x $11
WNS HOLDINGS ADS (a) WNS $8.22 BUY $350 $1.00 $1.22 $1.42 8.2 x 6.7 x 5.8 x 22% 0.3x 10x $12
EXLSERVICE HOLDINGS EXLS $8.87 NEUTRAL $257 $0.49 $0.30 $0.58 18.0 x 29.2 x 15.3 x 9% 1.8x 22x $10
BPO (FAO) Peer Group Average 14.3 x 17.2 x 11.9 x 12% 1.4 x
S&P 500 SPX $893 $69,896 $68.64 $58.78 $72.73 13.0 x 15.2 x 12.3 x
Offshore Peer Group Relative to S&P 500 (+Premium/-Discount) 8% -3% 17%

BPO (FAO) Relative to S&P 500 (+Premium/-Discount) 10% 13% -3%
(a) Adjusted EPS listed. GAAP EPS-CY08A: $0.27, CY09E: $0.16
Source: Company Reports, JMS Research
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SECTION 1: OUTSOURCING:
2009 Investment Thesis: The offshore IT service group has a defensive element to its business, which is over
shadowed by the challenges being faced by its customer base. The result is that the group is expected to be range
bound in the short term until the economy stabilizes or improves. We have gotten incremental data points in the
March period that leads us to believe that some offshore vendors are of the opinion that we may be nearing a
bottom, at least in some verticals. It is too early to tell if this is true. What we do know is that IT spending will be
down in 2009. The economic slowdown translates into low volumes, pricing pressure, and decreases in headcount.
Our level of conviction in the bottoming of the sector will come through the monitoring of these metrics. We had
been encouraging investors to take advantage of the market volatility in the names. Taking positions when the stocks
are at the lower end of the range at about 10x to12x forward earnings, this implies little to no growth next year, and
backing off when they reach the upper end of valuation range at around 15x forward earnings, which implies an
improvement in the economy. The market itself is attempting to decide whether or not there is stability, so it may no
longer be necessary to back off at the upper end of the valuation range. However, we do not recommend chasing the
stocks or getting involved because of fear that you might miss a move. We would hold to good old fashioned
fundamental investing. Picking a price that is a comfortable entry point. There still needs to be a catalyst in the
names to break this range, which could come in the form of economic stability, which would result in an increase in
offshoring as customers return their focus to cutting costs from protecting their balance sheets. We do not believe
that the demise of Satyam or the acquisition of captives serve as significant catalyst, but rather helps replace a
portion of the decelerating revenues. We encourage investors to look at the higher quality names in these tough
times preferably at the lower end of the range. Our favorite pick is Cognizant.
-3-
MARCH QUARTER REVIEW:
March revenue results continue to decelerate. Revenue was down sequentially, roughly in line with estimates,
continuing to decelerate due to currency, pricing deterioration, and reduced discretionary spending. The average
decline for the Tier I vendors was 3.4%, down from a 0.7% decline in the December quarter and a 6.0% increase in
the same period a year ago. Among Tier I vendors, Cognizant posted the smallest decrease at 1.0%, followed by
TCS (3.4%), Infosys (4.3%), and Wipro (4.9% for billed IT Services). (We note that Wipro’s revenue declined 7.0%
on a GAAP reported basis). Cognizant reported revenue ahead of expectations, Wipro reported in-line revenue
results, and Infosys reported top line results below expectations. Over the last five quarters, Cognizant is the fastest
growing company in the space, followed by Wipro and Infosys.
Middle market vendor’s results slow down faster than the Tier 1. The Tier II vendors (Syntel & Patni) averaged
a -9.6% sequential decrease, down from a -1.5% decrease last quarter and +3.1% growth in the same period a year
ago. Syntel missed top line expectations, down 7.9%, while Patni’s results were less impressive, although in line
with expectations, as the company reported an 11.4% sequential decline. Patni’s growth rate continues to lag behind
its competitors. Patni is considered a potential acquisition target, since the company faces growth challenges and has
a relatively attractive valuation. The group as a whole averaged a 6% sequential decrease for the March
quarter, down from a 1% decline in the previous quarter and 5% growth in the same period last year.
Financial services decelerates. Decreased revenue from financial services clients was 5% for the group, down from
a 3% decrease in the December quarter. Financial services was down for all vendors: Infosys (10%), Syntel (7%),
Patni (7%) and Wipro (5%) and Cognizant (2%). Cognizant’s management commented that it has seen some early
signs of stabilization within the banking and financial services client base. Telecom was also an area of weakness
declining 8%-15% for TCS, Infosys, Wipro and Patni as most vendors appeared to be impacted by spending
deceleration from British Telecom. (With the exception of Patni, revenue was weak from each vendor’s top client as
the group reported decreases in the 9%-12% range). Across the other verticals, retail held up well for Infosys,
Cognizant, TCS, Wipro and Syntel. Manufacturing was a bright spot for Infosys and Wipro. Wipro provided
positive commentary on retail, manufacturing and healthcare. Cognizant reported flat revenue for healthcare. TCS
noted signs of recovery for financial services, but gave a stronger outlook for retail, healthcare and energy. Industry
consultant TPI noted financial services has been slow while healthcare (payor and life sciences) is beginning to see
an upswing although it may take 6-8 months for deals to ramp.
Discretionary related services take hardest hit. The sector’s core offering application development &
maintenance was down roughly in line with overall revenue. In the case of Infosys which delineates application
development (-12%) and application maintenance (-4%), the greater decrease was in development which is
associated with some discretionary spending. Cognizant reported a -2.6% decrease for application development and
a 0.4% increase for application management. BPO was stable for Infosys, Wipro and Patni with TCS almost
doubling its revenue through the Citi BPO acquisition. Wipro gave a positive outlook on package implementation,
but the service did not perform as well for Infosys and TCS. Cost reduction services like application maintenance
and BPO are expected to increase as percentages of revenue until budgets are finalized and discretionary
spending picks up.
Europe continues to be adversely impacted by depreciation of the pound. Europe was flat to down 17% while
North America decreased 3% for the tier 1 vendors and Syntel. TCS was the only vendor to report a net increase in
clients as Infosys and Wipro saw their overall client base decline slightly. Currency adversely impacted total
revenue approximately 1% in the March quarter. The pound and euro appear to have stabilized against the dollar
thus far in the June period. Currency is not likely to continue to hamper revenue from Europe if exchange rates stay
at current levels. Tables 1 & 2 contain sequential and annual revenue growth numbers for the offshore
vendors. Table 10 on page 9 contains comments from each vendor in regards to the spending environment in
North America, particularly the financial services vertical.
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Table 1: Sequential Revenue Growth
Offshore Vendors
Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Average
CTSH 7.2% 6.6% 7.2% 2.5% -1.0% 4.5%
WIT (a) 5.4% 3.5% 4.0% -0.9% -4.9% 1.4%
INFY 5.3% 1.1% 5.3% -3.7% -4.3% 0.8%
SYNT 4.8% 5.0% 0.3% 0.9% -7.9% 0.6%
PTI 1.3% 3.5% 0.5% -3.9% -11.4% -2.0%
Average 4.8% 3.9% 3.5% -1.0% -5.9%
Based on U.S. GAAP using convenience translation.
(a) For billed (non-GAAP) revenue
Table 2: Annual Revenue Growth

Offshore Vendors
CTSH 39.7% 32.7% 31.5% 25.5% 16.0% 29.1%
WIT (a) - 37.0% 29.4% 12.4% 1.4% 20.0%
SYNT 30.6% 28.7% 18.1% 11.4% -2.1% 17.3%
INFY 32.4% 24.4% 19.0% 8.1% -1.8% 16.4%
PTI 13.1% 11.8% 8.3% 1.3% -11.4% 4.6%
Average 28.9% 26.9% 21.2% 11.7% 0.4%
Based on U.S. GAAP using convenience translation.
(a) For billed (non-GAAP) revenue
Overall slight decrease in hiring reflecting environment. Hiring came in lighter than expected and attrition rates
decreased. Headcount decreased 0.6% on average for the group in the March period, which was slower than the
revenue decrease. Average headcount slowed from 1.6% growth in the December quarter and 3.4% growth in the
same period a year ago. Cognizant led the group with 3.2% sequential headcount growth. Infosys was the other
vendor to increase headcount while Wipro (-0.5%), Patni (-2.4%) and Syntel (-4.9%) reduced headcount.
Downward trend continued for attrition. Average attrition rates decreased 2.2% in the March quarter to 12.5% on
a trailing twelve month (TTM) basis. Each vendor reported lower attrition with a biggest change from Wipro and
Patni. Wages are expected to be flat for fiscal 2010. Tables 3 & 4 contain sequential and annual headcount
growth numbers for the offshore vendors. Table 5 contains a breakdown of attrition rates.
Table 3: Sequential Total Headcount Growth

Offshore Vendors
INFY 2.9% 3.5% 6.3% 2.8% 1.7% 3.4%
CTSH 4.7% 2.2% 0.3% 3.7% 3.2% 2.8%
WIT (a) 4.8% -0.4% 1.2% -0.5% -0.5% 0.9%
SYNT 3.3% -0.4% 1.9% 0.7% -4.9% 0.1%
PTI 1.4% -0.7% -2.3% 1.3% -2.4% -0.5%
Average 3.4% 0.9% 1.5% 1.6% -0.6%
(a) IT Services headcount
-5-
Table 4: Annual Total Headcount Growth
Offshore Vendors
CTSH 33.5% 30.2% 21.7% 11.4% 9.8% 21.3%
INFY 26.2% 24.2% 24.6% 16.3% 15.0% 21.3%
SYNT 39.4% 30.4% 15.1% 5.6% -2.8% 17.5%
WIT (a) - 17.9% 10.5% 5.2% -0.2% 8.4%
PTI 15.7% 9.6% 2.9% -0.3% -4.0% 4.8%
Average 28.7% 22.5% 15.0% 7.6% 3.6%
(a) IT Services headcount.
Table 5: Trailing Twelve Month (TTM) Attrition Rates

Company Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Average
PTI 23.0% 21.2% 20.2% 18.6% 15.5% 19.7%
WIT 17.1% 16.7% 15.3% 14.6% 9.5% 14.6%
CTSH 14.7% 14.2% 14.4% 14.1% 13.1% 14.1%
SYNT 14.2% 14.4% 14.4% 14.3% 13.2% 14.1%
INFY 13.4% 13.6% 12.8% 11.8% 11.1% 12.5%
Average 16.5% 16.0% 15.4% 14.7% 12.5%
Margins come down for most of the vendors. Operating margin contracted 226 bps for Infosys due to lower
utilization, pricing and investment in the business. Wipro expanded margins 20 bps on a pro forma basis for its IT
Services business by increasing offshore and fixed price work. Cognizant’s operating margin was stable at 18.5%, a
sequential decline of -43 bps. Patni benefitted from cost control measures which helped operating margin expand
181 bps sequentially. Rupee depreciation of 2% versus the dollar during the quarter gave a little boost (+50 bps for
Infosys) to the vendors. The rupee continues to depreciate although to a lesser degree so far in the June
quarter which would provide a slight boost to margins next quarter.
Pricing (-2% to -3%) continues to deteriorate. Volume was down 6% for Wipro, 3% for TCS, 1% for Infosys and
9% for Patni while pricing decreased 2%-3% for the Tier 1 vendors (TCS, Infosys and Wipro) with Syntel reporting
a pricing decrease of 6% by our calculation and Patni reporting a 1% pricing decline. Overall, the offshore vendors
commented that the pricing environment could deteriorate an additional 0%-5%. We believe that pricing
discussions are ongoing and pressure continues. Wipro, Patni and Syntel increased operational efficiencies by
moving 1%-2% of work offshore. Utilization including trainees increased for Syntel (+5%), but decreased for Patni
(-3%) Infosys (-2%) and Wipro (-1%). Cognizant experienced no change in utilization. Figure 1 contains the
sequential change in margins for the March quarter.
Figure 1: Annual Estimates-Change in Margins*
Gross Margins Operating Margins
1250 1250
1000 1000
750 750
500 500 10.2%
Basis Points
42.0% 43.7% 46.5% 20.8% 27.1%

Basis Points
250 32.9% 181

250 29.4% 18.5%
-158 -53 -173 -115 -226 % 79 -176
0 % -43
0
-250 -250
-500 -500
INFY CTSH SYNT PTI INFY WIT CTSH SYNT PTI
-750 -750
-1000 -1000
-1250 -1250
* WIT-IT Services segment.
-6-
Earnings upside was driven by operational efficiencies. Infosys and Cognizant beat earnings estimates by a
penny and Wipro missed by a penny as the large variation from estimates was from the Tier 2 vendors. Syntel’s pro-
forma beat (+$0.08 versus consensus) resulted largely from lowered headcount and increased utilization while
Patni’s beat (+$0.05 versus consensus) was due mainly to cost control measures and reduced headcount. We believe
the vendors will continue to shift to more offshore and fixed price work in order to boost margins and reduce
pressure on the bottom line from an overall lack of revenue acceleration. Table 6 provides March quarter
results versus guidance, our estimate, and consensus. Table 8 shows the annual earnings growth for the
offshore vendors.
Table 6: EPS Results (March 2009)
INFY WIT CTSH SYNT PTI

Actual (a) $0.56 $0.12 $0.38 $0.56 $0.23
Guidance (b) $0.55 - $0.37-$0.38 - -
Our Estimate $0.54 $0.13 $0.37 $0.48 $0.13
Consensus $0.54 $0.13 $0.37 $0.48 $0.18
Upside/Downside/In-Line (c) Upside $0.02 Downside -$0.01 Upside $0.01 Upside $0.08 Upside $0.10
(a) SYNT-GAAP EPS is $0.66.

(b) Infosys guidance based on basic share count. Our estimate, consensus, and actual based on diluted.
(c) Versus our estimate.
Offshore vendors give muted guidance for the June quarter. Guidance for the June quarter was given below
expectations. Infosys guided to a 5.4% to 3.7% sequential decrease for the June quarter and provided fiscal 2010
revenue guidance of a 6.7% to 3.1% annual decrease. Wipro gave billed IT Services revenue guidance of a 3.5% to
2.0% sequential decrease. For 2009, Syntel maintained the low end of revenue guidance -6% and lowered the top
end of revenue growth guidance to 1% from 3%. Syntel also pointed to flat revenue in the June quarter. Cognizant
guided to at least 2% revenue growth in the June quarter and maintained annual guidance of at least 10% revenue
growth. Patni guided to 1.0%-1.7% sequential growth in the June quarter. (Cognizant, Syntel, and Patni and are on a
calendar year, while Infosys and Wipro use a March fiscal year end. Wipro and Patni do not provide annual
guidance.) We expect an in-line performance out of the vendors in the June period. Table 7 contains the June
quarter and annual estimates, guidance, and consensus. Table 8 has an offshore vendor’s comparative
performance table.
Table 7: Estimates and Guidance
revenue in $ millions INFY WIT CTSH SYNT PTI
June Quarter
Revenue Guidance (a) $1,060-$1,080 $1,009-$1,025 $760.0 - $158-$159
Q/Q Growth -5.4% to -3.7% -3.5% to -2.0% 1.9% - 1.0% to 1.7%
Our Revenue Estimate $1,071.7 $1,010.1 $760.0 $95.5 $157.8

Q/Q Growth -4.4% -3.4% 1.9% -1.0% 0.9%
Revenue Consensus $1,077.6 $1,286.4 $761.6 $96.8 $158.5
Earnings Guidance (b) $0.47 - $0.37 - -
Our Earnings Estimate $0.47 $0.13 $0.37 $0.50 $0.28
Earnings Consensus $0.48 $0.12 $0.37 $0.50 $0.26
Fiscal Year (c) FY2010 FY2009

Revenue Guidance (a) (c) $4,350-$4,520 - $3,100 $385-$415 -
Y/Y Growth -6.7% to -3.1% - 10% -6.2% to 1.1% -
Our Revenue Estimate $4,401.7 $4,107.3 $3,098.2 $385.6 $634.5

Y/Y Growth -5.6% -5.0% 10.0% -6.1% -11.7%
Revenue Consensus $4,419.0 $5,321.0 $3,098.0 $394.0 $631.0
Earnings Guidance (b) $1.91 to $2.00 - $1.53 $2.12-$2.42 -
Our Earnings Estimate $1.96 $0.53 $1.53 $2.17 $1.00
Earnings Consensus $1.97 $0.50 $1.54 $2.15 $0.97
(a) WIT revenue guidance and our estimate for IT Services segment. Consensus revenue projections are for total company.
WIT IT Services revenue guidance is for billed (non-GAAP) revenue.
(b) INFY earnings guidance based on basic share count. Our estimate and consensus based on diluted.
(c ) CTSH, PTI and SYNT fiscal year ends in December-Estimates are for calendar 2009.
INFY and WIT fiscal year ends in March-Estimates are for fiscal 2009.
-7-
Table 8: Offshore Vendors Comparative Performance (March 2009)
TCS INFY WIT CTSH PTI SYNT
Financials: (a)
Revenue (mn) $1,433.2 $1,121.0 $1,046.0 $745.9 $156.4 $96.4
Q/Q Growth -3.4% -4.3% -4.9% -1.0% -11.4% -7.9%
Y/Y Growth -4.9% -1.8% 1.4% 16.0% -11.4% -2.1%
Annual Revenue Guidance N/A -6.7% to -3.1% N/A 10.0% N/A -6.2% to +1.1%
Revenue Breakdown
Volume -2.7% -1.4% -6.3% 0.0% -9.0% N/A
Pricing -2% -3% -1.6% 0.0% -1.1% -6.3%
Net FX Impact (bps) +31 +50 N/A N/A N/A N/A
Onsite 48% 51% 51% 60% 55% 47%
Offshore 48% 49% 49% 40% 46% 53%
Change +4% Offshore No Change +2% Offshore No Change +1% Offshore +2% Offshore
Utilization (Incl. Trainees) 69% 65% 68% 64% 70% 76%
Change -2% -2% -1% No Change -3% 5%
Margins
Gross Margin 45.3% 42.0% N/A 43.7% 32.9% 46.5%
Q/Q (bps) 70 -158 N/A -53 -115 -173
Operating Margin 23.7% 29.4% 20.8% 18.5% 10.2% 27.1%
Q/Q (bps) -106 -226 79 -43 181 -176
Net Income (mn) $262.6 $321.0 $178.0 $113.1 $15.0 $27.3
Net Margin 18% 29% 14% 15% 10% 28%
Q/Q Growth -5% -3% 1% 1% -7% 2%
Earnings
Diluted EPS $0.27 $0.56 $0.12 $0.38 $0.23 $0.66
Q/Q Growth -5% -3% -4% 1% -7% 2%
Headcount Metrics: (b)

