Satyam results for Q1FY08

Dear Investor,

The first quarter of Fiscal Year 2008 was a landmark period that commemorated the first 20 years of Satyam's journey to deliver stakeholder value. It is all the more inspiring to enter into the 21st year on the heels of an encouraging performance and an upgrade to our annual guidance.

During Q1, Satyam recorded sequential revenue growth of 10% in US $. However, an unprecedented appreciation of the rupee against all major currencies during Q1 reduced the corresponding growth rate in rupees to 2.87%. Our revenue increase compares very favorably with the guidance stated at the beginning of Q1. EPS for Q1 was Rs. 5.67.

In Q1, we added 29 customers including 2 Fortune US 500 corporations. Our net addition of associates in Q1 was 2716. The number of customers billing more than US $5 mn. increased to 65 from 57 during the quarter.

Other first quarter highlights included revenue growth across all verticals and similar achievements in our service offerings and regions. Engineering Services and Infrastructure Management Services grew by 14% and 36.4%, respectively, validating significant investments in these areas over the past several years. Expansion in these services is over and above accelerated growth in Consulting and Enterprise Business Solutions, which grew by 15% in Q1""another strong showing for a practice that has grown swiftly and steadily for a long time.

In addition, our focus on maximizing customer value by delivering integrated business solutions and by partnering with them in their business transformation has resulted in stronger relationships. It has also led to an increase in strategic engagements. For instance, Nestle selected Satyam as a partner for its Global Business Excellence project in Q1.

Moreover, our continued focus on expanding our global footprint has resonated with the market. Our enhanced presence in Asia-Pacific and Europe has led to increased opportunities and regional growth. This along with our well-established strength in the US positions us to leverage our global presence to service and provide the transformational efforts of our customers.

Furthermore, during Q1, we engaged in discussions with numerous high-profile, global clients at SatyamWorld Customer Summit. More than 60 CXOs and 150 other decision makers attended the event. These discussions indicated that the demand environment is positive. Against this backdrop and our current performance, we have increased our annual guidance as per US GAAP. Our revenue growth will be between 34 percent and 35.5 percent in FY08, and earnings per ADS will grow between 28.3% and 29.7%.

I am delighted to share with you that Satyam has been ranked as the No. 3 global outsourcing vendor and No. 1 among Indian IT services companies in a survey conducted by Brown-Wilson Group Inc., for the Black Book of Outsourcing' Top 50 Best Managed Companies, 2007.

Overall, it was a strong first quarter performance, and a good beginning to FY08""a year when Satyam's total income will exceed the US$2 billion mark.

B. Ramalinga Raju

Founder & Chairman