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Home / India News / 2007 / February / February 5, 2007
Syntel Announces Financial Results for the Year 2006

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Syntel Announces Financial Results for the Year 2006

Chennai, Tamil Nadu, India

Syntel, a global Information Technology Services and Business Process Outsourcing (BPO) firm, announced financial results for the fourth quarter and full year, ended December 31, 2006. The company's solid growth in 2006 has pushed the market capitalization up by 75% (year over year) to Rs 6300 crores (US$ 1.35 Billion) as on 30th January 2007.

Syntel's year-over-year revenues have increased by around 20% to Rs 1202.39 crores. The company had achieved a sequential revenue growth of around 6%, to Rs 325.295 crores. Syntel, which commenced the year 2006 with revenue and EPS Guidance of Rupees 1112.5 - 1157 crores and $1.00 to $1.05, ended with much higher numbers. It provided 2007 guidance in the range of Rs 1379.5 - 1446.2 crores and Earnings per Share between $1.25 to $1.33.

Syntel's global headcount year-over-year grew 37% to reach 8,364, the bulk based out of India. The company added 21 new clients in 2006 and launched 395 new engagements. It also added nine new "Hunting Licenses" or preferred partnership agreements during the year, taking the total to 80 strategic relationships.

Commenting on the company's performance for FY06, Mr. Keshav R Murugesh, President and COO, Syntel Inc. said:" We expect to invest further Rs 180 crores during 2007 in India. These investments will be focused on Mumbai, Pune and Chennai where our global delivery centers exist. One of our great success stories was our Infrastructure where we added 6 new offices and a state-of-art campus in Pune in the year 2006.

He said that the 2 remaining blocks of 2300 seats at the Pune campus will be completely fitted out and operational in the first quarter of 2007. The company will continue its expansion on the additional 37 acre land. The Pune Campus now has 86 acres. Syntel will be ready with another 700+ seats in Chennai in DLF SEZ Park by April'07. The company proposes to commence construction of its 29 acre Chennai campus during this quarter which will have the capacity of 5000 people in Phase 1.

Syntel has grown approximately 2000+ headcount in Powai, SEEPZ and Thane. In 2007, the company plans to grow 1000+ seats in Mumbai and also plans expansion/growth in Mumbai or outskirts of Mumbai. The Delhi - Syntel has opened a Global Development Center as well as recruitment center in Gurgoan, Delhi for its customers. The company will also add, approximately 100 seats in Phoenix, Arizona USA during the first quarter of 2007.

Mr. Keshav said that as part of Syntel's long term strategy of diversification, it will also be investing in new campus sites in Tier 2 and Tier 3 locations in India. He said that Syntel's BPO business continued to shine with very aggressive growth. The company, which began work for our first Indian customer during the year and are seeing steady growth with that strategic relationship. It's offshore and onsite mix reached a new high 73:27 for our customers in 2006.

Syntel will continue to focus on providing incremental value and innovation as we work hard to become "Partner of Choice" for integrated BPO/ITO services. The company is investing heavily in expanding the portfolio of high value services to enable it to engage better with its client base. The company's current clients range from the Big Three US auto makers to Borders Group and the Target Chip Ganassi racing team.

On the human resource front, there was a net addition of 2271 employees during the year. In India, Syntel promoted 800 managers within the company putting many careers on the fast track. Syntel is looking at a 25,000 strong workforce, this would essentially mean that around 50% of our current people will have an exciting career path to grow and evolve as Syntel's Leaders. So to achieve this Syntel plans increase its managers pool to around 3000 Managers who will lead Syntel forward. This has been a great motivator for most of the employees and this has resulted in low attrition rate at Syntel.

Syntel has been included on the 2007 Global Services 100, a list of the top global providers of business and technology services compiled by Global Services magazine and neoIT consulting firm that specializes in services globalization. The Global Services 100, now in its second year, is a tool for buyers of business and technology services, included Syntel in the top 100 list based upon the company's effective operations, service offerings, client relationships and human capital.

Syntel's USP (Value delivered to customers):

-- Our fixed price offering currently stands at 39% of revenues and we are leaders in this category. Nobody is operating fixed priced projects at this level. This goes to prove our maturity, confidence & client's faith in the quality of our work. This has helped us reap benefits and helped us sustain our clients in the long run. Our client retention record is very strong. It is interesting to see that it is 15 times more costly to go after more accounts than to grow an existing account.

-- Our integrated IT-BPO offering has appealed to our existing clients and we also saw additional business coming from this offering. We expect this offering to grow significantly in 2007.

-- A Fortune 500 company experienced significant productivity and ROI benefits as a result of the successful implementation of Syntel's Integrated solution for IT-BPO.

-- Our BnFSI has shown dramatic results growing 26% in 2006 while contributing to 61% of our business.

-- Healthcare has contributed approximately 17% and we are currently leaders in this category

-- In services profile we have maintained our focus on Application Outsourcing, e-business and BPO while maintaining Team sourcing to optimize the right mix at projects.

-- Syntel's focus area of Applications Outsourcing accounted for 71 percent of total revenue

-- e-Business contributing 13 percent,

-- Business Process Outsourcing (BPO) at 10 percent and Team Sourcing at 6 percent

About Syntel

Syntel (NASDAQ: SYNT - News) is a leading global provider of custom outsourcing solutions in a broad spectrum of information technology and information technology-enabled services. The Company's vertical practices support the entire Design-Build-Operate-Optimize lifecycle of systems and processes for corporations in the Financial Services, Insurance, Retail, Health Care and Automotive industries. The first US-based firm to launch a Global Delivery Service to drive speed-to-market and quality advantages for its customers, Syntel now leverages this efficient model for the majority of its Global 2000 customers. Recently named one of Forbes Magazine's "Best 200 Small Companies in America," Syntel has more than 8,300 employees worldwide, is assessed at Level 5 of the SEI's CMMI, BS 7799-2:2002 as well as ISO 9001:2000 certified. To learn more, visit us at:

Safe Harbor Provision

This news release includes forward-looking statements, including with respect to the future level of business for Syntel, Inc. These statements are necessarily subject to risk and uncertainty. Actual results could differ materially from those projected in these forward-looking statements as a result of certain risk factors set forth in the Company's Annual Form 10-K document dated March 14, 2006. Factors that could cause results to differ materially from those set forth above include general trends and developments in the information technology industry, which is subject to rapid technological changes, and the Company's concentration of sales in a relatively small number of large customers, as well as intense competition in the information technology industry, which the Company believes will increase.

Asheem Bakhtawar, Practice Director, Syntel, Inc, +91 (022) 2829 2661/ +91 9820239075

Source: Syntel, Inc. (Business Wire India)

Press release presented here is sourced from the Source mentioned above and is provided on as-is basis. Please contact the Company / Source directly for any further information in regard to this release. This website will be unable to assist you in regard to the accuracy or correctness of information in this release.

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