Total Headcount 126,150 104,850 97,810 63,700 14,540 11,760
Gross Additions 3,522 4,935 N/A N/A N/A N/A
Net Additions -463 1,772 845 2,000 -354 -603
Q/Q Growth 0% 2% 1% 3% -2% -5%
Attrition (TTM) 11.4% 11.1% 9.5% 13.1% 15.5% 13.2%
Ann. Headcount Guidance
Gross Additions N/A 18,000 N/A N/A N/A N/A
Net Additions N/A 8,000 N/A N/A N/A N/A
Headcount Est. (Incl. Attrition) N/A 8% N/A N/A N/A N/A
Campus Quarterly Hires 2,227 N/A N/A N/A N/A N/A
Campus Offers FY 2010 24,885 N/A N/A N/A N/A N/A
Sequential Growth: (c)
Services -
ADM -4% -8% -12% -1% -11% -6%
Package Implementation -9% -3% 4% N/A -9% N/A
Infrastructure Management -3% 3% 2% N/A -38% N/A
Engineering/Testing -11% 18% -15% N/A -11% N/A
BPO 85% 1% 2% N/A 0% -8%
Verticals -
Retail (d) -3% 3% -1% 0% N/A 2%
Manufacturing (e) -11% 2% 1% 0% -10% N/A
Financial Services (f) -1% -10% -5% -2% -7% -7%
Telecom -8% -15% -13% N/A -18% N/A
Healthcare 6% N/A 1% 0% N/A -6%
Geographies-
North America -4% -4% -4% -1% -11% N/A
Europe -5% -9% -7% 0% -15% N/A
Clients-
Top Account -11% -12% -9% N/A -1% -10%
Top 5 4% -5% -9% N/A -14% -12%
Top 10 -1% -6% -7% N/A -15% -8%
Client Metrics:
Active Clients 985 579 863 560 320 N/A
Gross New Clients 36 37 20 57 22 4
Net New Clients 20 -4 -19 -7 -11 N/A
Annual Revenue/Client (mn) $5.8 $7.7 $4.8 $5.3 $2.0 N/A
(a) TCS figures based on US GAAP after rupee to dollar conversion. Wipro revenue in billed (non-GAAP).
(b) Total headcount for TCS excludes subsidiaries.
(c) TCS growth rates found by converting US GAAP revenue per quarter and then multiplying by operating metrics.
(d) Retail includes Distribution vertical for TCS.
(e) Manufacturing and Healthcare combined for Wipro.
(f) Financial Services includes Insurance for all companies.
Source: JMS Research, Company Reports
-8-
PRICING ENVIRONMENT:
Pricing environment continues to be challenging. On a blended basis, pricing was down 5% sequentially on
average including currency fluctuation. By our calculations, the Tier 1 vendors (Infosys, TCS and Wipro)
experienced a 2%-3% decline in pricing while Tier 2 vendors (Syntel and Patni) saw a more significant drop at 6%
and 9% respectively. (We note that Patni reported a 1.1% decline in pricing and attributed 9% of its revenue decline
to lower volumes while Syntel reported a 4% pricing decline). Infosys provided guidance assuming no further
deterioration from the March quarter. We believe that pricing is an ongoing discussion and will continue to
deteriorate ending up down in the -5% to -7% range in 2009.
Contrary to vendor commentary, pricing concessions are not considered irrational according TPI. TPI
commented on April 21st that providers are looking at renegotiations earlier to save an RFP, but reductions are not
considered to be irrational. Concessions include 5%-10% reductions on renegotiations (consistent with past years) in
exchange for more work, while new deals are reflecting the reality of the environment. TPI also commented that
lowering pricing does not necessarily close new deals. Providers are not seeing cancellations, but are experiencing
delayed decision making. Most clients are currently looking for deals that deliver immediate impact and those that
do are closing at a faster pace. The below pricing table includes onsite and offshore pricing changes compared
to last quarter and the same period a year ago.
March Quarter Pricing Decline

Onsite Offshore Blended
q/q y/y q/q y/y q/q y/y
Infosys -2% -7% -4% -8% -3% -9%
Wipro 1% 3% 0% 3% -2% 0%
Syntel -7% -4% -5% -8% -6% -7%
Patni -8% -10% -9% -6% -9% -7%
Avg. -4% -5% -5% -5% -5% -6%
Pricing Comments (March Quarter 2009)

INFY WIT TCS
Management assumes pricing will remain at the

March quarter level for the rest of the year
Management commented that the pricing
resulting in a 6% annual decrease. The Management noted that price renegotiations
environment remains challenging and expects to
assumption is based on the notion that most continue and believes that concessions could be
experience continued pricing pressure short-
renegotiations, which began in September, have down 0%-5% for the year.
term. (Management does not provide guidance).
been completed. Management did not rule out
the possibility that further renegotiations will
occur.
SYNT PTI CTSH
Pricing was down a little in line with

Pricing is expected to continue to be a challenge Management believes it has absorbed most of the
management's expectations. The decline was
and additional deterioration as well as increased impact from pricing deterioration guiding to a
driven by currency and weakness in financial
offshore work has been included in annual 1% decline in the June quarter and 2.5%-3.0%
services. Management expects pricing to be
guidance. decline for the year.
down in the low single digits this year.
-9-
DEMAND ENVIRONMENT:
The demand environment appears to be improving with overall commentary indicating stabilization in the June
quarter and acceleration in the back half of the year. Cognizant, Wipro, Syntel, and Patni have all given commentary
that would lead investors to believe that it is possible that we are moving toward a level of stability. Infosys,
Cognizant and TCS indicated that things may be bottoming out in financial services. On a large scale, Accenture’s
and IBM’s results both implied that outsourcing remains stable.
Demand Comments (March Quarter 2009)
Infosys Wipro TCS Accenture
Management expects stabilization after the summer.
The improved outlook is based on a stronger
pipeline than this time last year and increased
activity in deal conversations compared to 3 or 4
Recovery is estimated to be about 12 to 18 months months ago. While technology and financial services Management noted that the environment remains Management noted the outsourcing segment is
away. The growth outlook for the clients Infosys are current weaknesses, management expects most challenging and uncertain as not all clients have seeing strong demand for application outsourcing as
clients look for near-term cost reductions. Demand
surveyed is down 2%. Management reported a of the impact from the economic slowdown to have closed their budgets. Management expects a lack of
is also steady in BPO, especially within finance and
strong pipeline but a longer sales cycle impacting dissipated in these areas over the next couple visibility going forward and will continue to drive accounting. This demand for outsourcing is further
closed deals in the short-term. quarters. The determining factor will be the work offshore to improve margins. supported increased outsourcing bookings.
conversion rate of pipeline deals. Management
commented it has not seen a significant lengthening
of the sales cycle which is contrary to industry
commentary.
Syntel Patni Cognizant IBM
Management views its pipeline as healthy and is
confident clients will continue to look to outsourcing
Management expects demand for cost containment Management is seeing strong demand for
(about 70% of revenue) as a means to reduce costs. Management guided to 1.0%-1.7% sequential
services (application management, BOP, IT outsourcing and transformational services
The company has 80% visibility, above the typical revenue growth believing that the worst is behind
infrastructure) to remain strong. Management also particularly with healthcare customers. Long-term
75% visibility rate at this time of year. Management them after reporting an 11.4% sequential revenue
anticipates demand for transformational services to outsourcing bookings were up 14% (up 27% in
expects flat revenue sequentially in the second decline.
continue. constant currency).
quarter followed by revenue growth in the back half
of the year driven by project ramps.
POLITICAL ENVIRONMENT:
Potential H-1B Visas Legislation:
The H1-B and L-1 Visa Fraud & Prevention Act of 2009
Senators Dick Durbin (D-Ill.) and Charles Grassley (R-Iowa) have reintroduced The H-1B and L-1Visa Fraud &
Prevention Act of 2009, aimed at changing the H-1B visa programs in the U.S. H-1B visas allow U.S. employers to
temporarily hire foreign workers in areas including engineering and math. L-1 visas are valid for a shorter period
and are available to employees of a company with offices in the U.S. and a foreign country. The Senators argue that
the program replaces U.S. workers and note the reports of fraud under the program. (e.g. In April 2009, Cognizant
agreed to pay $509,607 to 67 H-1B workers in back wages after an investigation by the U.S. Labor Dept.) The bill
contains provisions to increase oversight and discourage outsourcing of H-1B visa holders but not reduce the 65,000
H-1B visas available per year. It also requires employers to pledge they have made a “good faith” effort to hire
an American worker first and that the H-1B visa will not replace a U.S. worker. The bill includes provisions
that prohibit the discriminatory practice of “H1-B only” ads, prevents employers from hiring additional H-1B and L-
1 guest-workers if more than 50% of their employees are H1-B and L-1 visa holders, and gives the government
more authority to conduct employer investigations into H-1B and L-1 fraud.
There are a number of things to keep in mind about the proposed bill. The bill does not change the number of
H1-B visa out there (65,000). Among Indian IT companies, Infosys uses the most H-1B visas (4,000) followed by
Wipro (3,000), TCS (2,000). Cognizant was the only other company in the top ten with about 400 applications. The
vendors did not indicate seeing any impact and noted that they have submitted fewer H-1B visas applications
this year based on weakened demand. Vendors also mentioned that there is a current shift to increase offshore
work which reduced the need for onsite U.S. workers. We note that the same bill was introduced by the Senators
during the last congress but the Senators could not rally support. The Indian offshore vendors would not be the
only ones hurt by a reduction in H1-B visas. The last time the bill was introduced Bill Gates (Microsoft) spoke to
congress and argued that the protectionist policies of the U.S. have forced his company to move more work offshore.
He said for every one H1-B visa holder here in the U.S. it created employment for four additional workers (National
Foundation of American Policy). Gates also noted that one quarter of all start up US engineering and technology
- 10 -
firms from 1995 to 2005 has at least one foreign born founder. On TPI’s 1Q 09 call, TPI noted it views the new
administration in the White House as a potential negative for outsourcing, specifically from banking clients that
have accepted TARP. These companies are expected to be more sensitive than other clients due to additional
scrutiny and may look to domestic delivery options.
Types of Visas:
• H-1B-person in a specialty occupation

• H-2B-temporary or seasonal nonagricultural workers
• H-3-trainees other than medical or academic; also applies to practical training in the education of handicapped
children. More commonly used by BPO companies.
• H-4-Dependents of H visa holders
• L-1-Intracompany transferees-Last initially for 3 years and may be extended annually up to 7 years
• L-2-Dependents of L-1 visa holders
• O-1,O-2-Visas for Persons of Extraordinary Ability
• P-3-for Artist or Entertainers in a culturally Unique Program
Potential Tax Code Legislation:
In early May, President Obama proposed tax changes that would prevent companies from deferring paying
corporate tax on income earned overseas until they brought it back to the U.S. Instead, U.S. companies would
have to pay corporate taxes immediately. It may be tougher for these corporations to continue to get a credit for
whatever taxes they paid overseas. The tax changes would also deny these companies the ability to take deduction
on expenses. Obama said his budget will change the current tax code that says, “You should pay lower taxes if you
create a job in Bangalore, India, than if you create one in Buffalo, New York.” The inability to deduct these taxes is
intended to make it more expensive to operate offshore and in turn will provide incentives for U.S. companies to
create jobs domestically. A number of experts have come out against the tax saying that the real issue is the
labor arbitrage, which really drives offshore outsourcing, not the tax rate. Obama’s plan addresses U.S.
companies that operate captive subsidiary centers overseas such as IBM Global Services and Accenture. The
proposed tax plan is not expected to impact U.S. companies that hire India based IT vendors. Customers that hire
U.S. based IT services companies like IBM which then deliver services from an offshore location could be adversely
impacted. The irony in the Obama proposition is that it appears to hurt the U.S. domiciled company’s ability
to outsource and potentially the incentive to conduct international business, but does not seem to have a large
impact on the India vendors or increase U.S. job employment.
STPI Tax Holiday:
India’s five week long election for its next national government concluded on May 13th. The vote tally will be
announced on May 16th and the results will have implications for the Software Technology Parks of India (STPI) tax
holiday which ends in March 2010. The tax holiday has allowed India IT vendors to operate with a tax rate at around
the mid-teens but expiration of the tax holiday could push the tax rate to the mid twenties. The National Association
of Software and Services Companies (Nasscom) has lobbied aggressively for the STPI extension and has
commented that removal of the holiday would have little impact on large vendors (Infosys, TCS, Cognizant and
Wipro) with a greater impact on the smaller players (Syntel and Patni) as it would be more difficult for these
companies to move to smaller Special Economic Zones (SEZ) providing tax relief.
Multiple partners are required to govern India and no single party is expected to occupy a majority of the 543
member Parliament. The two largest parties are the ruling Indian National Congress and the opposition Bharatiya
Janata Party. A coalition led by the leading party could take place quickly if there is a large enough gap between the
two parties. It has been speculated that the ruling Indian National Congress would be more likely to extend
the tax holiday again.
The Bombay Stock Exchange and Indian IT vendors (Infosys, TCS and Wipro) have reacted favorably over
the course of the election period which could be considered a positive indicator for the IT vendors with
respect to the STPI situation. We note that if the tax holiday is not extended it would have a larger affect on
the smaller firms compared to the larger vendors.
- 11 -
MARGIN LEVERS:
Onsite/Offshore Revenue Mix:
The offshore vendors have the ability to offset margin pressure by moving revenue (work) from higher cost onsite
location to lower cost offshore destinations. Cognizant currently has the most leverage in its model, doing the largest
amount of onsite work, followed by HCL, Patni, TCS, Infosys, Wipro and Syntel. We note that different offerings
lend themselves better to offshoring. For example: a large amount of BPO work can be done offshore, less so for
application development & maintenance, and even less for package implementation. As a result, the type of work that
a company performs dictates its ability to move work offshore. In the March quarter, TCS, Syntel and Wipro moved
revenue offshore, while Cognizant, Patni and Infosys had no change in their revenue mix. Wipro, Infosys, Patni,
Syntel and TCS have seen an increase of 1%-6% in the amount of offshore work compared to the same period a year
ago. Figure 2 below shows the onsite/offshore revenue mix for the Indian vendors. Table 9 breaks down the
mix by quarter and compared to the same period a year ago.
Figure 2: Onsite/Offshore Revenue Mix (March 2009)
80%
Onsite
70%
60% 59%
60% 54% 52% 51% 51% 53%
Offshore 48% 49% 49% 47%
50% 46%
40% 41%
40%
30%
20%
10%
0%
I
FY
L
T
H
IT
PT
C
N
TC
TS
W
IN
H
SY
C
Table 9: Revenue Mix Shift

CTSH HCL PTI TCS INFY WIT SYNT
Q/Q 0% 12% 0% -4% 0% -2% -2%
Move To- No Change Onsite No Change Offshore No Change Offshore Offshore
Y/Y 0% 10% -1% -6% -1% -3% -3%
Move To- No Change Onsite Offshore Offshore Offshore Offshore Offshore
Table 10 details the impact on operating margins for a select group of vendors of a 1% movement in the
onsite/offshore revenue mix. A 1% movement offshore has a positive impact on margins, while a 1% movement
onsite has the opposite effect. In general, a 1% movement of work offshore has a positive +25 to +40 basis point
impact in on operating margins.
Table 10: Impact of an Increase in Offshore Work on Margins

Company Name Onsite/Offshore Mix
Infosys 1% movement in revenue offshore = 20-30 bps impact on operating margin
Wipro 1% movement in revenue offshore = 18-20 bps impact on operating margin
Syntel* 1% movement in revenue offshore = 20 bps impact on operating margin
* JMS estimate
- 12 -
Utilization:
Utilization decreases for most vendors. Utilization for Infosys, TCS, and Wipro was down in the 1%-2% range,
while Syntel increased utilization 5% due in part to decreasing headcount 5%. Patni decreased headcount 2% and
utilization 3%. Infosys provided fiscal 2010 hiring guidance of 18,000 gross (8,000 net) while TCS noted it has made
24,885 campus offers for fiscal 2010. The campus hirings will initially allow for a bench build up that can be utilized
should the demand environment improve. Cognizant, Infosys and Wipro currently run at the lowest utilization rates
and thus have the most leverage available to offset margin pressure, while Patni and HCL have the highest utilization
rates in the group. Figure 3 below shows the utilization rates for the offshore vendors. Table 11 displays
movements in utilization rates sequentially and annually.
Figure 3: Offshore Utilization*
80% 75%
72% 73%
70%
70% 67%
64%
60%
50%
40%
30%
20%
10%
0%
CTSH INFY WIT TCS PTI HCL
*Utilization includes trainees. INFY-JMS estimated Offshore Utilization.

