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Infosys Technologies Limited

INFOSYS TECHNOLOGIES LIMITED (NASDAQ: INFY) ANNOUNCES STRONG REVENUE GROWTH FOR FIRST QUARTER

E-Transformation of Fortune 1000 Companies Drives Growth
Fremont, California, July 11, 2000

Highlights:
  1. First quarter revenues top $ 80.3 million, up 102.0% from the same quarter last fiscal
  2. Net earnings per American Depositary Share (ADS) increases to $ 0.20 from $ 0.10 in the same quarter last fiscal
  3. E-commerce revenues surge to 28.7% - up from 18.8% in the quarter ended March 31, 2000
  4. Revenues from start-up companies account for 10.9% of net revenues during the quarter as against 8.0% in the quarter ended March 31, 2000
  5. Quarterly addition in employees surpasses 1000 for the first time
  6. 32 new customers during the quarter
  7. Strategic investment of US$ 3 million in CiDRA Corporation and incubation of Onscan Inc.

Infosys Technologies Limited ("Infosys" or "the company") today announced financial results for its first quarter ended June 30, 2000, under US GAAP. Revenue for the quarter increased 102.0% to $ 80.3 million from $ 39.7 million in the quarter ended June 30, 1999.

Net Income for the quarter was $26.8 million ($ 13.3 million for the quarter ended June 30, 1999), or $ 0.20 per diluted ADS ($ 0.10). Included in Net Income was Other Income of $ 1.7 million ($ 1.9 million) arising due to exchange differences on translation of foreign currency deposits. Excluding this, the Net Income for the quarter ended June 30, 2000 was $ 25.1 million ($ 11.4 million) and the earnings per diluted ADS was $ 0.19 ($ 0.09).

Mr. N. R. Narayana Murthy, Chairman and CEO of Infosys, said, "This industry is all about innovation and change. We believe that our ability to innovate constantly and to keep pace with technological changes around the world has made us a trusted partner for Fortune 1000 companies."

E-commerce engagements contributed 28.7% of revenues during the quarter, as against 18.8% in the quarter ended March 31, 2000. The company's e-business strategy focusses on digitalizing traditional economy Fortune 1000 companies across the globe. The revenue from start-up companies was 10.9% during the quarter as against 8.0% in the quarter ended March 31, 2000."E-transforming Fortune 1000 companies has significantly contributed to our revenue growth", said Mr. Nandan M. Nilekani, Managing Director, President and COO, "Web-enabling traditional economy players is an unprecedented market opportunity - our expertise in legacy platforms and our ability to rapidly assimilate new technologies enable us to offer a highly compelling value proposition to this segment."

"Our global delivery model allows us to be highly competitive, while providing quality services to our clients. The company maintained its margins despite annual increase in salary effective this quarter and higher training costs for a record 1000+ new recruits ",said Mr. T. V. Mohandas Pai, Director - Finance and Administration, and Chief Financial Officer.

About Infosys Technologies Ltd.

Infosys Technologies Ltd. (NASDAQ: INFY) is a publicly held company and a world leader in providing IT solutions to Fortune 1000 and emerging new economy companies. Infosys' range of services includes IT consulting, IT architecture, application development, e-commerce and Internet consulting, and software maintenance. The company is ISO 9001 and SEI CMM Level 5 certified.

Using its proprietary Global Delivery Model, the company leverages talent and infrastructure in different parts of the world to provide high-quality and rapid time-to-market solutions to its clients. The US headquarters of Infosys is located in Fremont, California. The company also maintains offices throughout the US, Europe and Asia. For more information, contact P. R. Ganapathy, Investor Relations Officer, at +1 (510) 742-3030 (e-mail: ) or visit Infosys on the World Wide Web at www.infosys.com.

Safe Harbor Provision

Except for the historical information and discussions contained herein, statements included in this release may constitute "forward-looking statements". These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those that may be projected by these forward looking statements. These risks and uncertainties include, but are not limited to competition, acquisitions, attracting, recruiting and retaining highly skilled employees, technology, law and regulatory policy and managing risks associated with customer projects as well as other risks detailed in the reports filed by Infosys Technologies Ltd. with the Securities and Exchange Commission, U.S.A. Infosys undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof.

P. R. Ganapathy
Investor Relations Officer
Contact: +1 (510) 742-3030

Marti Colwell
Creative Marketing Group
Contact: +1 (858) 458-1818

Infosys Technologies Limited

Balance Sheets in US$
As of
June 30,
As of
March 31,
2000 1999 2000
(unaudited) (unaudited) (audited)
ASSETS
Current Assets
Cash and cash equivalents 105,756,757 102,612,617 116,599,486
Trade accounts receivable, net of allowances 51,164,692 24,632,558 31,233,515
Prepaid expenses and other current assets 12,566,158 6,638,499 11,256,295
Total current assets 169,487,607 133,883,674 159,089,296
Property, plant and equipment - net 61,700,055 25,977,938 47,554,772
Deferred income taxes 2,685,061 1,379,249 2,566,266
Investments 6,177,908 177,938 3,177,938
Other assets 6,977,423 4,224,381 6,894,598
TOTAL ASSETS 247,028,054 165,643,180 219,282,870
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable 472,473 55,556 976,840
Client deposits 332,058 15,685 425,724
Other accrued liabilities 12,197,959 8,522,103 13,835,635
Income taxes payable 2,965,746 2,101,206 1,878,977
Unearned revenue 14,394,383 5,201,759 4,029,173
Total current liabilities 30,362,619 15,896,309 21,146,349
Stockholders' Equity
Common stock, $0.16 par value; 100,000,000 equity shares authorized, Issued and outstanding - 66,151,367, 66,138,800 and 66,150,700 as of June 30, 2000, June 30, 1999 and March 31, 2000 8,593,585 8,592,137 8,593,510
Additional paid-in-capital 121,529,268 121,407,662 121,506,726
Accumulated other comprehensive income (18,765,207) (13,052,834) (14,137,933)
Deferred stock compensation (16,323,017) (21,466,348) (17,598,813)
Retained earnings 121,630,806 54,266,254 99,773,031
Total stockholders' equity 216,665,435 149,746,871 198,136,521
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 247,028,054 165,643,180 219,282,870

Infosys Technologies Limited

Statements of Income in US$
Quarter ended Year ended
June 30, 2000 June 30, 1999 March 31, 2000
(unaudited) (unaudited) (audited)
Revenues 80,257,833 39,728,900 203,443,754
Cost of revenues 41,962,161 20,620,264 111,080,546
Gross profit 38,295,672 19,108,636 92,363,208
Operating Expenses:
Selling and marketing expenses 4,197,515 2,489,358 9,643,970
General and administrative expenses 6,416,913 3,062,698 17,102,550
Amortization of stock compensation expense 1,275,796 1,250,100 5,117,635
Total operating expenses 11,890,224 6,802,156 31,864,155
Operating income 26,405,448 12,306,480 60,499,053
Other income, net 3,403,057 3,210,701 9,038,792
Income before income taxes 29,808,505 15,517,181 69,537,845
Provision for income taxes 2,976,832 2,206,302 8,193,317
Net income available for common stockholders 26,831,673 13,310,879 61,344,528
Earnings per American Depositary Share
Basic 0.20 0.10 0.47
Diluted 0.20 0.10 0.47
Weighted American Depositary Shares used in computing earnings per American Depositary Share
Basic 131,954,534 131,377,332 131,319,250
Diluted 134,563,838 131,377,332 131,727,980

Note: Two American Depositary Shares equal one Equity Share

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