Infosys Technologies (INFY)

Shibulal

Yeah actually as Mohan said we have thousands of projects running during the year, and if you look at our ability to scale in the projects, we have proved that this year, we have scaled 40-50% in number of projects while keeping the productivity up and the quality levels up. The number of critical complaints which we had this year was less than, we have seen a continued reduction in the number of critical complaints from customers. So we believe that we will continue to scale and we have the ability to scale at the same rate.

Shibulal

We are not giving a separate guidance for consulting per se because as I said it is part of our embedded portfolio of services.

Udayan

Akshaya when people compare Progeon with other BPO outfits, they inevitably end up comparing the size, this is x size, this is Y, and this is Progeon, so it seems modeled on the size. Are you positioning yourself as slightly different from the existing large BPO outfits in India?

Akshaya Bhargava

We have always said that, you know, we are focussed in a very different kind of BPO business. I mentioned roughly 20% of our revenues come from voice related transaction. So 80% of $ 43 million roughly, which is what we did last year, we would be one of the largest, if not the largest transaction processing company third party BPO company in India. We are also doing things like, we have entered into knowledge services. We have our first customer which is a very large European bank for whom we do things like fixed income research and credit analysis. Just to give you an example on the credit analysis, this bank covers roughly 6,000 listed companies globally. For 1,800 of those the credit rating, or at least 90% of it is done from Progeon. So it is a very high end work and very different kind of work. So the moral of the story is that size alone does not say the full story.

Udayan

But will size come in these legs of the BPO chain, or is size necessarily going to be driven by voice do you think?

Akshaya Bhargava

No, I think size will come in, but this work is much harder. It takes much longer to win. It takes much longer to ramp up, and it takes much longer to see the revenue flow, but the good part is that exit barriers for the customer in this space are very high.

Udayan

Is that why you choose it, or is it essentially higher margin than voice, which is why you lean towards this side of the business.

Akshaya Bhargava

We believe we can add greater value there because you see when you do this you get end to end business, and when you do the end to end processing, you not only are able to provide huge benefits to customers in terms of productivity, quality and efficiency, but you are also able to take a look at the underlying technology and cross leverage the Infosys expertise into BPO because we believe again that is a very important direction going forward.

Udayan

Mohan, last words with you. You are saying Q2, Q3, Q4 will be back on track with the volume growth story. This hiccup, if I can call it that, is just temporary?

Mohandas Pai

Udayan, if you look at last year too, we had a lower growth rate in the guidance for the first quarter this year, and this year the guidance is lower than that, but I do think at this point of time that we have a very strong confidence in our guidance, and we are people who look at our guidance at the beginning of the year from many angles, do a lot of

analysis, and try to make sure that the predictability of the guidance is very very strong. That is why you find us always talking about what we see at this point of time, and this point of time we have given this guidance, we have full confidence in this guidance, and we have done our homework to make sure that we can do this guidance. We are putting in the investments in place. We are investing about $ 220 million this year, it is a very strong testimony to the confidence we have in whatever we have said.

Udayan

Can you say anything about the timing of this sponsored ADS?

Mohandas Pai

Well, all I could say is that we are in discussion with our bankers, it is a matter that we have been discussing for quite some time, and as and when the board of the company decides, we should be able to go on the road but the secondary offering literally has some time limitation. For example, you need to give minimum 15 days to make the open offer for shareholders to tender their shares. Then we need to publish, you know, the document with SEC. So there is a procedural period that is required, but like as I said, we have not taken a decision at this point of time. We are in discussion with our investment bankers and in the board too we had a discussion today, so I think you know we will look at it.

Udayan

Will you start the process in this quarter you think when does it end up being done.

Mohandas Pai

Well we have to register the document. For example, we already have document filed with SEC. The document has to be refreshed for the last quarter’s results so that document becomes up-to-date. Document filing will carry on, and then after the board decides or the bankers tell us the good time to do and the board says yes, then you have to issue the letter of offer to the local shareholders. So refreshment of document and making it up to date is an ongoing exercise, it happened earlier and it will go on. The board has to take the decision, and I think we are looking at it.

Udayan

Thank you very much gentlemen, all the best for 2006. Thanks.

Mohandas Pai

Thank you.

Udayan

Well, that is Infosys for this quarter. We will be back next quarter as always and touch base with them on various aspects, and of course the next quarter will be an important one because we will touch base on whether the volume growth, which seems to have tapered off a bit, particularly in the financial services sector, is getting back on track. That will be three months from now. For today, we told you what the guidance is. You heard from the management. That is it from Bangalore. I will see you next quarter around.