CTSH-Offshore Utilization including trainees.Company wide utilization for TCS & PTI
Table 11: Increase/Decrease in Utilization

CTSH INFY WIT TCS PTI HCL SYNT
Q/Q 0% -2% -1% -2% -3% 0% 5%
Y/Y 11% -4% 1% -6% 0% 3% 10%
Table 12 details the impact on operating margins for a select group of vendors of a 1% movement in the utilization
rate. A 1% increase has a positive impact on margins, while a 1% decrease has the opposite affect.
Table 12: Impact of Increase in Utilization on Margins

Company Name Utilization
Infosys* 1% increase in utilization= 0.7%-1.0% increase in revenue (flows through)
Cognizant 1% increase in utilization = 40-50 bps impact on operating margin
Wipro 1% increase in utilization = 40-45 bps impact on operating margin
Patni 1% increase in utilization = 17 bps impact on operating margin
Syntel* 1% increase in utilization = 15-20 bps impact on operating margin
* JMS estimate
- 13 -
SG&A Expense:
The offshore vendors have the ability to offset margin pressure by decreasing SG&A spending. Among companies
under coverage, Cognizant spent the most on SG&A as a percentage of revenue in the March quarter and on average
over the last five quarters followed by Syntel. Cognizant has the most SG&A leverage in the group. Table 13
displays SG&A costs as a percentage of revenue.
Table 13: SG&A as % of Revenue

Company Mar-08 Jun-08 Sep-09 Dec-08 Mar-09 Average
CTSH 23.1% 24.4% 22.7% 22.5% 22.4% 23.0%
TCS 21.8% 19.8% 21.3% 19.7% 21.6% 20.8%
SYNT 20.8% 19.1% 19.1% 19.4% 19.4% 19.6%
PTI 17.6% 18.4% 18.7% 18.1% 18.6% 18.3%
HCL 16.3% 17.0% 17.0% 17.6% 15.7% 16.7%
INFY 12.9% 12.8% 13.5% 11.7% 12.6% 12.7%
WIT 13.4% 12.9% 12.5% 13.4% 12.3% 12.9%
IN THE NEWS:
Offshore IT Services
May 5th-Nasscom and Infosys do not see any immediate impact from Obama’s outsourcing tax proposal.
Obama’s has proposed to remove tax incentives for U.S. companies outsourcing jobs overseas. Under current law,
U.S. multinational firms do not pay taxes on income earned abroad until they bring the money back to the U.S.
Infosys CEO S Gopalakrishnan commented that he currently does not see any impact from the proposed legislation
but added that additional information is needed on the legislation. Nasscom believes that U.S. will be more impacted
that the Indian outsourcing industry.
May 5th-Wipro wins outsourcing deal with Unitech Wireless. Wipro will provide a range of IT services under the
nine-year outsourcing contract.
May 8th-Wipro Chairman Azim Premji takes wait and see approach to Obama’s proposed tax change.
Commenting on the economy, Premji stated there are signs of stability and a recovery is expected at the beginning
of the December 2009 quarter.
May 11th-HCL Chairman comments that Obama’s tax proposal will not impact Indian outsourcing sector.
Regarding President Obama’s proposal to cut tax benefits for companies outsourcing to overseas firms, HCL
Chairman and CEO Ajai Chowdhry stated that only U.S. companies will be affected. Chowdhry also noted that
signs of recovery are evident citing the positive performance of the Sensex and manufacturing vertical.
May 13th-Infocrossing, a Wipro company, and Sunoco announce four year $34 million contract extension.
Infocrossing will assist in managing Sunoco’s mainframe, UNIX and Windows environments as well as provide
shared infrastructure services.
May 13th-Accenture sets up separate unit to handle low priced contracts. The move is in response to newer
contracts coming in at a lower price. The Economic Times reported Accenture normally charges approximately $28
per hour but new contracts are estimated to be approximately 10% less. The report also notes that Accenture is
beginning to compete for projects at prices on par with Indian IT competitors.
May 13th-TCS wins 5 year IT contract with Volkswagen to provide onshore and offshore transformation and
IT support. TCS will consolidate and standardize Volkswagen’s IT platform in an effort to optimize costs for the
automaker. Terms of the deal were not disclosed.
- 14 -
May 14th-U.S. businesses stop cutting IT spend. The Wall Street Journal reported that interviews with more than a
dozen CIOs and corporate technology executives indicate that a range of U.S. businesses have completed tech
spending cuts. While budgets appear to be leveling off, executives do not intend to increase budgets again until their
businesses and the economy display stability for several quarters. For 2010, tech budgets are expected to be flat.
May 15th-More companies outsourcing to India. The Economic Times reported an increase in the number of
companies outsourcing tech requirements in the last few months in an effort to curb costs. Small U.S. and European
based customers which previously preferred local IT vendors are shifting to Indian vendors including Wipro,
Cognizant, Syntel and WNS as the Indian IT vendors offer a larger portfolio of services at attractive prices.
Sources for the In the News include: JMS Research, Economic Times, and Dow Jones Newswire, Inquirer.net, and
company press releases.
THE MARKETS:
U.S. Markets
Sector Implications-The fallout in the U.S. financial system has had a negative affect on the offshore group who
receives a significant portion of their revenues (40% to 60%) from this industry. A combination of this and the
global economic melt down has meant that IT budgets are expected to be down 8% to 10% and pricing is expected
to be down 3% to 5%. On the operating side, vendors are expected to increase utilization rates and move work
offshore to compensate for slow headcount growth and flat to decreasing pricing. Rupee depreciation is expected to
bring relief to margins, which have expanded and contributed to earnings upside. We track the list of company’s
making headlines and their exposure to our coverage list. We have heard commentary from Infosys, Cognizant and
TCS indicating that financial services may be reaching a bottom. A number of sources have mentioned that we they
believe we are heading toward stability. Table 14 below is our evaluation of the offshore vendors’ exposure to
the companies that made headlines last year and continue to impact results.
Table 14: Offshore Vendor Exposure to Clients in the Headlines

Infosys (INFY) Cognizant (CTSH) Wipro (WIT) Syntel (SYNT) Patni (PTI) Satyam (SAY)
Significant
Bank of America (BAC) (Top Ten Client) No Exposure No Exposure No Exposure No Exposure No Exposure
Lehman Brothers (LEH) Insignificant Insignificant Insignificant No Exposure No Exposure Insignificant
Merrill Lynch (MER) Insignificant No Exposure No Exposure No Exposure No Exposure Significant

American Int. Group (AIG) No Exposure No Exposure Insignificant Insignificant Insignificant Insignificant
Goldman Sachs (GS) Significant No Exposure Insignificant No Exposure Insignificant No Exposure
Citigroup (C) Significant Insignificant Insignificant No Exposure Insignificant Significant
Washington Mutual (WM) Insignificant 1% of Revenue Reasonable Size No Exposure No Exposure No Exposure
Morgan Stanley (MS) No Exposure Insignificant Insignificant No Exposure No Exposure No Exposure
JP Morgan (JPM) Insignificant Significant Significant Insignificant No Exposure Insignificant
Wachovia (WB) Significant 1% of Revenue N/A No Exposure No Exposure No Exposure
Nortel 0.5% of Revenue Insignificant 1.5% of Revenue No Exposure No Exposure No Exposure
Satyam Fallout-State Farm and the United Nations are the only Satyam clients to confirm they have terminated
contracts with Satyam. The Satyam board had acknowledged that two clients have provided a termination notice, but
the board did not discuss specifics. There has been speculation about several clients (Cigna, Citigroup, Merrill
Lynch, Novartis, GlaxoSmithKline and Coca-Cola) who might be leaving Satyam. We note that some of Satyam
clients have been in discussion with the company’s competitors about a transition, but a transition could take 3-6
months. We believe the velocity at which clients are leaving Satyam has slowed given Satyam’s recent sale to Tech
Mahindra. It is still uncertain what the retention rate will be with Tech Mahindra now involved. The involvement of
Tech Mahindra opens the door for offshore vendors to openly go after clients. Table 15 below provides a list of
Satyam clients that there has been speculation that they could be leaving Satyam.
- 15 -
Table 15: Clients Potentially Leaving Satyam
Clients Confirmed Defection Potential Beneficiaries Est. Contract Size

State Farm Yes Patni, TCS $50 million
United Nations Yes N/A N/A
Merrill Lynch No TCS $40 million
GlaxoSmithKline No Cognizant $35 million
Coca-Cola No HP $100 million
Citigroup No Wipro, TCS $60 million
Novartis No In house N/A
Assurant No Zensar $5 million
Visa No N/A N/A
Cigna No N/A 6-year
Nestle No N/A 3-year, $75 million
BP No N/A N/A
Tesco No Infosys, TCS Non Top Ten Client
National AUS Bank No N/A N/A
Quantas Suspended Future Work TCS N/A
GE No TCS N/A
Telstra No EDS, IBM, Infosys $100 mn ('04)
Nissan No TCS, Wipro, Cognizant $35 million
Pfizer No Cognizant N/A
SanDisk No N/A N/A
Source: Economic Times, JMS Research
Indian Market
Sector Implications-A number of the stocks that we cover are American Depository Receipts (ADRs). As a result,
the stocks are listed on their local countries exchanges and tend to trade in tandem with the local shares. Our list of
ADRs is-Infosys, Patni and Wipro.
On average, the stock price from the offshore IT vendors outperformed the market in the last month and YTD.
Vendors’ commentary pointing to near term stabilization has overshadowed in line March quarter results. Among
the BPO players, EXL is the lone company to be in the red in the past month as investors appear to take a wait to see
approach regarding the impact of announced contract wins.
Table 16: Stock and Index Performance (YTD and 1 Month Ago)
Company Ticker YTD 1 Month Ago
Infosys INFY 28.1% 9.5%
Wipro WIT 27.7% 23.0%
Cognizant CTSH 38.2% 8.0%
Syntel SYNT 21.9% 26.7%
Patni PTI 42.6% 30.2%
WNS WNS 56.6% 16.6%
Genpact G 15.6% 5.9%
ExlService EXLS 3.5% -14.9%
Average - 29.3% 13.1%
Index Ticker YTD 1 Month Ago
S&P 500 SPX -1.1% 6.1%
NASDAQ 100 NDX 12.2% 2.8%
SENSEX BSESN 26.2% 7.9%
Source: Baseline and JMS Research
- 16 -
Short Interest
Short interest has decreased for the group as short covering has helped increased stock performance. The short
interest on Syntel remains highest for the group at 9.6% of float. Short interest for Cognizant decreased 21% to 2.8%
of float. On the BPO side, short interest doubled for WNS but remains 0.0% of float. Short interest for EXL and
Genpact saw double digit decreases to 1.5% and 0.6% of float respectively.
Table 17: Short Interest Metrics

Short Interest (Shares Short)
Company Ticker 4/15/09 4/30/09 % Change % of Float Days to Cover
Infosys INFY 10,432,400 8,963,300 -14.1% N/A 2.8
Wipro WIT 6,030,300 5,827,300 -3.4% 0.4% 10.1
Cognizant CTSH 10,346,800 8,085,500 -21.9% 2.8% 1.5
Syntel SYNT 2,413,000 2,129,600 -11.7% 9.6% 8.4
Patni PTI 76,700 75,700 -1.3% 0.1% 1.1
WNS WNS 13,500 7,800 -42.2% 0.0% 0.2
Genpact G 739,700 586,800 -20.7% 0.6% 2.6
ExlService EXLS 434,600 372,300 -14.3% 1.5% 7.8
Source: shortsqueeze.com and JMS Research
CURRENCY
Currency-We consistently track the exchange rate between U.S. dollar and the Indian Rupee and Philippine Peso.
The outsourcing companies we cover take in U.S. dollars, but pay employees in local currency. As a result, a
movement in the currency can have a positive or negative affect on margins. The rupee has continued to
depreciate versus the dollar in 2009, which should help the margins of our Indian coverage list, but could
hurt other income as hedging gains decrease or turn into losses. The pound depreciated against the dollar in
the March quarter negatively impact revenue approximately 1% for the IT services group but has since
appreciated.
U.S. Dollar to Indian Rupee-The Indian rupee depreciated 0.2% on an absolute basis last week versus the dollar
closing at 50.44. The rupee has depreciated 4.1% versus the dollar on an absolute basis YTD and 0.5% in the June
quarter vs. the March quarter using averages.
Figure 4: U.S. Dollar to Indian Rupee
Monthly Depreciation (+)/Appreciation (-) on an Absolute Basis

Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 10.0%
37.0 8.0% 7.4%
6.4%
39.0 6.0%
4.2%
4.0% 3.5%
41.0
1.9% 1.8%
2.0% 1.1% 1.2%
43.0 -1.1% 0.3% -2.2% 0.7% -1.3%
0.0%
45.0 -2.0%
47.0 -4.0%
Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar Apr
49.0 -6.0%
-8.0%
51.0
-10.0%
53.0
Source: Federal Bank of New York (noon rate), JMS Research
Table 18: Impact of Rupee Fluctuation on Margins

Company Name Rupee Exposure Gross Impact from 2% Rupee Depreciation (In Mar Qtr)
Infosys 1% chg in rupee = 40 bp impact on operating margin 50 bps impact on operating margins
Wipro 1% chg in rupee = 40 bp impact on operating margin 80 bps impact on operating margins
Patni 1% chg in rupee = 30 bp impact on operating margin 60 bps impact on operating margins
Cognizant 1% chg in rupee = 25 bp impact on operating margin 50 bps impact on operating margins
Syntel 1% chg in rupee = 20-25 bps impact on operating margin 40-50 bps impact on operating margins
U.S. Dollar to Euro-The euro appreciated 1.3% last week on an absolute basis versus the dollar closing at 0.76
euros per dollar. The euro has depreciated 7.2% versus the dollar on an absolute basis YTD but has appreciated
1.1% in the June quarter vs. the March quarter using averages.
- 17 -
Figure 5: U.S. Dollar to Euro
Monthly Depreciation (+)/ Appreciation (-) on an Absolute Basis

Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09
0.5 15.0%
13.0% 10.7%
11.0% 9.5%
0.6 9.0%
7.0% 6.2%
5.0% 2.9%
0.7 3.0% 1.2% 1.3% 1.6% 1.4%
1.0% 0.5% -1.7% -10.0% -6.5% 0.4%
-1.0%
-3.0%
0.8
-5.0%
-7.0% Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar Apr
-9.0%
0.9 -11.0%
-13.0%
-15.0%
1.0
Source: JMS Research
U.S. Dollar to British Pound-The British pound depreciated 0.3% last week on an absolute basis versus the dollar
closing at 0.68 pounds per dollar. The pound has appreciated 1.0% versus the dollar on an absolute basis YTD and
2.2% in the June quarter vs. the March quarter using averages.
Figure 6: U.S. Dollar to British Pound
Monthly Depreciation (+)/Appreciation (-) on an Absolute Basis

Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09
0.4
14.0%
12.0% 10.3%
0.5
10.0% 8.8%
8.0% 7.2%
6.2%
0.6 6.0%
4.0%
2.0% 0.7% 1.2%
0.7 0.6% 0.3% -0.9% 0.2% 0.3% -2.0% -2.8%
0.0%
-2.0%
0.8 -4.0%
Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar Apr
Source: JMS Research
Table 19: Recent Company Notes

Company Ticker Date Published Title
Infosys INFY April 16th 4Q 09 Review
Wipro WIT April 23rd 4Q 09 Review
Syntel SYNT April 27th 1Q 09 Review
Patni PTI April 29th 1Q 09 Review
Genpact G May 6th 1Q 09 Review
Cognizant CTSH May 6th 1Q 09 Review
ExlService EXLS May 7th 1Q 09 Review
WNS WNS May 8th 4Q 09 Review
Table 20: Recent Industry Notes

