Infosys Technologies Announces Results for the Quarter ended June 30, 2006; Q1 revenues grew sequentially by 11%

Infosys Technologies (NASDAQ:INFY):

Guidance revised upwards. Revenues expected to grow 35.4% - 35.9%
in fiscal 2007

Highlights

Consolidated results for the quarter ended June 30, 2006

-- First quarter revenues at $ 660 million, up 38.7% from the
corresponding quarter last fiscal

-- Earnings per American Depositary Share (ADS)(a) increased to
$ 0.63 from $ 0.45 in the corresponding quarter last fiscal

-- 38 new clients were added during the quarter.

-- Gross addition of 8,097 employees (net 5,694) for the quarter

-- 58,409 employees as on June 30, 2006

Outlook for the quarter ending September 30, 2006 and the fiscal
year ending March 31, 2007

-- Consolidated revenues expected to be between $ 710 million and
$ 715 million for the quarter ending September 30, 2006 (YoY
growth of 35.5% - 36.5%) and between $ 2.91 billion and $ 2.92
billion for the fiscal year ending March 31, 2007 (YoY growth
of 35.4% - 35.9%)

-- Consolidated earnings per ADS(a) expected to be between $ 0.64
and $ 0.65 for the quarter ending September 30, 2006; (YoY
growth of 25.5% - 27.5%) and between $ 2.70 and $ 2.73 for the
fiscal year ending March 31, 2007; (YoY growth of 32.4% -
33.8%)

Infosys Technologies Limited ("Infosys" or "the company") today
announced financial results for its first quarter ended June 30, 2006.
Revenues for the quarter aggregated $ 660 million, up 38.7% from $ 476
million for the quarter ended June 30, 2005.
"Our efforts in building the brand, developing the client base,
and expanding strategic accounts have fueled our robust organic
model," said Nandan M. Nilekani, CEO, President and Managing Director.
Infosys is helping a large semiconductor company address its
operational challenges through effective customer data management. A
leading hi-tech distributor has lowered its IT support costs by
adopting an Infosys shared-services model to provide Oracle ERP
support for its multiple operating subsidiaries.
Infosys is working with a large specialty retailer in the US to
develop a merchandise planning application that will permit planners
to model the sales and inventory plans in real-time for improved
decision-making and forecasting.
A Fortune 100 pharmaceutical and medical devices manufacturer is
using Infosys' expertise in strategic business transformation
initiatives to achieve an efficient world-class IT services sourcing
model.
Infosys is defining the product roadmap for corporate actions for
a leading US financial services conglomerate. Infosys is also helping
the company with a buy-or-build analysis.
"We benefited from the depreciation of the rupee against all major
currencies during the quarter," said V. Balakrishnan, Chief Financial
Officer. "Our margins have been maintained, despite increase in
salaries and visa costs. We continue to focus on margins without
compromising on investments needed to meet our growth objectives."

(a) Not adjusted for stock split

Changes to Board of Directors

Mr. N. R. Narayana Murthy, Chairman and Chief Mentor, turns 60 on
August 20, 2006 and as per the service rules of the company, he will
retire from the services of the company on that date. In this
connection, the Board resolved to appoint Mr. Murthy as an Additional
Director of the company with effect from August 21, 2006 and further
resolved that Mr. Murthy will serve as the Non-Executive Chairman of
the Board and Chief Mentor with effect from August 21, 2006.
The Board also resolved that Mr. Nandan M. Nilekani, currently the
Chief Executive Officer, President and Managing Director of the
company, be re-designated as the Chief Executive Officer and Managing
Director with effect from August 21, 2006 and that Mr. S.
Gopalakrishnan, currently the Chief Operating Officer and Deputy
Managing Director, be promoted and re-designated as the President,
Chief Operating Officer and Joint Managing Director with effect from
August 21, 2006.

About the company

Infosys (NASDAQ:INFY) defines, designs and delivers IT-enabled
business solutions. These provide our clients with strategic
differentiation and operational superiority, thereby increasing their
competitiveness. Each solution we provide is delivered with the
industry-benchmark "Infosys Predictability" that gives our clients
peace of mind. With Infosys, they are assured of a transparent
business partner, business-IT alignment with flexibility, world-class
processes, speed of execution and the power to stretch their IT budget
by leveraging the Global Delivery Model that Infosys pioneered.
Infosys has over 58,000 employees in over 35 offices worldwide. For
more information, visit www.infosys.com.