Industry Date Published Title
IT Services April 14th March Quarter 2009 IT Services Preview
IT Services April 21st 4Q 09 Comparison of Infosys and TCS Results
IT Services April 22nd 1Q 09 TPI Index Call
Please Contact JMS for Full Report-EARNINGS MODELS AVAILABLE ON REQUEST
- 18 -
APPENDIX-OFFSHORE METRICS
- 19 -
Offshore IT Services - Financial Metrics
US GAAP
Revenue ($ in millions)
TTM Rev./
Fiscal Year Ticker Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 TTM Avg. Growth
Mar TCS (1) 1,183.9 1,278.0 1,415.5 1,503.0 1,507.7 1,525.2 1,574.2 1,483.0 1,433.2 6,015.6
q/q growth 8% 8% 11% 6% 0% 1% 3% -6% -3% -1%
y/y growth 42% 42% 45% 37% 27% 19% 11% -1% -5% 6%
Mar INFY 862.7 928.1 1,021.6 1,084.0 1,141.9 1,154.9 1,215.9 1,171.4 1,121.0 4,663.2
q/q growth 5% 8% 10% 6% 5% 1% 5% -4% -4% 0%
y/y growth 45% 41% 37% 32% 32% 24% 19% 8% -2% 12%
Mar WIT (2) 761.5 801.0 886.0 995.0 1,033.0 1,023.0 1,019.0 1,042.0 969.0 4,053.0
q/q growth 8% 5% 11% 12% 4% -1% 0% 2% -7% -2%
y/y growth 37% 41% 39% 41% 36% 28% 15% 5% -6% 10%
Dec CTSH 460.3 516.5 558.8 600.0 643.1 685.4 734.7 753.0 745.9 2,919.1
q/q growth 8% 12% 8% 7% 7% 7% 7% 2% -1% 4%
y/y growth 61% 53% 48% 41% 40% 33% 31% 26% 16% 26%
Jun HCL Tech 362.4 395.7 429.0 461.0 484.9 504.0 504.7 507.0 564.4 2,080.1
q/q growth 9% 9% 8% 7% 5% 4% 0% 0% 11% 4%
y/y growth 44% 45% 43% 39% 34% 27% 18% 10% 16% 18%
Dec PTI 156.0 163.3 169.5 174.1 176.4 182.6 183.5 176.4 156.4 698.8
q/q growth 1% 5% 4% 3% 1% 3% 1% -4% -11% -3%
y/y growth 20% 14% 12% 13% 13% 12% 8% 1% -11% 2%
Dec SYNT 75.4 80.4 87.9 94.0 98.5 103.4 103.8 104.7 96.4 408.3
q/q growth 3% 7% 9% 7% 5% 5% 0% 1% -8% 0%
y/y growth 19% 25% 27% 29% 31% 29% 18% 11% -2% 14%
Total 3,862.2 4,163.0 4,568.3 4,911.1 5,085.5 5,178.5 5,335.8 5,237.6 5,086.3 20,838.2
q/q growth 7% 8% 10% 8% 4% 2% 3% -2% -3% 0%
y/y growth 42% 41% 40% 36% 32% 24% 17% 7% 0% 12%
(1) Reported in rupees under US GAAP. Calculated by dividing revenue in rupees by the closing exchange rate at the end of the period or by rate given by company.
(2) Reported revenue for IT Services
Unless otherwise noted, all figures according to US GAAP
Sources: Company Reports
- 20 -
US GAAP
Gross Margins Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
Mar TCS (1) 42.6% 44.1% 44.8% 45.4% 44.3% 42.1% 45.7% 44.6% 45.3%
q/q bps -291 156 73 52 -102 -229 365 -109 70
y/y bps -123 99 -52 -10 179 -206 86 -76 97
Mar INFY 42.4% 38.7% 42.1% 41.9% 41.8% 39.7% 43.3% 43.6% 42.0%
q/q bps -56 -377 346 -21 -11 -213 358 34 -158
y/y bps 215 -240 -112 -108 -63 100 112 167 20
Mar WIT (2) - - - - - 34.0% 32.6% 32.8% N/A
q/q bps - - - - - - -139 24 N/A
y/y bps - - - - - - - - -
Dec CTSH 44.6% 43.4% 43.2% 43.1% 43.0% 44.4% 44.8% 44.3% 43.7%
q/q bps -58 -121 -18 -15 -3 139 32 -49 -53
y/y bps 17 -69 -157 -212 -157 103 153 118 68
Jun HCL Tech 38.2% 37.7% 37.0% 38.0% 38.6% 40.5% 39.4% 39.3% 37.1%
q/q bps 40 -51 -71 101 56 189 -111 -2 -228
y/y bps 44 111 13 18 34 275 235 132 -152
Dec PTI 35.8% 32.4% 30.9% 30.5% 28.7% 30.3% 33.5% 34.1% 32.9%
q/q bps 29 -340 -150 -42 -182 166 319 57 -115
y/y bps 32 -512 -474 -503 -714 -208 261 360 427
Dec SYNT 39.1% 38.2% 39.8% 39.4% 40.3% 41.1% 44.3% 48.3% 46.5%
q/q bps 31 -99 167 -39 85 83 317 398 -173
y/y bps 82 254 142 59 114 296 446 883 625
(1) Figures are reported in rupees under US GAAP.
Calculated by dividing revenue in rupees by the closing exchange rate at the end of the period or by rate given by company.
(2) IT Services
Sources: Company Reports, First Call, JMS Estimates
- 21 -
US GAAP
Operating Margins
Fiscal Year Ticker Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
Mar TCS (1) 25.6% 22.9% 23.6% 24.2% 22.2% 22.1% 24.2% 24.8% 23.7%
q/q bps -48 -274 70 61 -197 -13 216 53 -106
y/y bps 286 50 -174 -191 -340 -79 67 60 151
Mar INFY 27.5% 24.7% 27.5% 28.7% 28.8% 26.7% 29.5% 31.7% 29.4%
q/q bps -104 -278 283 120 4 -209 285 216 -226
y/y bps 121 -106 -75 22 129 198 200 296 66
Mar WIT (2) - - - - - 20.0% 20.2% 20.1% 20.8%
q/q bps - - - - - - 18 -16 79
y/y bps - - - - - - - - -
Dec CTSH 18.2% 17.6% 18.1% 17.7% 17.4% 17.5% 19.4% 18.9% 18.5%
q/q bps 17 -61 54 -41 -32 9 195 -47 -43
y/y bps -46 -46 -12 -30 -80 -9 132 126 115
Jun HCL Tech 19.1% 17.3% 17.3% 17.4% 18.3% 19.5% 18.6% 17.9% 16.4%
q/q bps 119 -181 1 12 90 123 -94 -72 -150
y/y bps 153 -71 -37 -48 -77 226 131 47 -192
Dec PTI 19.4% 19.8% 17.1% 15.5% 9.8% 9.2% 15.1% 8.4% 10.2%
q/q bps 175 39 -272 -155 -572 -62 587 -666 181
y/y bps 1942 1982 56 -213 -960 -1062 -203 -714 39
Dec SYNT 22.0% 18.0% 19.0% 16.6% 19.4% 22.1% 25.2% 28.9% 27.1%
q/q bps 241 -395 92 -238 287 261 313 369 -176
y/y bps 36 51 -58 -301 -255 402 623 1230 767
(1) TCS figures are reported in rupees under US GAAP.
(2) IT Services
Unless otherwise noted, all figures are calculated according to US GAAP
- 22 -
US GAAP
Earnings Per Share Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
Mar TCS (1) $0.30 $0.30 $0.30 $0.35 $0.34 $0.30 $0.29 $0.28 $0.27
y/y growth 71% 57% 37% 33% 13% 2% -3% -18% -20%
Mar INFY $0.45 $0.46 $0.48 $0.54 $0.54 $0.54 $0.56 $0.58 $0.56
y/y growth 66% 48% 37% 42% 20% 17% 16% 7% 4%
Mar WIT $0.14 $0.12 $0.14 $0.14 $0.15 $0.13 $0.12 $0.13 $0.12
y/y growth 47% 29% 33% 24% 9% 9% -13% -12% -19%
Dec CTSH $0.25 $0.27 $0.32 $0.32 $0.34 $0.35 $0.38 $0.38 $0.37
y/y growth 56% 48% 56% 39% 37% 28% 19% 18% 10%
Jun HCL Tech $0.11 $0.17 $0.11 $0.12 $0.13 $0.05 $0.11 $0.11 $0.06
y/y growth -14% 18% -30% -35% 13% -73% -2% -8% -49%
Dec PTI $0.40 $0.48 $0.39 $0.36 $0.26 $0.35 $0.63 $0.25 $0.23
y/y growth 93% - 23% -3% -35% -28% 61% -31% -10%
Dec SYNT $0.37 $0.32 $0.44 $0.39 $0.49 $0.42 $0.54 $0.64 $0.66
y/y growth 26% 20% 26% 20% 33% 31% 21% 67% 33%
(1) TCS figures are reported in rupees under US GAAP.
- 23 -
INDIAN GAAP
Revenue (Rs. in Crore)
TTM Rev./
Fiscal Year Ticker Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 TTM Avg. Growth
Mar TCS (1) 5,146.4 5,202.8 5,549.7 5,924.1 6,046.5 6,410.7 6,953.4 7,277.0 7,171.8 27,812.9
q/q growth 6% 1% 7% 7% 2% 6% 8% 5% -1% 4%
y/y growth 32% 26% 24% 22% 17% 23% 25% 23% 19% 22%
Mar INFY 3,772.0 3,773.0 4,106.0 4,271.0 4,542.0 4,854.0 5,418.0 5,786.0 5,635.0 21,693.0
q/q growth 3% 0% 9% 4% 6% 7% 12% 7% -3% 6%
y/y growth 44% 25% 19% 17% 20% 29% 32% 35% 24% 30%
Mar WIT (2) - 3,159.7 3,491.9 3,890.4 4,120.6 4,404.5 4,750.0 5,079.2 4,932.3 19,166.0
q/q growth - - 11% 11% - - 8% 7% -3% 4%
y/y growth - - - - - 39% 36% 31% 20% 31%
Jun HCL Tech (1) 1,577.1 1,612.0 1,709.2 1,816.6 1,944.8 2,168.8 2,369.3 2,469.1 2,861.5 9,868.7
q/q growth 8% 2% 6% 6% 7% 12% 9% 4% 16% 10%
y/y growth 41% 29% 24% 24% 23% 35% 39% 36% 47% 39%
Dec PTI 716.1 734.9 709.0 701.3 711.4 816.6 852.8 874.4 667.4 3,211.2
q/q growth 2% 3% -4% -1% 1% 15% 4% 3% -24% 0%
y/y growth 21% 11% -1% 0% -1% 11% 20% 25% -6% 12%
Totals - 14,482.4 15,565.8 16,603.3 17,365.3 18,654.6 20,343.5 21,485.8 21,268.0 81,751.8
q/q growth - - 7% 7% 5% 7% 9% 6% -1% 5%
y/y growth - - - - - 29% 31% 29% 22% 28%
(1) TCS and HCL Tech figures are reported in rupees under US GAAP. Calculated by dividing revenue in rupees by the closing exchange rate at the end of the period or by rate given by company.
(2) IT Services
- 24 -
INDIAN GAAP
Gross Margins Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
Mar TCS (1) 42.6% 44.1% 44.0% 45.4% 44.3% 42.1% 45.7% 44.6% 45.3%
q/q bps -291 156 -16 142 -102 -230 365 -109 70
y/y bps -123 99 -142 -10 179 -206 176 -76 97
Mar INFY 46.4% 42.5% 45.7% 45.6% 45.4% 43.3% 46.6% 46.9% 46.0%
q/q bps -56 -391 315 -10 -21 -209 338 21 -89
y/y bps 61 -223 -122 -141 -107 75 98 129 61
Jun HCL Tech (1) 38.3% 37.7% 37.0% 38.0% 38.6% 40.5% 39.4% 39.4% 37.1%
q/q bps 42 -53 -69 100 55 189 -110 -3 -228
y/y bps 43 110 15 19 33 275 235 132 -151
(1) TCS and HCL Tech figures are reported in rupees under US GAAP.
- 25 -
INDIAN GAAP
Operating Margins
Fiscal Year Ticker Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
Mar TCS (1) 25.6% 23.1% 22.6% 24.2% 22.2% 22.1% 24.2% 24.8% 23.7%
q/q bps -48 -253 -47 157 -197 -12 216 53 -106
y/y bps 286 71 -270 -191 -340 -99 164 60 151
Mar INFY 27.9% 24.9% 27.8% 29.0% 29.1% 27.0% 29.8% 31.9% 29.5%
q/q bps -95 -298 285 125 7 -210 286 203 -236
y/y bps 163 -106 -84 17 119 207 208 286 43
Mar WIT (2) - 21.0% 21.9% 21.4% 21.0% 21.0% 21.0% 20.6% 21.8%
q/q bps - - 90 -50 - - 0 -40 120
y/y bps - - - - - - -90 -80 80
Jun HCL Tech (1) 19.1% 17.3% 17.3% 17.4% 18.3% 19.5% 18.6% 17.9% 16.4%
q/q bps 122 -183 3 13 89 123 -94 -71 -150
y/y bps 154 -72 -35 -46 -78 227 131 47 -192
Dec PTI 25.6% 23.9% 17.4% 17.9% 13.1% 15.3% 20.3% 10.0% 15.7%
q/q bps 223 -178 -651 57 -482 218 499 -1025 571
y/y bps 991 536 -293 -549 -1254 -858 292 -790 263
Earnings Per Share Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
Mar TCS (1) 11.98 12.11 11.82 13.60 13.47 12.71 12.89 13.82 13.43
y/y growth 47% 37% 17% 20% 12% 5% 9% 2% 0%
Mar INFY 19.97 18.82 19.19 21.47 21.78 22.70 24.97 28.63 28.13
y/y growth 68% 33% 17% 25% 9% 21% 30% 33% 29%
Mar WIT (3) 6.00 4.98 5.65 5.86 6.03 6.21 6.70 6.89 6.93
y/y growth 39% 16% 17% 10% 1% 25% 18% 18% 15%
Jun HCL Tech (1) 4.83 7.13 4.53 4.88 4.95 2.07 5.25 5.58 3.28
y/y growth 70% 117% 22% 16% 2% -71% 16% 14% -34%
Dec PTI 11.26 10.54 7.09 7.32 5.75 8.55 13.26 4.54 7.03
y/y growth 123% -256% -17% -32% -49% -19% 87% -38% 22%
(1) TCS and HCL Tech figures are reported in rupees under US GAAP.
(2) IT Services
(3) For total company.
- 26 -
Offshore IT Services - Operating Metrics (Total Headcount)
Total Headcount
FY End Ticker Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 TTM Average
Mar TCS (1) 85,582 91,094 100,362 104,399 107,698 112,593 117,921 126,613 126,150 120,819
# change q/q 5,827 5,512 9,268 4,037 3,299 4,895 5,328 8,692 -463 4,613
% change q/q 7% 6% 10% 4% 3% 5% 5% 7% 0% 4%
Mar INFY 72,241 75,971 80,501 88,601 91,187 94,379 100,306 103,078 104,850 100,653
# change q/q 2,809 3,730 4,530 8,100 2,586 3,192 5,927 2,772 1,772 3,416
% change q/q 4% 5% 6% 10% 3% 4% 6% 3% 2% 4%
Mar WIT - 82,565 88,661 91,756 95,567 95,675 97,552 96,965 97,810 97,001
# change q/q - - 6,096 3,095 3,811 108 1,877 (587) 845 561
% change q/q - - 7% 3% 4% 0% 2% -1% 1% 1%
Dec CTSH 43,450 45,550 48,900 55,400 58,000 59,300 59,500 61,700 63,700 61,050
# change q/q 4,585 2,100 3,350 6,500 2,600 1,300 200 2,200 2,000 1,425
% change q/q 12% 5% 7% 13% 5% 2% 0% 4% 3% 2%
Jun HCL Tech 40,149 42,017 45,642 47,954 49,802 50,741 52,714 55,018 54,026 53,125
# change q/q 1,832 1,868 3,625 2,312 1,848 939 1,973 2,304 (992) 1,056
% change q/q 5% 5% 9% 5% 4% 2% 4% 4% -2% 2%
Dec PTI 13,096 13,723 14,290 14,945 15,152 15,044 14,701 14,894 14,540 14,795
# change q/q 292 627 567 655 207 -108 -343 193 -354 -153
% change q/q 2% 5% 4% 5% 1% -1% -2% 1% -2% -1%
Dec SYNT 8,673 9,238 10,670 11,709 12,093 12,045 12,277 12,363 11,760 12,111
# change q/q 309 565 1,432 1,039 384 (48) 232 86 (603) -83
% change q/q 4% 7% 16% 10% 3% 0% 2% 1% -5% -1%
Total - 360,158 389,026 414,764 429,499 439,777 454,971 470,631 472,836 459,554
# change q/q - - 28,868 25,738 14,735 10,278 15,194 15,660 2,205 10,834
% change q/q - - 8% 7% 4% 2% 3% 3% 0% 2%
- 27 -
Offshore IT Services - Operating Metrics
Billable Headcount (End of Period)
FY End Ticker Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
Mar INFY (1) 55,440 57,244 60,928 66,366 67,516 69,405 75,220 77,607 78,870
# change q/q 1,757 1,804 3,684 5,438 1,150 1,889 5,815 2,387 1,263
% change q/q 3% 3% 6% 9% 2% 3% 8% 3% 2%
Mar WIT (2) - 48,072 52,162 54,374 56,318 55,585 55,979 54,706 55,209
# change q/q - - 4,090 2,212 1,944 (733) 394 (1,273) 503
% change q/q - - 9% 4% 4% -1% 1% -2% 1%
Dec CTSH 40,800 42,700 45,800 52,100 54,400 55,500 55,500 57,600 59,500
# change q/q 4,300 1,900 3,100 6,300 2,300 1,100 - 2,100 1,900
% change q/q 12% 5% 7% 14% 4% 2% 0% 4% 3%
Jun HCL Tech (3) 21,013 23,160 25,667 26,778 26,567 26,592 27,282 29,174 28,887
# change q/q 1,009 2,147 2,507 1,111 (211) 25 690 1,892 (287)
% change q/q 5% 10% 11% 4% -1% 0% 3% 7% -1%
Dec PTI 11,823 12,353 12,868 13,498 13,636 13,548 13,190 13,331 12,990
# change q/q 270 530 515 630 138 (88) (358) 141 (341)
% change q/q 2% 4% 4% 5% 1% -1% -3% 1% -3%
Dec SYNT 8,074 8,623 10,030 10,969 11,290 11,254 11,457 11,531 10,911
# change q/q 270 549 1,407 939 321 (36) 203 74 (620)
% change q/q 3% 7% 16% 9% 3% 0% 2% 1% -5%
(1) For INFY-Estimated Billable Headcount includes Trainees and excludes Progeon.
(2) IT services results
(3) HCL Tech billable headcount for software services only
- 28 -
Onsite Billable Headcount
Mar INFY 12,162 13,056 13,517 14,286 14,528 14,897 16,002 15,494 15,321
# change q/q 486 893 461 770 242 368 1,105 (508) (173)
% change q/q 4% 7% 4% 6% 2% 3% 7% -3% -1%
Mar WIT (1) - 11,185 11,712 12,401 13,161 13,275 13,491 13,653 12,034
# change q/q - - 527 689 760 114 216 162 (1,619)
% change q/q - - 5% 6% 6% 1% 2% 1% -12%
Dec CTSH 10,200 10,675 11,450 13,025 13,600 13,875 13,875 14,400 14,875
# change q/q 1,075 475 775 1,575 575 275 - 525 475
% change q/q 12% 5% 7% 14% 4% 2% 0% 4% 3%
Dec PTI 2,777 2,741 2,817 2,784 2,786 2,902 2,889 2,816 2,697
# change q/q 147 (36) 76 (33) 2 116 (13) (73) (119)
% change q/q 6% -1% 3% -1% 0% 4% 0% -3% -4%
Dec SYNT 1,527 1,597 1,674 1,709 1,752 1,712 1,807 1,686 1,632
# change q/q (28) 70 77 35 43 (40) 95 (121) (54)
% change q/q -2% 5% 5% 2% 3% -2% 6% -7% -3%
Offshore Billable Headcount
Mar INFY 43,278 44,188 47,411 52,080 52,988 54,508 59,218 62,113 63,549
# change q/q 1,271 911 3,223 4,668 908 1,521 4,710 2,895 1,436
% change q/q 3% 2% 7% 10% 2% 3% 9% 5% 2%
Mar WIT (1) - 37,961 41,316 42,795 43,266 42,092 41,928 39,924 41,419
# change q/q - - 3,355 1,479 471 (1,174) (164) (2,004) 1,495
% change q/q - - 9% 4% 1% -3% 0% -5% 4%
Dec CTSH 30,600 32,025 34,350 39,075 40,800 41,625 41,625 43,200 44,625
# change q/q 3,225 1,425 2,325 4,725 1,725 825 - 1,575 1,425
% change q/q 12% 5% 7% 14% 4% 2% 0% 4% 3%
Dec PTI 9,046 9,612 10,051 10,714 10,850 10,646 10,301 10,515 10,293
# change q/q 526 566 439 663 136 (204) (345) 214 (222)
% change q/q 6% 6% 5% 7% 1% -2% -3% 2% -2%
Dec SYNT 6,547 7,026 8,356 9,260 9,538 9,542 9,650 9,845 9,279
# change q/q 298 479 1,330 904 278 4 108 195 (566)
% change q/q 5% 7% 19% 11% 3% 0% 1% 2% -6%
(1) WIT Total Results are only from IT Services and exclude ITES
Sources: Company Reports, JMS Estimates
- 29 -
Onsite/Offshore Headcount Split
Mar INFY
Onsite 22% 23% 22% 22% 22% 21% 21% 20% 19%
Offshore 78% 77% 78% 78% 78% 79% 79% 80% 81%
Mar WIT (1)
Onsite 23% 25% 24% 24% 24% 24% 25% 24% 23%
Offshore 77% 75% 76% 76% 76% 76% 75% 76% 77%
Dec CTSH
Onsite 25% 25% 25% 25% 25% 25% 25% 25% 25%
Offshore 75% 75% 75% 75% 75% 75% 75% 75% 75%
Dec PTI
Onsite 22% 21% 21% 20% 19% 20% 21% 20% 20%
Offshore 78% 79% 79% 80% 81% 80% 79% 80% 80%
Dec SYNT
Onsite 19% 19% 17% 16% 16% 15% 16% 15% 15%
Offshore 81% 81% 83% 84% 84% 85% 84% 85% 85%
Onsite/Offshore Revenue Mix
Mar TCS
Onsite 54% 55% 53% 54% 53% 55% 53% 51% 48%
Offshore 41% 41% 43% 41% 42% 41% 43% 44% 48%
Mar INFY
Onsite 54% 54% 53% 53% 52% 53% 52% 51% 51%
Offshore 46% 46% 47% 47% 48% 47% 48% 49% 49%
Mar WIT (1)
Onsite - 55% 54% 55% 54% 54% 54% 53% 51%
Offshore - 45% 46% 46% 46% 46% 46% 47% 49%
Dec CTSH
Onsite 60% 60% 60% 60% 60% 60% 60% 60% 60%
Offshore 40% 40% 40% 40% 40% 40% 40% 40% 40%
Dec HCL Tech
Onsite 52% 52% 51% 50% 49% 50% 48% 47% 59%
Offshore 48% 48% 49% 51% 51% 50% 52% 54% 41%
Dec SYNT
Onsite 52% 50% 49% 49% 50% 50% 51% 49% 47%
Offshore 48% 50% 51% 51% 50% 50% 49% 51% 53%
(1) WIT Total Results are only from IT Services
- 30 -
Utilization - Onsite/Offshore
Mar TCS
Utilization 75% 76% 74% 73% 76% 75% 75% 72% 69%
Mar INFY
Onsite Utilization 100% 100% 100% 100% 100% 100% 100% 100% 100%
Offshore Utilization 58% 61% 61% 60% 60% 60% 61% 59% 57%
Company Utilization (a) 68% 71% 71% 70% 70% 70% 71% 69% 67%
Mar WIT (1)
Onsite Utilization - 95% 95% 95% 95% 95% 95% 95% 95%
Offshore Utilization - 68% 68% 67% 67% 68% 71% 71% 70%
Company Utilization - 67% 67% 67% 67% 68% 70% 70% 68%
Dec CTSH
Dec HCL Tech (2)
Dec PTI
Company Utilization 73% 72% 73% 73% 70% 72% 75% 73% 70%
Dec SYNT
Attrition, Annualized
Mar TCS 11.3% 11.5% 11.5% 12.2% 12.6% 12.8% 13.2% 11.9% 11.4%
Mar INFY 13.7% 13.7% 14.2% 13.7% 13.4% 13.6% 12.8% 11.8% 11.1%
Mar WIT (1) - 19.2% 16.9% 16.4% 15.9% 15.2% 13.5% 13.9% 10.5%
Dec CTSH 15.0% 17.0% 17.0% 12.4% 12.4% 15.0% 17.6% 11.5% 8.3%
Dec SYNT 14.5% 13.9% 14.1% 14.5% 14.3% 14.5% 14.3% 14.1% 10.1%
Dec PTI 29.1% 30.1% 27.6% 25.1% 23.0% 21.2% 20.2% 18.6% 15.5%
Jun HCL Tech 17.5% 17.3% 16.5% 15.5% 15.2% 14.8% 14.2% 13.4% 13.1%
(1) WIT Total Results are only from IT Services and exclude ITES. Company utilization excludes support.
(2) HCL Tech metric for software services only
All offshore utilization figures include trainees
- 31 -
Offshore IT Services - Operating Metrics (Per Employee)
Avg Bill Rates (a)
Ticker Mix Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
INFY Onsite $69.91 $70.90 $72.99 $73.77 $73.73 $73.75 $74.22 $69.89 $68.52
Offshore $27.65 $27.94 $28.67 $29.05 $29.21 $29.19 $29.21 $27.86 $26.74
Blended $41.14 $41.57 $42.35 $42.67 $42.75 $42.83 $42.67 $40.06 $38.85
WIT (1) Onsite $66.99 $66.52 $68.03 $68.82 $67.51 $70.12 $71.42 $68.65 $69.24
Offshore $24.50 $24.48 $24.91 $24.88 $24.85 $25.59 $26.06 $25.63 $25.61
Blended $37.70 $37.60 $37.99 $38.15 $37.79 $38.91 $39.70 $38.45 $37.81
CTSH Onsite $72.52 $72.52 $72.52 $72.52 $72.52 $72.52 $72.52 $72.52 $72.52
Offshore $25.23 $25.23 $25.23 $25.23 $25.23 $25.23 $25.23 $25.23 $25.23
Blended $41.44 $41.44 $41.44 $41.44 $41.44 $41.44 $41.44 $41.44 $41.44
PTI Onsite $66.05 $68.69 $67.93 $70.62 $70.76 $70.28 $69.40 $69.23 $63.50
Offshore $21.32 $21.27 $21.37 $20.60 $20.74 $21.87 $23.01 $21.53 $19.60
Blended $31.83 $31.79 $31.56 $30.91 $30.96 $32.24 $33.17 $31.61 $28.71
SYNT Onsite $55.89 $56.79 $58.99 $61.71 $64.85 $68.05 $67.23 $67.24 $62.53
Offshore $18.03 $17.79 $17.85 $17.34 $16.70 $16.90 $16.17 $16.23 $15.37
Blended $25.56 $25.28 $24.88 $24.48 $24.20 $24.82 $24.20 $24.04 $22.52
Revenue per Employee, Annualized (a)
FY Year Ticker Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
Mar TCS $55,334 $56,119 $56,417 $57,587 $55,996 $54,185 $53,399 $46,851 $45,445
Mar INFY $47,768 $48,866 $50,762 $48,938 $50,090 $48,947 $48,488 $45,457 $42,767
Mar WIT (1) - $38,806 $39,972 $43,376 $43,237 $42,770 $41,783 $42,985 $39,628
Dec CTSH $42,372 $45,358 $45,713 $43,318 $44,352 $46,235 $49,393 $48,820 $46,836
Jun HCL Tech $36,106 $37,670 $37,597 $38,454 $38,946 $39,731 $38,297 $36,861 $41,787
Dec PTI $47,651 $47,609 $47,432 $46,602 $46,579 $48,539 $49,922 $47,377 $43,019
Dec SYNT $34,788 $34,794 $32,947 $32,112 $32,585 $34,344 $33,808 $33,885 $32,801
Operating Profit per Professional, Annualized (a)
Mar TCS $14,163 $12,824 $13,289 $13,914 $12,426 $11,956 $12,938 $11,602 $10,772
Mar INFY $13,128 $12,073 $13,977 $14,063 $14,414 $13,062 $14,320 $14,409 $12,591
Mar WIT (1) - - - - - $8,571 $8,447 $8,622 $8,261
Dec CTSH $7,696 $7,962 $8,272 $7,662 $7,703 $8,073 $9,589 $9,249 $8,674
Jun HCL Tech $6,884 $6,502 $6,494 $6,690 $7,124 $7,757 $7,118 $6,587 $6,841
Dec PTI $9,255 $9,435 $8,108 $7,242 $4,574 $4,464 $7,521 $3,981 $4,393
Dec SYNT $7,651 $6,279 $6,247 $5,323 $6,337 $7,577 $8,515 $9,784 $8,894
(a) Hourly break down per quarter by company: INFY-2000 Onsite, 2080 Offshore; WIT-2016 Onsite, 2080 Offshore;
CTSH 1980-both onsite and offshore; SYNT uses 2080 for both Onsite and Offshore
(a) Uses Total Headcount
(1) WIT Total Results are only from IT Services and exclude ITES
- 32 -
Offshore IT Services - Operating Metrics (Client Metrics)
Percentage of Revenue from Top Clients
Ticker Client Breakdown Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
TCS Top Client 6.6% 6.8% 7.0% 6.9% 6.5% 6.2% 5.9% 5.1% 4.7%
Top 5 18.5% 19.0% 19.1% 19.1% 18.9% 18.5% 17.8% 17.3% 18.6%
Top 10 28.4% 29.3% 27.6% 29.7% 29.1% 28.3% 26.9% 26.3% 26.9%
INFY Top Client 8.5% 8.6% 7.9% 9.5% 10.3% 7.9% 7.6% 6.2% 5.7%
Top 5 21.3% 21.4% 19.5% 21.6% 22.0% 19.9% 18.6% 17.3% 17.2%
Top 10 33.4% 32.3% 29.9% 32.5% 32.0% 30.1% 28.0% 27.2% 26.8%
WIT (1) Top Client - 2.9% 2.7% 2.6% 2.5% 2.7% 2.7% 2.5% 2.4%
Top 5 - 12.8% 12.8% 11.8% 11.4% 11.4% 11.5% 11.3% 10.8%
Top 10 - 22.6% 22.0% 21.3% 20.8% 20.9% 20.4% 20.2% 19.7%
CTSH Top Client - - - - - - - - -

Top 5 26.0% 26.0% 24.0% 22.5% 20.5% 20.0% 19.0% 18.7% -
Top 10 36.0% 36.0% 34.0% 33.2% 31.0% 31.0% 29.7% 29.8% -
HCL Tech Top Client - - - - - - - - -

Top 5 29.2% 28.4% 27.8% 27.2% 27.5% 26.7% 26.1% 25.3% 22.7%
Top 10 38.5% 38.2% 38.0% 37.8% 38.2% 37.3% 36.6% 35.1% 31.9%
PTI Top Client 11.1% 10.7% 12.8% 12.5% 11.1% 10.4% 10.5% 11.0% 12.3%
Top 5 35.9% 33.5% 35.6% 34.2% 32.2% 31.5% 32.9% 34.6% 33.7%
Top 10 48.8% 46.9% 48.5% 46.5% 44.8% 44.5% 45.3% 48.7% 46.9%
SYNT Top Client 19% 19% 18% 19% 20% 20% 21% 22% 21%
Top 5 53% 53% 55% 59% 56% 58% 59% 62% 59%
Top 10 71% 72% 73% 75% 73% 70% 72% 74% 74%
Number of Clients Contributing over $5 Million
Mar TCS 119 126 139 138 143 147 168 166 172
Mar INFY 107 113 122 128 141 146 151 150 151
Mar WIT (1) - 115 116 121 129 138 144 151 153
Jun HCL Tech 48 52 55 59 64 66 68 68 81
Number of Clients Contributing over $10 Million
Mar TCS 75 85 92 97 100 105 108 112 111
Mar INFY 71 75 77 81 89 91 94 102 101
Mar WIT (1) - 73 75 77 80 80 85 89 93
Jun HCL Tech 25 26 27 29 31 34 36 39 40
(1) IT Services
- 33 -
Offshore IT Services - Revenue Breakdown
By Service ($ in millions)
Ticker ADM Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
TCS % of Revenue 51% 52% 49% 48% 46% 47% 49% 49% 49%
Total Revenue $607 $658 $688 $717 $697 $715 $775 $727 $697
q/q growth 3% 8% 5% 4% -3% 3% 8% -6% -4%
y/y growth - 41% 35% 22% 15% 9% 13% 1% 0%
INFY % of Revenue 46% 46% 44% 46% 45% 43% 43% 43% 41%
Total Revenue $399 $427 $452 $502 $516 $501 $519 $498 $459
q/q growth -3% 7% 6% 11% 3% -3% 4% -4% -8%
y/y growth - 30% 25% 22% 29% 17% 15% -1% -11%
WIT (1) % of Revenue - 48% 47% 45% 45% 45% 44% 43% 40%
Total Revenue - $381 $416 $448 $462 $463 $445 $449 $389
q/q growth - - 9% 8% 3% 0% -4% 1% -13%
y/y growth - - - - - 22% 7% 0% -16%
CTSH % of Revenue 100% 100% 100% 100% 100% 100% 100% 100% 100%
Total Revenue $460 $517 $559 $600 $643 $685 $735 $753 $746
q/q growth 8% 12% 8% 7% 7% 7% 7% 2% -1%
y/y growth 61% 53% 48% 41% 40% 33% 31% 26% 16%
PTI % of Revenue 66% 64% 65% 65% 65% 62% 64% 65% 65%
Total Revenue $102 $105 $110 $113 $114 $113 $118 $114 $102
q/q growth -5% 2% 5% 2% 1% -1% 4% -3% -11%
y/y growth 10% 2% 4% 4% 11% 8% 7% 1% -11%
SYNT % of Revenue 70% 68% 66% 66% 67% 64% 67% 69% 70%
Total Revenue $53 $55 $58 $62 $66 $66 $70 $72 $68
q/q growth 2% 4% 6% 6% 7% 1% 5% 3% -6%
y/y growth 14% 18% 16% 19% 25% 22% 21% 17% 2%
Ticker Application Development Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
INFY % of Revenue 23% 22% 22% 22% 22% 21% 21% 21% 19%
Total Revenue $196 $200 $223 $233 $249 $247 $250 $244 $215
q/q growth 7% 2% 11% 5% 7% -1% 1% -3% -12%
y/y growth - 27% 27% 27% 27% 23% 12% 5% -14%
CTSH % of Revenue 47% 48% 49% 49% 48% 47% 47% 45% 45%
Total Revenue $216 $248 $274 $294 $309 $322 $345 $339 $336
q/q growth 4% 15% 10% 7% 5% 4% 7% -2% -1%
y/y growth 55% 50% 51% 41% 43% 30% 26% 15% 9%
Ticker Application Maintenance Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
INFY % of Revenue 24% 24% 22% 25% 23% 22% 22% 22% 22%
Total Revenue $204 $226 $229 $269 $267 $254 $269 $254 $243
q/q growth -2% 11% 1% 17% -1% -5% 6% -5% -4%
y/y growth - 33% 23% 29% 31% 12% 17% -5% -9%
CTSH % of Revenue 53% 52% 51% 51% 52% 53% 53% 55% 55%
Total Revenue $244 $269 $285 $306 $334 $363 $389 $414 $410
q/q growth 13% 10% 6% 7% 9% 9% 7% 6% -1%
y/y growth 68% 56% 45% 41% 37% 35% 37% 35% 23%
(1) WIT Results from Global IT Services business only (~3/4 of total sales)
- 34 -
Ticker Package Implementation Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
TCS % of Revenue 25% 22% 23% 23% 23% 22% 21% 21% 19%
Total Revenue $300 $281 $318 $343 $353 $336 $332 $307 $267
q/q growth 28% -6% 13% 8% 3% -5% -1% -8% -13%
y/y growth 46% 23% 51% 46% 18% 19% 4% -10% -24%
INFY (1) % of Revenue 23% 23% 24% 24% 24% 24% 25% 25% 25%
Total Revenue $196 $216 $241 $260 $275 $274 $308 $294 $285
q/q growth 13% 10% 11% 8% 6% -1% 12% -4% -3%
y/y growth - 67% 57% 50% 41% 27% 28% 13% 3%
WIT (2) % of Revenue - 12% 12% 12% 11% 11% 11% 12% 13%
Total Revenue - $97 $106 $116 $113 $113 $114 $122 $124
q/q growth - - 10% 9% -3% 0% 1% 7% 2%
y/y growth - - - - - 16% 7% 5% 10%
(1) INFY Results include Package Implementation and Consulting
(2) IT Services
- 35 -
Ticker Testing Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
INFY % of Revenue 7% 8% 8% 7% 7% 7% 7% 7% 6%
Total Revenue $63 $70 $80 $80 $82 $85 $85 $76 $71
q/q growth 10% 11% 14% 1% 2% 4% 0% -11% -7%
y/y growth - 70% 55% 40% 31% 23% 7% -5% -14%
WIT (2) % of Revenue - 11% 11% 10% 11% 11% 11% 12% 12%
Total Revenue - $84 $96 $103 $108 $110 $113 $120 $115
q/q growth - - 14% 8% 5% 2% 2% 6% -4%
y/y growth - - - - - 31% 18% 16% 6%
Ticker Consulting Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
TCS % of Revenue 4% 3% 3% 4% 4% 4% 3% 3% 2%
Total Revenue $41 $38 $47 $56 $54 $56 $46 $37 $24
q/q growth 11% -7% 22% 19% -2% 4% -19% -19% -34%
y/y growth - 33% 37% 49% 31% 47% -2% -33% -55%
INFY (1) % of Revenue 23% 23% 24% 24% 24% 24% 25% 25% 25%
Total Revenue $196 $216 $241 $260 $275 $274 $308 $294 $285
q/q growth 13% 10% 11% 8% 6% -1% 12% -4% -3%
y/y growth - 67% 57% 50% 41% 27% 28% 13% 3%
Ticker BPO Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
TCS % of Revenue 6% 6% 6% 7% 6% 6% 6% 6% 11%