Safe Harbor

Certain statements in this release concerning our future growth
prospects are forward-looking statements, within the meaning of
Section 27A of the U.S. Securities Act of 1933, as amended, and
Section 21E of the U.S. Securities Exchange Act of 1934, as amended,
which involve a number of risks and uncertainties that could cause
actual results to differ materially from those in such forward-looking
statements. The risks and uncertainties relating to these statements
include, but are not limited to, risks and uncertainties regarding the
success of our investments, risks and uncertainties regarding
fluctuations in earnings, our ability to manage growth, intense
competition in IT, business process outsourcing and consulting
services including those factors which may affect our cost advantage,
wage increases in India, our ability to attract and retain highly
skilled professionals, time and cost overruns on fixed-price,
fixed-time frame contracts, client concentration, restrictions on
immigration, industry segment concentration, our ability to manage our
international operations, reduced demand for technology in our key
focus areas, disruptions in telecommunication networks or system
failures, our ability to successfully complete and integrate potential
acquisitions, liability for damages on our service contracts, the
success of the companies in which Infosys has made strategic
investments, withdrawal of governmental fiscal incentives, political
instability and regional conflicts, legal restrictions on raising
capital or acquiring companies outside India, and unauthorized use of
our intellectual property and general economic conditions affecting
our industry.
Additional risks that could affect our future operating results
are more fully described in our United States Securities and Exchange
Commission filings including our Annual Report on Form 20-F for the
fiscal year ended March 31, 2006. These filings are available at
www.sec.gov. Infosys may, from time to time, make additional written
and oral forward-looking statements, including statements contained in
the company's filings with the Securities and Exchange Commission and
our reports to shareholders. The company does not undertake to update
any forward-looking statements that may be made from time to time by
or on behalf of the company.
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Infosys Technologies Limited and subsidiaries
Consolidated Balance Sheets
(Dollars in millions)

As of
---------------------
March 31, June 30,
2006 2006
---------------------
(1) (Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $889 $392
Investments in liquid mutual fund units 170 358
Trade accounts receivable, net of allowances 361 408
Unbilled revenue 48 57
Prepaid expenses and other current assets 40 51
Deferred tax assets 1 2
---------------------
Total current assets 1,509 1,268
Property, plant and equipment, net 491 496
Goodwill 8 91
Intangible assets, net - 19
Deferred tax assets 13 12
Advance income taxes 18 19
Other assets 27 33
---------------------
Total Assets $2,066 $1,938
---------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $3 $2
Income taxes payable - 1
Client deposits 2 2
Unearned revenue 44 54
Other accrued liabilities 160 147
---------------------
Total current liabilities 209 206
Non-current liabilities
Other non-current liabilities 5 5
Minority interests 15 2
Stockholders' Equity
Common stock, $0.16 par value
600,000,000 equity shares authorized,
Issued and outstanding -275,554,980 and
276,843,176 as of March 31, 2006 and June 30,
2006, respectively 31 31
Additional paid-in capital 410 444
Accumulated other comprehensive income 9 (46)
Retained earnings 1,387 1,296
---------------------
Total stockholders' equity 1,837 1,725
---------------------
Total Liabilities And Stockholders' Equity $2,066 $1,938
---------------------

(1) March 31, 2006 balances were obtained from audited financial
statements

Infosys Technologies Limited and subsidiaries
Unaudited Consolidated Statements of Income

(Dollars in millions except per share data)

Three months ended
June 30,
-------------------
2005 2006
-------------------
Revenues $476 $660
Cost of revenues 274 389
-------------------
Gross profit 202 271
-------------------
Operating Expenses:
Selling and marketing expenses 32 45
General and administrative expenses 37 56
-------------------
Total operating expenses 69 101
-------------------
Operating income 133 170
Gain on sale of long term investment - 1
Other income, net 7 28
-------------------
Income before income taxes and minority
interest 140 199
Provision for income taxes 18 23
-------------------
Income before minority interest $122 $176
Minority interest - 2
-------------------
Net income $122 $174
-------------------
Earnings per equity share(a)
Basic $0.45 $0.63
Diluted $0.43 $0.62
Weighted average equity shares used in
computing earnings per equity share(a)
Basic 269,581,842 274,995,563
Diluted 277,086,163 281,403,388

(a) Not adjusted for stock split
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