Total Revenue $71 $75 $88 $98 $95 $93 $91 $86 $159
q/q growth 12% 6% 16% 11% -3% -2% -2% -6% 85%
y/y growth - 47% 55% 53% 34% 23% 4% -12% 67%
INFY % of Revenue 5% 5% 5% 6% 6% 6% 6% 6% 6%
Total Revenue $45 $50 $53 $64 $69 $73 $73 $67 $67
q/q growth 12% 12% 6% 20% 7% 6% 0% -8% 1%
y/y growth - 81% 58% 59% 53% 45% 37% 4% -2%
WIT (2) % of Revenue - 8% 8% 9% 9% 9% 9% 9% 9%

Total Revenue - $66 $74 $87 $89 $88 $87 $89 $88
q/q growth - - 12% 18% 3% -1% -2% 2% 0%
y/y growth - - - - - 34% 18% 2% -1%
HCL Tech % of Revenue 14% 14% 13% 12% 12% 11% 11% 12% 10%
Total Revenue $50 $54 $55 $55 $57 $57 $57 $63 $56
q/q growth 18% 9% 2% 1% 2% 0% 1% 10% -10%
y/y growth 42% 49% 44% 32% 14% 5% 4% 14% 0%
SYNT % of Revenue 12% 14% 18% 19% 20% 21% 19% 19% 19%
Total Revenue $9 $11 $16 $17 $20 $21 $20 $20 $19
q/q growth 24% 24% 41% 11% 13% 8% -7% 3% -8%
y/y growth 186% 150% 186% 139% 117% 89% 25% 16% -5%
(1) INFY results include Package Implementation and Consulting
(2) IT Services
- 36 -
By Vertical ($ in millions)
Ticker Financial Services Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
TCS % of Revenue 41% 43% 43% 44% 44% 43% 42% 42% 43%
Total Revenue $489 $551 $613 $661 $660 $648 $660 $621 $613
q/q growth 2% 13% 11% 8% 0% -2% 2% -6% -1%
y/y growth 40% 49% 47% 38% 35% 18% 8% -6% -7%
INFY % of Revenue 37% 36% 37% 37% 34% 35% 33% 35% 33%
Total Revenue $319 $335 $373 $399 $387 $398 $406 $409 $370
q/q growth 1% 5% 11% 7% -3% 3% 2% 1% -10%
y/y growth 49% 39% 34% 26% 21% 19% 9% 2% -4%
WIT (1) % of Revenue - 24% 24% 24% 25% 25% 26% 26% 26%
Total Revenue - $190 $214 $242 $257 $260 $268 $271 $252
q/q growth - - 12% 13% 6% 1% 3% 1% -7%
y/y growth - - - - - 37% 26% 12% -2%
CTSH % of Revenue 47% 47% 47% 47% 46% 46% 46% 45% 44%
Total Revenue $216 $243 $263 $282 $293 $314 $339 $339 $331
q/q growth 8% 12% 8% 7% 4% 7% 8% 0% -2%
y/y growth 58% 50% 45% 41% 35% 29% 29% 20% 13%
PTI % of Revenue 38% 38% 37% 37% 36% 36% 38% 40% 41%
Total Revenue $60 $62 $63 $65 $64 $66 $69 $71 $64
q/q growth 6% 4% 1% 4% -2% 3% 5% 2% -9%
y/y growth 16% 13% 7% 15% 6% 6% 10% 8% 1%
SYNT % of Revenue 65% 65% 69% 71% 73% 74% 75% 75% 75%
Total Revenue $49 $52 $61 $67 $72 $76 $78 $79 $72
q/q growth 3% 7% 16% 10% 8% 6% 2% 1% -8%
y/y growth 31% 35% 46% 40% 47% 46% 28% 18% 0%
Ticker Manufacturing Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
TCS % of Revenue 15% 12% 13% 13% 13% 11% 11% 11% 10%
Total Revenue $179 $158 $180 $188 $196 $163 $173 $157 $140
q/q growth 7% -11% 13% 5% 4% -17% 6% -9% -11%
y/y growth 30% 10% 20% 13% 10% 3% -4% -16% -28%
INFY % of Revenue 13% 14% 14% 15% 16% 18% 20% 20% 21%
Total Revenue $111 $126 $142 $158 $187 $213 $244 $230 $233
q/q growth 6% 13% 13% 11% 18% 13% 15% -6% 2%
y/y growth 29% 32% 36% 51% 68% 68% 72% 45% 25%
WIT (1) % of Revenue - 18% 18% 19% 20% 19% 19% 19% 21%
Total Revenue - $141 $157 $187 $202 $194 $198 $202 $201
q/q growth - - 11% 19% 8% -4% 2% 2% -1%
y/y growth - - - - - 38% 26% 8% -1%
CTSH (2) % of Revenue 15% 15% 15% 15% 15% 16% 16% 16% 17%
Total Revenue $69 $77 $84 $90 $98 $107 $115 $120 $123
q/q growth 16% 12% 8% 7% 9% 9% 8% 4% 2%
y/y growth 51% 44% 48% 51% 42% 38% 38% 34% 26%
PTI % of Revenue 22% 22% 26% 25% 28% 25% 26% 29% 29%
Total Revenue $34 $36 $44 $43 $50 $45 $47 $51 $46
q/q growth 0% 5% 22% -1% 16% -9% 3% 9% -10%
y/y growth 30% 17% 29% 27% 47% 27% 7% 17% -9%
(1) IT Services
(2) Cognizant manufacturing number includes retail and logistics
- 37 -
By Vertical ($ in millions)
Ticker Telecom Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
TCS % of Revenue 18% 17% 18% 18% 17% 16% 15% 14% 13%
Total Revenue $208 $219 $252 $263 $261 $236 $241 $205 $188
q/q growth 13% 5% 15% 4% -1% -9% 2% -15% -8%
y/y growth 74% 47% 56% 43% 25% 8% -4% -22% -28%
INFY % of Revenue 22% 22% 21% 21% 23% 20% 19% 17% 17%
Total Revenue $189 $204 $210 $229 $257 $228 $231 $196 $187
q/q growth 26% 8% 3% 9% 12% -11% 2% -15% -4%
y/y growth 95% 75% 49% 52% 36% 11% 10% -14% -27%
WIT (1) % of Revenue - 11% 11% 10% 10% 10% 10% 10% 9%
Total Revenue - $91 $94 $100 $105 $105 $97 $100 $85
q/q growth - - 4% 6% 6% 0% -8% 3% -15%
y/y growth - - - - - 16% 3% 1% -19%
PTI % of Revenue 15% 14% 12% 13% 19% 14% 13% 16% 14%
Total Revenue $23 $23 $21 $22 $34 $26 $23 $27 $23
q/q growth -23% 0% -11% 10% 50% -23% -12% 19% -18%
y/y growth -7% -20% -21% -25% 47% 13% 12% 22% -33%
Ticker Retail Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
TCS % of Revenue 8% 8% 8% 7% 8% 9% 9% 11% 12%

Total Revenue $94 $102 $108 $108 $124 $131 $142 $166 $172
q/q growth 23% 9% 5% 1% 14% 6% 8% 17% 4%
y/y growth 75% 70% 67% 43% 32% 28% 32% 53% 39%
INFY % of Revenue 11% 11% 13% 12% 12% 12% 12% 13% 14%
Total Revenue $93 $100 $128 $130 $136 $141 $147 $148 $151
q/q growth 8% 8% 27% 2% 4% 4% 4% 0% 3%
y/y growth 54% 57% 90% 51% 46% 41% 15% 13% 11%
WIT (1) % of Revenue - 16% 16% 16% 15% 16% 17% 18% 18%
Total Revenue - $127 $139 $154 $156 $161 $168 $182 $176
q/q growth - - 10% 11% 1% 3% 5% 8% -3%
y/y growth - - - - - 27% 21% 18% 13%
SYNT % of Revenue 3% 3% 2% 1% 1% 1% 1% 2% 2%
Total Revenue $2 $2 $2 $1 $1 $1 $1 $2 $2
q/q growth 10% 0% -27% -47% 5% 7% 18% 40% 2%
y/y growth 26% -6% -15% -57% -59% -56% -29% 85% 80%
Ticker Healthcare Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
TCS % of Revenue 5% 6% 6% 5% 5% 5% 5% 5% 6%
Total Revenue $56 $78 $79 $80 $77 $81 $76 $77 $82
q/q growth 13% 40% 2% 0% -3% 5% -7% 2% 6%
y/y growth 48% 111% 103% 61% 38% 4% -5% -3% 6%
WIT (1) % of Revenue - 18% 18% 19% 20% 19% 19% 19% 21%
Total Revenue - $141 $157 $187 $202 $194 $198 $202 $201
q/q growth - - 11% 19% 8% -4% 2% 2% -1%
y/y growth - - - - - 38% 26% 8% -1%
CTSH % of Revenue 24% 23% 23% 24% 25% 24% 24% 25% 25%
Total Revenue $110 $119 $129 $144 $158 $165 $175 $188 $189
q/q growth 4% 8% 8% 12% 10% 4% 6% 8% 1%
y/y growth 76% 60% 48% 36% 43% 38% 36% 31% 20%
SYNT % of Revenue 16% 16% 14% 13% 12% 12% 13% 14% 15%
Total Revenue $12 $13 $12 $12 $12 $13 $14 $15 $14
q/q growth -4% 8% -4% -1% -3% 7% 10% 8% -6%
y/y growth 10% 25% -1% -2% -1% -2% 13% 23% 19%
(1) IT Services
- 38 -
By Geography ($ in millions)
Ticker North America Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
TCS % of Revenue 55% 55% 56% 54% 55% 55% 54% 57% 57%
Total Revenue $655 $704 $798 $815 $832 $842 $856 $850 $820
q/q growth 6% 8% 13% 2% 2% 1% 2% -1% -4%
y/y growth 35% 39% 44% 31% 27% 20% 7% 4% -1%
INFY % of Revenue 63% 63% 63% 62% 61% 63% 62% 65% 65%
Total Revenue $540 $581 $640 $675 $693 $723 $748 $756 $724
q/q growth 4% 8% 10% 6% 3% 4% 3% 1% -4%
y/y growth 40% 38% 35% 30% 28% 24% 17% 12% 4%
WIT (1) % of Revenue - 60% 58% 60% 59% 60% 59% 60% 61%
Total Revenue - $484 $516 $599 $614 $612 $605 $625 $586
q/q growth - - 7% 16% 2% 0% -1% 3% -6%
y/y growth - - - - - 26% 17% 4% -4%
CTSH % of Revenue 85% 84% 82% 81% 80% 78% 78% 80% 80%
Total Revenue $391 $434 $458 $486 $514 $536 $575 $602 $597
q/q growth 7% 11% 6% 6% 6% 4% 7% 5% -1%
y/y growth 58% 48% 41% 33% 32% 24% 26% 24% 16%
PTI % of Revenue 80% 77% 78% 79% 77% 76% 77% 79% 79%
Total Revenue $124 $126 $132 $137 $135 $139 $141 $139 $124
q/q growth 4% 2% 5% 4% -1% 3% 1% -1% -11%
y/y growth 16% 9% 6% 14% 9% 10% 6% 1% -9%
Ticker Europe Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09
TCS % of Revenue 29% 29% 28% 29% 29% 30% 31% 29% 29%
Total Revenue $343 $374 $401 $439 $439 $451 $483 $433 $411
q/q growth 9% 9% 7% 10% 0% 3% 7% -10% -5%
y/y growth 69% 50% 44% 40% 28% 21% 21% -1% -6%
INFY % of Revenue 27% 27% 27% 29% 29% 27% 28% 26% 24%
Total Revenue $229 $249 $280 $310 $335 $315 $342 $299 $272
q/q growth 4% 8% 13% 11% 8% -6% 8% -13% -9%
y/y growth 52% 44% 46% 41% 46% 27% 22% -4% -19%
WIT (1) % of Revenue - 28% 29% 27% 27% 27% 27% 26% 26%
Total Revenue - $226 $257 $269 $280 $275 $274 $272 $247
q/q growth - - 14% 5% 4% -2% 0% -1% -9%
y/y growth - - - - - 22% 7% 1% -12%
CTSH % of Revenue 14% 15% 17% 18% 19% 20% 20% 18% 18%
Total Revenue $64 $77 $95 $108 $122 $139 $147 $136 $134
q/q growth 17% 20% 23% 14% 13% 14% 6% -8% -1%
y/y growth 88% 92% 94% 96% 90% 80% 55% 26% 10%
PTI % of Revenue 16% 14% 15% 17% 18% 19% 18% 16% 15%
Total Revenue $25 $23 $26 $29 $31 $34 $32 $28 $23
q/q growth 6% -6% 10% 12% 8% 10% -6% -14% -15%
y/y growth 87% 45% 83% 23% 25% 47% 25% -4% -24%
(1) IT Services
- 39 -
Time & Material vs. Fixed Price
Mar TCS
Time & Material 60% 57% 56% 55% 56% 57% 57% 55% 53%
Fixed Price 40% 43% 44% 45% 44% 43% 43% 46% 47%
Mar INFY
Time & Material 73% 71% 69% 65% 65% 65% 64% 62% 60%
Fixed Price 27% 29% 31% 35% 35% 35% 36% 38% 41%
Mar WIT (1)
Time & Material n/a n/a n/a 71% 71% 69% 68% 64% 62%
Fixed Price n/a n/a n/a 29% 29% 31% 32% 36% 38%
Dec CTSH
Time & Material 77% 76% 76% 74% 73% 74% 74% 72% 71%
Fixed Price 23% 24% 24% 26% 27% 26% 26% 28% 29%
Dec HCL Tech (2)
Time & Material 72% 70% 69% 68% 65% 65% 64% 64% 62%
Fixed Price 28% 30% 31% 32% 35% 35% 36% 36% 38%
Dec PTI
Time & Material 68% 68% 69% 66% 66% 65% 63% 62% 63%
Fixed Price 32% 32% 31% 34% 34% 35% 37% 38% 38%
Dec SYNT
Time & Material 59% 61% 63% 65% 61% 62% 62% 63% 56%
Fixed Price 41% 39% 37% 35% 39% 38% 38% 37% 44%
Recurring Revenue vs. New Business
Mar TCS
Recurring Revenue 95% 99% 98% 95% 94% 99% 98% 96% 96%
New Business 5% 1% 2% 5% 6% 1% 2% 4% 4%
Mar INFY
New Business 7% 1% 2% 4% 5% 0% 0% 3% 4%
Mar WIT (1)
Recurring Revenue - 100% 99% 98% 97% 99% 98% 97% 97%
New Business - 1% 2% 2% 3% 1% 2% 3% 3%
Dec HCL Tech (2)
New Business 8% 6% 6% 5% 6% 6% 7% 9% 10%
Dec PTI
New Business 6% 7% 8% 9% 7% 8% 6% 7% 6%
(1) IT Services
(2) HCL Tech metric for software services only.
- 40 -
OUTSOURCING COVERAGE UNIVERSE
- 41 -
Infosys Technologies Ltd. Ticker: INFY
Rating: BUY
Price Target: $30
INVESTMENT THESIS: We like Infosys because of its diversity of offerings, quality of its management team, and history of execution. The
company has a strong balance sheet from which to make acquisitions and could benefit from its client overlap with Satyam. We value
Infosys using a multiple of 15x calendar 2009 earnings giving us a price target of $30.
Current Price $31.48 Fiscal Year End March

52 Week High $50.12 Diluted Shares (mn) 570.6
52 Week Low $21.10 Market Cap (mn) $350
Dividend $0.47 Daily Trading Volume 1,877,897
Yield 1.5% Institutional Holdings 18%
Insider Holdings -
Short Interest (% of float) N/A
Semi-monthly SI change -14.1%
I NFOSYS TECH ADR ( I NFY) May 14, 2009 31. 48 Valuation Data 2009A 2010E 2011E
60 60 EPS $2.25 $1.96 $2.08
P/E 14.0 x 16.1 x 15.2 x
55 55 PEG 0.9 x 0.7 x 0.9 x
Revenue/Share $8.17 $7.71 $8.07
50 50 Price/Revenue 3.9 x 4.1 x 3.9 x
45 45
Cash (mn) $2,167
40 40 Cash/share $3.80
Long-Term Debt (mn) $55
35 35 Equity (mn) $3,784
Working Capital (mn) $2,583
30 30 Long-Term Debt/Equity 1%
ROA 31%
25 25 ROE 37%
ROIC 31%
20 20 CFO (mn) (TTM) $1,409
3, 021, 200
FCF (mn) (TTM) $1,124
15 15 DSO 57
Jul Sep Nov 08 Mar May Jul Sep Nov 09 Mar May
Rev (millions) 2009A q/q 2010E q/q 2011E q/q Gross Margins FY2009A FY2010E FY2011E
Q1 $1,155 1% $1,072 -4% $1,133 0% Q1-June 39.7% 39.0% 41.5%
Q2 $1,216 5% $1,088 2% $1,152 2% Q2-Sept 43.3% 40.0% 43.0%
Q3 $1,171 -4% $1,109 2% $1,157 0% Q3-Dec 43.6% 41.0% 42.2%
Q4 $1,121 -4% $1,133 2% $1,163 0% Q4-Mar 42.0% 41.0% 42.2%
Annual $4,663 12% $4,402 -6% $4,605 5% Year 42.1% 40.3% 42.2%
EPS 2009A y/y 2010E y/y 2011E y/y Operating Margins FY2009A FY2010E FY2011E
Q1 $0.54 17% $0.47 -12% $0.50 6% Q1-June 26.7% 26.5% 29.0%
Q2 $0.56 16% $0.47 -16% $0.53 14% Q2-Sept 29.5% 27.0% 30.5%
Q3 $0.58 7% $0.50 -13% $0.52 4% Q3-Dec 31.7% 28.7% 29.7%
Q4 $0.56 4% $0.51 -9% $0.52 2% Q4-Mar 29.4% 28.7% 29.7%
Annual $2.25 11% $1.96 -13% $2.08 6% Year 29.5% 27.7% 29.7%
RISKS: Risks to our valuation thesis include heightened geopolitical uncertainty in the Kashmir region and/or deterioration in financial
performance, which could result from pricing pressure, a sharp appreciation in the Indian rupee, greater-than-anticipated wage inflation,
and/or a slowdown in IT Services spending.
COMPANY DESCRIPTION: Infosys Technologies Limited, based in India's "Silicon City" of Bangalore, offers a wide range of IT services
including customized software development, implementation, maintenance, and re-engineering. The company utilizes offshore software
development centers based mostly in India to provide IT solutions to clients worldwide. Including its BPO business, Infosys employs over
103,000 professionals across India, Europe, and the U.S.
- 42 -
Wipro Ltd. Ticker: WIT
Rating: NEUTRAL
Price Target: $8
INVESTMENT THESIS: Wipro’s sequential organic revenue guidance in its IT services business for the March quarter was below our
expectation (-7%), implying lower than expected revenues next year. In addition to the macro headwinds, we have ancillary concerns that
the company’s consumer business could be a drag on consolidated revenues and the potential impact from the possible hedging losses on
the balance sheet. We value Wipro using a 15x forward calendar earnings multiple which produces a price target of $8 on our calendar
2009 estimates.
52 Week High $14.53 Diluted Shares (mn) 1,456.2
52 Week Low $5.04 Market Cap (mn) $15,206
Dividend $0.08 Daily Trading Volume 389,650
Insider Holdings -
Short Interest (% of float) 0.4%
WI PRO ADR ( WI T) May 14, 2009 10. 38 Valuation Data 2009A 2010E 2011E
20 20 EPS $0.46 $0.53 $0.55
P/E 22.3 x 19.5 x 19.0 x
PEG 1.5 x 0.9 x 1.2 x
Revenue/Share $2.97 $2.82 $2.92
15 15 Price/Revenue 3.5 x 3.7 x 3.6 x
Cash (mn) $1,284

Cash/share $0.88
10 10 Long-Term Debt (mn) $5
Equity (mn) $2,952
Working Capital (mn) $1,025
Long-Term Debt/Equity 0%
ROA 12%
5 5
ROE 24%
ROIC 13%
CFO (mn) (TTM) $724
562, 500
FCF (mn) (TTM) $515
0 0 DSO 64
Rev (millions) 2009A q/q 2010E q/q 2011E q/q Gross Margins FY2009A FY2010E FY2011E
Q1 $1,068 3% $1,010 -3% $1,042 1% Q1-June 30.5% 29.9% 30.0%
Q2 $1,110 4% $1,030 2% $1,065 2% Q2-Sept 29.4% 29.8% 30.0%
Q3 $1,100 -1% $1,033 0% $1,073 1% Q3-Dec 29.7% 30.3% 30.3%
Q4 $1,046 -5% $1,034 0% $1,075 0% Q4-Mar 30.3% 30.3% 30.3%
Annual $4,323 11% $4,107 -5% $4,255 4% Year 30.0% 30.1% 30.2%
EPS 2009A y/y 2010E y/y 2011E y/y Operating Margins FY2009A FY2010E FY2011E
Q1 $0.13 9% $0.13 -1% $0.13 2% Q1-June 16.3% 16.7% 16.7%
Q2 $0.12 -13% $0.13 9% $0.14 2% Q2-Sept 15.9% 16.6% 16.8%
Q3 $0.13 -12% $0.13 6% $0.14 4% Q3-Dec 16.3% 17.1% 17.1%
Q4 $0.12 -19% $0.14 10% $0.14 4% Q4-Mar 16.6% 17.1% 17.1%
Annual $0.46 -16% $0.53 14% $0.55 3% Year 16.3% 16.9% 16.9%
and/or a slowdown in IT Services spending.
COMPANY DESCRIPTION: Wipro Limited, one of India's largest companies, provides IT services and solutions through a global delivery
model. The company's largest division, IT Services (77% of sales) provides IT consulting, custom applications development, re-engineering
and maintenance, systems integration, and research & development services to multinational clients such as General Motors, Transco,
Sony, and Nortel. The company's consumer care and lighting unit accounts for most of the balance. Including its majority-owned BPO
subsidiary, Spectramind, Wipro employs approximately 97,000 professionals across India, Europe, and the United States.
- 43 -
Cognizant Technology Solutions Ticker: CTSH
Rating: BUY
Price Target: $31
INVESTMENT THESIS:We encourage investors interested in offshore IT services positioning for the long term to look at Cognizant, as
the company’s growth rates should reaccelerate quicker than its peers coming out of the downturn resulting in a premium multiple. We
expect the company to continue to outpace its competitors in 2009 as it has tapped into two areas of growth, healthcare and continental
Europe, which should help support revenues. We value the company using an 20x forward earnings multiple resulting in $31 price target
over the next twelve months.
Price Data Market Data
Current Price $24.95 Fiscal Year End December
Dividend $0.00 Daily Trading Volume 3,642,798
Insider Holdings -
Two-Week SI Change -21.9%
COGNI ZANT TECH SOL ( CTSH) May 14, 2009 24. 95 Valuation Data 2008A 2009E 2010E
45 45
EPS $1.44 $1.53 $1.69
P/E 17.3 x 16.3 x 14.7 x
40 40 PEG n/a n/a n/a
Revenue/Share $9.46 $10.41 $11.79
Price/Revenue 2.6 x 2.4 x 2.1 x
35 35
I PO: . 42 on 6/ 19/ 98
Pr i ce % change: 5888%
30 30
Cash (mn) $809
Cash/share $2.72
25 25
Equity (mn) $2,073
20 20 Working Capital (mn) $1,185
15 15 ROA 19%
ROE 22%
ROIC 19%
10 10 CFO (mn) (TTM) $430
5, 335, 200
FCF (mn) (TTM) $260
5 5 DSO 73
Rev (millions) 2008A q/q 2009E q/q 2010E q/q Gross Margins 2008A 2009E 2010E
Q1 $643 7% $746 -1% $831 3% Q1 43.0% 43.7% 43.2%
Consensus - - - - $824 2% Q2 44.4% 42.5% 42.5%
Q2 $685 7% $760 2% $870 5% Q3 44.8% 43.5% 43.2%
Consensus - - $762 2% $858 3% Q4 44.3% 43.5% 43.5%
Q3 $735 7% $785 3% $891 2% Year 44.2% 43.3% 43.1%
Consensus - - $780 2% $893 3%
Q4 $753 2% $807 3% $917 3% Operating Margins 2008A 2009E 2010E
Consensus - - $806 3% $923 4% Q1 17.4% 18.5% 17.3%
Annual $2,816 32% $3,098 10% $3,509 13% Q2 17.5% 17.2% 18.0%
Consensus - - $3,098 10% $3,514 13% Q3 19.4% 17.2% 17.7%
Guidance at least $3,100 10% Q4 18.9% 17.2% 18.0%
Year 18.3% 17.5% 17.8%
EPS 2008A y/y 2009E y/y 2010E y/y
Q1 $0.34 37% $0.38 11% $0.41 9%
Consensus - - - - $0.40 5%
Q2 $0.35 28% $0.37 8% $0.43 15%
Consensus - - $0.37 8% $0.40 7%
Q3 $0.38 19% $0.38 2% $0.43 12%
Consensus - - $0.39 3% $0.41 6%
Q4 $0.38 18% $0.39 4% $0.45 14%
Consensus - - $0.39 4% $0.43 9%
Annual $1.44 25% $1.53 6% $1.69 12%
Consensus - - $1.54 7% $1.65 7%
Guidance at least $1.53 (excludes non-operating FX )
and/or a slowdown in IT Services spending
COMPANY DESCRIPTION: Cognizant, based in Teaneck, New Jersey, provides a broad range of IT services to Global 1000
companies. The company leverages its onsite/offshore model to provide clients with faster, cheaper, and better development and
deployment of applications across multiple technology platforms and vertical areas. Cognizant employs 58,000 professionals at its
facilities in India, Europe, and the United States.
- 44 -
Syntel Inc. Ticker: SYNT
Rating: NEUTRAL
Price Target: $28
INVESTMENT THESIS: The key to Syntel’s growth continues to be the performance of its top clients (State Street & American
Express; each about 20% of revenue). The company has a joint venture with State Street and a long standing relationship with
American Express. These clients provide Syntel with a stable revenue base registering growth in the December quarter. We have and
will continue to perform channel checks in this area because of the importance. We value Syntel using a 13x forward earnings mutliple
giving us a price target of $28.
Insider Holdings -
SYNTEL ( SYNT) May 14, 2009 28. 19 Valuation Data 2008A 2009E 2010E
50 50
EPS $2.10 $2.17 $1.90
P/E 13.4 x 13.0 x 14.9 x
45 45 PEG n/a n/a n/a
Revenue/Share $9.91 $9.31 $9.94
40 40
I PO: 7. 33 on 8/ 12/ 97
35 Pr i ce % change: 284% 35
Cash (mn) $138
Cash/share $3.33
30 30
Equity (mn) $243
25 25 Working Capital (mn) $163
20 20 ROA 36.8%
ROE 44.9%
ROIC 35.4%
15 15 CFO (mn) (TTM) $105
241, 600
FCF (mn) (TTM) $74
10 10 DSO 47
Q1 $99 5% $96 -8% $99 2% Q1 40.3% 46.5% 44.3%
Q2 $103 5% $95 -1% $101 2% Q2 41.1% 45.3% 42.7%
Q3 $104 0% $97 1% $105 4% Q3 44.3% 45.3% 42.7%
Q4 $105 1% $97 0% $108 3% Q4 48.3% 45.2% 42.7%
Annual $410 22% $386 -6% $412 7% Year 43.5% 45.6% 43.1%
EPS 2008A y/y 2009E y/y 2010E y/y Operating Margins 2008A 2009E 2010E
Q1 $0.49 33% $0.66 33% $0.48 -27% Q1 19.4% 27.1% 23.8%
Q2 $0.42 31% $0.50 19% $0.46 -8% Q2 22.1% 24.8% 22.2%
Q3 $0.54 21% $0.50 -6% $0.47 -6% Q3 25.2% 24.8% 22.2%
Q4 $0.64 67% $0.50 -22% $0.49 -3% Q4 28.9% 24.7% 22.2%
Annual $2.10 38% $2.17 3% $1.90 -12% Year 24.0% 25.4% 22.6%
performance, which could result from pricing pressure, a sharp appreciation in the Indian rupee, greater-than-anticipated wage
inflation, and/or a slowdown in IT Services spending. Syntel has a significant amount of customer concentration.
COMPANY DESCRIPTION: Syntel, based in Troy, Michigan, is an information technology (IT) Services Company providing a broad
range of applications development, management, and integration services. The company employs a global delivery model to deliver
cost-effective, high-quality IT solutions to clients across multiple technologies and industries. Syntel has 12,363 employees across
India, Europe, and the U.S.
- 45 -
Patni Computer Systems Ticker: PTI
Rating: NEUTRAL
Price Target: $8
INVESTMENT THESIS: Patni is a Graham & Dodd special as the company nearly trades for cash. However, we remain Neutral on the
stock as the company's growth rate has typically trailed that of the group. March 2009 quarter revenue guidance was well below that of
Patni's peers suggesting that 2009 is going to be no different. Our valuation applies an 8x to calendar 2009 earnings giving a $8 fair
value.
Insider Holdings -
PATNI CMPTR SYST ADR( PTI ) May 14, 2009 8. 4 Valuation Data 2008A 2009E 2010E
30 30
EPS $1.49 $1.00 $1.05
P/E 5.6 x 8.4 x 8.0 x
PEG n/a n/a n/a
25 25 Revenue/Share $11.21 $9.90 $10.28
20 20
Cash (mn) $297

Cash/share $4.63
15 15
Equity (mn) $569
Working Capital (mn) $331
10 10
ROA 13.6%
ROE 17.8%
5 5 ROIC 13.6%
CFO (mn) (TTM) $142
97, 500
FCF (mn) (TTM) $113
0 0 DSO 83
Q1 $176 1% $156 -11% $161 0% Q1 28.7% 32.9% 32.0%
Q2 $183 3% $158 1% $164 2% Q2 30.3% 33.0% 32.0%
Q3 $183 1% $160 1% $165 0% Q3 33.5% 32.0% 32.0%
Q4 $176 -4% $161 1% $169 2% Q4 34.1% 32.0% 32.0%
Annual $719 8% $635 -12% $659 4% Year 31.7% 32.5% 32.0%
EPS 2008A y/y 2009E y/y 2010E y/y Operating Margins 2008A 2009E 2010E
Q1 $0.26 -35% $0.23 -10% $0.26 11% Q1 9.8% 10.2% 13.3%
Q2 $0.35 -28% $0.28 -18% $0.26 -7% Q2 9.2% 7.8% 13.3%
Q3 $0.63 61% $0.24 -62% $0.26 9% Q3 15.1% 10.1% 13.3%
Q4 $0.25 -31% $0.24 -3% $0.27 10% Q4 8.4% 10.1% 13.3%
Annual $1.49 -9% $1.00 -33% $1.05 5% Year 10.7% 9.6% 13.3%
performance, which could result from pricing pressure, a sharp appreciation in the Indian rupee, greater-than-anticipated wage
inflation, and/or a slowdown in IT Services spending.
COMPANY DESCRIPTION: Headquartered in Mumbai, India, Patni Computer Systems Ltd. is a provider of information technology (IT)
Services. The company provides application development & maintenance, package implementation, infrastructure management,
product engineering, and BPO services to the insurance, manufacturing, financial services, and telecommunications industries. Patni
utilizes a global delivery model, which has an onsite-offshore (India) component. The company has approximately 15,000 employees
worldwide with more than 70% of its staff located offshore.
- 46 -
Genpact Limited Ticker: G
Rating: NEUTRAL
Price Target: $11
INVESTMENT THESIS:High client concentration is both a positive and a negative for Genpact. In the short term, Genpact should
benefit in the present economy from its GE relationship, which provides a stable, growing revenue stream. However, we continue to be
concerned about the longer term prospects for growth given the relationship and the pressure it puts on Genpact to grow its global
client base. We would get more constructive with the name as it continues to diversify its customer base, noting that this may be a
difficult task on an organic basis in the short term given the present state of the global economy. We believe the company can trade as
high as 18x forward earnings giving us an $11 price target.
Insider Holdings -
GENPACT ( G) May 14, 2009 9. 5 Valuation Data 2008A 2009E 2010E

20 20
EPS $0.57 $0.60 $0.65
P/E 16.6 x 15.7 x 14.6 x
PEG n/a n/a n/a
I PO: 14 on 8/ 02/ 07 Revenue/Share $4.79 $5.30 $5.93
Pr i ce % change: - 32% Price/Revenue 2.0 x 1.8 x 1.6 x
15 15
EBITDA $188.4 n/a n/a
EV/EBITDA 9.5 n/a n/a
Cash (mn) $329

Cash/share $1.51
10 10
Equity (mn) $776
5 5 ROA 2%
ROE 5%
ROIC 2%
CFO (mn) (TTM) $209
343, 800
FCF (mn) (TTM) $144
0 0 DSO 49
Sep Nov 08 Mar May Jul Sep Nov 09 Mar May
Q1 $235 1% $266 -6% $301 -2% Q1 37.7% 38.4% 39.2%
Consensus - - - - $301 -2% Q2 42.0% 39.4% 40.2%
Q2 $254 8% $284 7% $313 4% Q3 42.5% 40.6% 41.9%
Consensus - - $282 6% $318 5% Q4 39.6% 41.7% 42.3%
Q3 $271 7% $296 4% $332 6% Year 40.5% 40.1% 41.0%
Consensus - - $294 5% $332 4%
Q4 $282 4% $306 3% $343 3% Operating Margins 2008A 2009E 2010E
Consensus - - $308 4% $344 4% Q1 7.4% 12.5% 12.3%
Annual $1,041 26% $1,151 11% $1,288 12% Q2 11.5% 13.3% 13.3%
Consensus - - $1,155 11% $1,307 13% Q3 13.4% 14.2% 15.2%
Guidance - - $1,144.9 to $1,197.0 10%-15% Q4 18.1% 15.3% 15.6%
Year 12.8% 13.9% 14.2%
EPS 2008A y/y 2009E y/y 2010E y/y
Q1 $0.09 - $0.14 53% $0.13 -4%
Consensus - - - - $0.14 -1%
Q2 $0.11 - $0.14 24% $0.15 7%
Consensus - - $0.14 20% $0.16 16%
Q3 $0.15 - $0.15 1% $0.18 16%
Consensus - - $0.15 -2% $0.18 19%
Q4 $0.22 - $0.17 -20% $0.19 10%
Consensus - - $0.17 -20% $0.20 17%
Annual $0.57 - $0.60 5% $0.65 8%
Consensus - - $0.60 5% $0.67 12%
Guidance - - N/A N/A - -
RISKS: Genpact faces risks similar to the other offshore BPO players. The company has a high amount of client concentration. On the
labor supply front, Indian vendors are finding it difficult to find qualified employees and attrition continues to be a concern, although less
so in today's economy. Governmental policies could have an adverse effect on the industry. There can be political repercussion to the
outsourcing industry.
COMPANY DESCRIPTION: Headquartered in Gurgaon, India, Genpact (IPO-8/1/2007) is an offshore outsourcing solutions provider
that offers business process outsourcing (BPO) and IT services to companies primarily in the banking, financial services, and
insurance (BFSI) and manufacturing industries. The company utilizes the comparatively lower cost labor supply located in offshore
locations (India) to serve the needs of its U.S., European, Indian, Chinese and Japanese clients. Genpact has approximately 36,200
employees located in over 30 delivery centers in nine countries.
- 47 -
WNS Holdings Ltd. Ticker: WNS
Rating: BUY
Price Target: $12
INVESTMENT THESIS: We like WNS, believing the Aviva acquisition provides it with a steady revenue stream. We believe BPO service
offering, although not counter-cyclical, play well in this economy, helping customers cut costs. It appears that things are on track at WNS.
December quarter results were encouraging, excluding the impact of currency. Management reiterated its annual guidance, which appears
attainable barring further currency impact. We value the company using a 10x 2009 earnings multiple, in line with the group, resulting in an
price target of $12.
Insider Holdings -
WNS HOLDI NGS ADS ( WNS) May 14, 2009 8. 22 Valuation Data 2009A 2010E 2011E
30 30 EPS $1.08 $1.17 $1.51
P/E 7.6 x 7.0 x 5.4 x
PEG 0.5 x 0.3 x 0.3 x
25 25 Revenue/Share $9.09 $9.11 $10.42
EV/EBITDA - - -
20 20
Cash (mn) $39
Cash/share $0.92
Equity (mn) $188
Working Capital (mn) -$4
ROA 2%
ROE 5%
5 5 ROIC 1%
CFO (mn) (TTM) $63
81, 900
FCF (mn) (TTM) $40
0 0 DSO 58
Rev (millions)* 2009A q/q 2010E q/q 2011E q/q Gross Margins 2009A 2010E 2011E
Q1 $82 9% $95 0% $108 9% Q1 29.7% 32.0% 32.8%
Q2 $109 33% $96 1% $110 2% Q2 32.0% 31.9% 33.0%
Q3 $100 -9% $97 1% $112 2% Q3 37.1% 31.8% 33.1%
Q4 $96 -4% $99 2% $114 2% Q4 34.1% 31.7% 33.3%
Annual $386 33% $387 0% $443 14% Year 33.4% 31.9% 33.1%
Annual Consensus - - $395 2% $441 12%
2009 Guidance $385-$390 -0.4% to +0.9% Operating Margins 2009A 2010E 2011E
*-Revenue less repair Q1 5.8% 5.3% 7.4%
EPS** 2009A y/y 2010E y/y 2011E y/y Q2 5.1% 5.1% 7.5%
Q1 $0.19 -24% $0.30 58% $0.36 21% Q3 10.7% 4.6% 7.3%
Q2 $0.27 56% $0.30 9% $0.37 24% Q4 7.8% 4.3% 7.4%
Q3 $0.30 60% $0.30 1% $0.38 26% Year 7.4% 4.8% 7.4%
Q4 $0.32 35% $0.31 -3% $0.40 29%
Annual $1.08 28% $1.17 9% $1.51 29%
Consensus - - $1.16 7% $1.32 14%
Guidance - - $1.14-$1.18 - -
**EPS is adjusted
RISKS: WNS’ has three major areas where it is exposed to risk. The company has a high level of client concentration, with 49% of revenue
less repair payments received from its top 5 clients, and contracts are easily terminated. On the labor side, WNS has a high trailing twelve
month (TTM) attrition rate (35) although it has been coming down. The company operates on a global platform, exposing it to currency risk
and changes in the domestic and international business climates. WNS performs work in the financial services industry, a portion of which
is related to the mortgage industry, which exposes it to risk given recent sub-prime mortgage turmoil.
COMPANY DESCRIPTION: WNS (Holdings) Limited is a provider of offshore business process outsourcing (BPO) services. The company
provides data, voice, and analytic services to the travel and banking, financial service, and insurance (BFSI) industries. WNS' clients are
primarily located in Europe and North America. The company began operations in 1996 as an in-house unit of British Airways and started
servicing third parties in fiscal 2003. WNS has approximately 21,000 employees with almost its entire workforce located in India.
- 48 -
ExlService Holdings Inc. Ticker: EXLS
Rating: NEUTRAL
Price Target: $10
INVESTMENT THESIS: We are encouraged about the future for EXL, the company recently signed three new clients and reported a healthy
pipeline. However, we remain on the sidelines in the short term as the headwinds coming from business that is going away and the negative
impact on earnings from currency exchange make their way through the numbers. Our $10 fair value is based on a multiple of 22x our 2009
earnings estimate excluding interest ($0.27) and adding back cash ($3.67).
Insider Holdings -
EXLSERVI CE HOLDI NGS ( EXLS) May 14, 2009 8. 87 Valuation Data 2008A 2009E 2010E
30 30 EPS $0.49 $0.30 $0.58
P/E 18.0 x 29.2 x 15.3 x
PEG n/a 0.6 x n/a
25 25 Revenue/Share $6.25 $5.91 $6.71
EV/EBITDA n/a n/a n/a
20 20
Cash (mn) $107
Cash/share $3.67
Equity (mn) $171
ROA 1%
ROE 2%
5 5 ROIC 2%
CFO (mn) (TTM) $37
134, 500
FCF (mn) (TTM) $24
0 0 DSO 70
Revenue (millions) 2008A q/q 2009E q/q 2010E q/q Gross Margins 2008A 2009E 2010E
Q1 $51 1% $41 -6% $47 0% Q1 36.5% 40.6% 39.5%
Consensus - - - - $46 1% Q2 37.0% 38.0% 39.0%
Q2 $54 6% $41 0% $48 3% Q3 39.8% 39.0% 40.0%
Consensus - - $42 1% $48 3% Q4 41.6% 39.0% 40.0%
Q3 $47 -13% $44 7% $50 4% Year 38.1% 39.1% 39.6%
Consensus - - $44 5% $50 5%
Q4 $44 -6% $46 6% $51 3% Operating Margins 2008A 2009E 2010E
Consensus - - $46 5% $52 4% Q1 9.9% 10.4% 10.0%
Annual $182 1% $172 -5% $195 14% Q2 9.8% 7.9% 9.5%
Consensus - - $172 -5% $196 14% Q3 11.3% 9.5% 10.8%
Guidance $170 to $175 -6.4% to -3.7% Q4 12.4% 11.0% 11.1%
Year 8.6% 9.7% 10.4%
EPS 2008A y/y 2009E y/y 2010E y/y
Q1 $0.23 25% $0.10 -57% $0.14 37%
Q2 $0.18 -7% $0.04 -78% $0.13 227%
Q3 ($0.04) - $0.07 - $0.15 122%
Q4 $0.12 -65% $0.10 -18% $0.16 68%
Annual $0.49 -47% $0.30 -38% $0.58 91%
Consensus - - $0.31 -37% $0.54 74%
Guidance N/A N/A
RISK: The Indian BPO sector is relatively nascent compared to the IT services vendors. The sector has all the characteristics of a young
group as the growth rates are exciting, but the margin profile is not yet as stimulating. Also, the attrition rates are higher and there is friction
among the client base.
COMPANY DESCRIPTION: Headquartered in New York, NY, ExlService is an offshore outsourcing solutions provider that offers business
process outsourcing (BPO), research & analytics, and risk advisory services to companies in the banking, financial services, and insurance
(BFSI), utilities, healthcare, and media sectors. The company utilizes the comparatively lower cost labor supply located in offshore locations
(India) to serve the needs of its U.S. and U.K. clients. ExlService has approximately 9,500 employees in delivery centers in India and the
Philippines.
- 49 -
IMPORTANT DISCLOSURES
Research Analyst Certification
I, Joseph D. Foresi, the Primarily Responsible Analyst for this research report, hereby certify that all of the views expressed in
this research report accurately reflect my personal views about any and all of the subject securities or issuers. No part of my
compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views I expressed in this
research report.
Janney Montgomery Scott LLC ("JMS") Equity Research Disclosure Legend
Individual disclosures for the companies mentioned in this report can be obtained by calling or writing Janney Montgomery
Scott LLC as provided on the first page of this report. Disclosure Site
Definition of Ratings
BUY: Janney expects that the subject company will appreciate in value. Additionally, we expect that the subject company will
outperform comparable companies within its sector.
NEUTRAL: Janney believes that the subject company is fairly valued and will perform in line with comparable companies
within its sector. Investors may add to current positions on short-term weakness and sell on strength as the valuations or
fundamentals become more or less attractive.
SELL: Janney expects that the subject company will likely decline in value and will underperform comparable companies
within its sector.
Janney Montgomery Scott Ratings Distribution as of March 31, 2009
IB Serv./Past 12 Mos.
Rating Count Percent Count Percent
BUY [B] 92 42.20 7 7.61
NEUTRAL [N] 118 54.10 5 4.24
SELL [S] 8 3.70 0 0.00
*As a percent of total coverage.See ratings definition above.

Other Disclosures
Investment opinions are based on each stock’s 6-12 month return potential. Our ratings are not based on formal price targets,
however our analysts will discuss fair value and/or target price ranges in research reports. Decisions to buy or sell a stock should
be based on the investor’s investment objectives and risk tolerance and should not rely solely on the rating. Investors should
read carefully the entire research report, which provides a more complete discussion of the analyst’s views.
This research report is provided for informational purposes only and shall in no event be construed as an offer to sell or a
solicitation of an offer to buy any securities. The information described herein is taken from sources which we believe to be
reliable, but the accuracy and completeness of such information is not guaranteed by us. The opinions expressed herein may be
given only such weight as opinions warrant. This Firm, its officers, directors, employees, or members of their families may have
positions in the securities mentioned and may make purchases or sales of such securities from time to time in the open market or
otherwise and may sell to or buy from customers such securities on a principal basis.Supporting information related to the
recommendation, if any, made in the research report is available upon request.
- 50 -
Gary Schatz Managing Director (215) 665-6234
Director of Research gschatz@jmsonline.com
Liam D. Burke Director/Research (202) 955-4305
Special Situations lburke@jmsonline.com
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Water dcoy@jmsonline.com
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Food • Beverage jfeeney@jmsonline.com
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Real Estate Investment Trusts skrewson@jmsonline.com
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Industrials jlucas@jmsonline.com
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Joseph D.

May 18, 2009

Global Services Notebook-May 2009

Equity Research Research Analyst Certifications and Important Disclosures

Offshore Peer Group Average 14.0 x 14.7 x 14.4 x -3% 1.8 x

BPO (FAO-Financial Accounting Outsourcing):

Offshore Peer Group Relative to S&P 500 (+Premium/-Discount) 8% -3% 17%

Table 2: Annual Revenue Growth

Table 3: Sequential Total Headcount Growth

Table 5: Trailing Twelve Month (TTM) Attrition Rates

42.0% 43.7% 46.5% 20.8% 27.1%

250 32.9% 181

Table 6: EPS Results (March 2009)

INFY WIT CTSH SYNT PTI

Guidance (b) $0.55 - $0.37-$0.38 - -

Our Estimate $0.54 $0.13 $0.37 $0.48 $0.13

Consensus $0.54 $0.13 $0.37 $0.48 $0.18

(a) SYNT-GAAP EPS is $0.66.

Our Revenue Estimate $1,071.7 $1,010.1 $760.0 $95.5 $157.8

Revenue Consensus $1,077.6 $1,286.4 $761.6 $96.8 $158.5

Earnings Guidance (b) $0.47 - $0.37 - -

Our Earnings Estimate $0.47 $0.13 $0.37 $0.50 $0.28

Earnings Consensus $0.48 $0.12 $0.37 $0.50 $0.26

Fiscal Year (c) FY2010 FY2009

Our Revenue Estimate $4,401.7 $4,107.3 $3,098.2 $385.6 $634.5

Revenue Consensus $4,419.0 $5,321.0 $3,098.0 $394.0 $631.0

Earnings Guidance (b) $1.91 to $2.00 - $1.53 $2.12-$2.42 -

Our Earnings Estimate $1.96 $0.53 $1.53 $2.17 $1.00

Earnings Consensus $1.97 $0.50 $1.54 $2.15 $0.97

Headcount Metrics: (b)

March Quarter Pricing Decline

Pricing Comments (March Quarter 2009)

Management assumes pricing will remain at the

Pricing was down a little in line with

Potential H-1B Visas Legislation:

• H-1B-person in a specialty occupation

Potential Tax Code Legislation:

STPI Tax Holiday:

Onsite/Offshore Revenue Mix:

Figure 2: Onsite/Offshore Revenue Mix (March 2009)

Source: Company Reports, JMS Research

Table 9: Revenue Mix Shift

Table 10: Impact of an Increase in Offshore Work on Margins

Figure 3: Offshore Utilization*

*Utilization includes trainees. INFY-JMS estimated Offshore Utilization.

Table 11: Increase/Decrease in Utilization

Y/Y 11% -4% 1% -6% 0% 3% 10%

Source: Company Reports, JMS Research

Table 12: Impact of Increase in Utilization on Margins

Table 13: SG&A as % of Revenue

Table 14: Offshore Vendor Exposure to Clients in the Headlines

Merrill Lynch (MER) Insignificant No Exposure No Exposure No Exposure No Exposure Significant

Clients Confirmed Defection Potential Beneficiaries Est. Contract Size

Table 17: Short Interest Metrics

Figure 4: U.S. Dollar to Indian Rupee

Monthly Depreciation (+)/Appreciation (-) on an Absolute Basis

Source: Federal Bank of New York (noon rate), JMS Research

Table 18: Impact of Rupee Fluctuation on Margins

Monthly Depreciation (+)/ Appreciation (-) on an Absolute Basis

Source: JMS Research

Monthly Depreciation (+)/Appreciation (-) on an Absolute Basis

Source: JMS Research

Table 19: Recent Company Notes