8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 22, 2010

Syntel, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Michigan	000-22903	38-2312018
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

525 E. Big Beaver Road, Suite 300, Troy, Michigan	48083
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code (248) 619-2800

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the follwing provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On April 22, 2010, Syntel, Inc. (the “Company”) issued a press release announcing results of operations and related financial information for the first quarter ended March 31, 2010. A copy of the press release is attached to this Report as Exhibit 99.1. The information contained in this Current Report, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except if the Company expressly states that such information is to be considered “filed” under the Exchange Act or incorporates it by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number
99.1	Press Release dated April 22, 2010.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		Syntel, Inc.
		(Registrant)
Date           April 22, 2010	By	/s/ Daniel M. Moore
		Daniel M. Moore, Chief Administrative Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated April 22, 2010.

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EX-99.1

Exhibit 99.1

Syntel Reports First Quarter 2010 Financial Results

Highlights:

• Q1 revenue of $116.0M, up 20% from year-ago quarter and down one percent sequentially

• Q1 EPS of $0.60 per diluted share, down 8% from year-ago quarter and 30% sequentially

• Q1 cash & short term investments of $213.2M

• Global Headcount of 13,682 as of March 31, 2010

TROY, Mich. – April 22, 2010 – Syntel, Inc. (NASDAQ: SYNT), a global information technology services and Knowledge Process Outsourcing (KPO) firm, today announced financial results for the first quarter, ended March 31, 2010.

First Quarter Financial Highlights

Syntel’s revenue for the first quarter increased 20 percent to $116.0 million, compared to $96.4 million in the prior-year period, and decreased one percent sequentially from $117.8 million in the fourth quarter of 2009. Sequentially, revenue growth was adversely impacted by approximately $6 million of short-term discretionary project work in the fourth quarter. During the first quarter, Applications Outsourcing accounted for 75 percent of total revenue, with Knowledge Process Outsourcing (KPO) at 16 percent, e-Business contributing six percent and TeamSourcing at three percent.

The Company’s gross margin was 42.4 percent in the first quarter, compared to 46.5 percent in the prior-year period and 50.2 percent in the fourth quarter of 2009. Selling, General and Administrative (SG&A) expenses were 19.2 percent in the first quarter, compared to 19.4 percent in the prior-year period and 17.0 percent in the previous quarter. Syntel’s income from operations reduced to 23.3 percent in the first quarter as compared to 27.1 percent in the prior-year period and 33.2 percent in the fourth quarter of 2009.

Sequentially, operating margins were pressured by accelerating hiring which reduced utilization levels, onsite wage increases, and a 2% appreciation in the Indian Rupee. The first quarter costs were adversely impacted by $2.6M due to exchange rate variations.

Net income for the first quarter was $25.1 million or $0.60 per diluted share, compared to $27.3 million or $0.66 per diluted share in the prior-year period and net income of $35.8 million or $0.86 per diluted share in the fourth quarter of 2009.

Operational Highlights

“During the first quarter, the demand for offshore services continued to improve for Syntel,” said Syntel CEO and President Prashant Ranade. “Revenue momentum in maintenance services was sustained during the quarter, and we were encouraged by the progress in moving new development initiatives through the pipeline.”

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“As long as our clients remain confident in economic stability, we expect to see improving sentiment towards strategic technology and process investments,” said Ranade. “While the top-line outlook is improving, margin pressures are also increasing. Appreciation in the Indian rupee, offshore wage increases, and the possible outcomes from a large contract negotiation all remain margin headwinds for 2010. Despite these challenges, it is critical that we continue our strategic investment programs and remain focused on driving long-term sustainable business value.”

2010 Guidance

Based on current visibility levels and an exchange rate assumption of 44.5 rupees to the dollar, the Company currently expects 2010 revenue of $445 to $470 million, and EPS in the range of $2.20 to $2.50. Syntel’s guidance assumes a range of discounts related to its KPO joint venture which would impact both revenue and margins in 2010. Guidance does not assume that the client will exercise its option to purchase the joint venture, nor does it assume that the contract will continue with the same pricing, terms and conditions and without economic impact to Syntel.

Syntel to Host Conference Call

Syntel will discuss its first quarter 2010 results today on a conference call at 10:00 a.m. (Eastern). To listen to the call, please dial (877) 837-3915. The call will also be broadcast live via the Internet at Syntel’s web site: investor.syntelinc.com. Please access the site at least 15 minutes prior to the call to register and download any necessary software. A replay will be available until April 29, 2010 by dialing (800) 642-1687 and entering “69907584”. International callers may dial (706) 645-9291 and enter the same passcode.

About Syntel

Syntel (NASDAQ: SYNT) is a leading global provider of integrated information technology and Knowledge Process Outsourcing (KPO) solutions spanning the entire lifecycle of business and information systems and processes. The Company is driven by its mission to create new opportunities for clients by harnessing the passion, talent and innovation of Syntel employees worldwide. Syntel leverages dedicated Centers of Excellence, a flexible Global Delivery Model, and a strong track record of building collaborative client partnerships to create sustainable business advantage for Global 2000 organizations. Recently named one of the “50 Best Managed Global Outsourcing Vendors” by The Black Book of Outsourcing, Syntel is assessed at SEI CMMi Level 5, and is ISO 27001 and ISO 9001:2000 certified. As of March 31, 2010, Syntel employed more than 13,600 people worldwide. To learn more, visit us at: www.syntelinc.com.

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 15, 2010.

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SYNTEL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT SHARE DATA)

	THREE MONTHS ENDED MARCH 31,
	2010		2009
Net revenues	$	116,039	$	96,434
Cost of revenues		66,800		51,562
Gross profit		49,239		44,872
Selling, general and administrative expenses		22,248		18,724
Income from operations		26,991		26,148
Other income, principally interest, net		2,283		985
Income before provision for income taxes		29,274		27,133
Income tax expense (benefit)		4,143		(216	)
Net income	$	25,131	$	27,349
Dividend per share	$	0.06	$	0.06
EARNINGS PER SHARE:
Basic	$	0.61	$	0.66
Diluted	$	0.60	$	0.66
Weighted average common shares outstanding:
Basic		41,483		41,356
Diluted		41,566		41,435

SYNTEL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

	March, 31 2010		December, 31 2009
ASSETS
Current assets:
Cash and cash equivalents	$	100,785	$	87,822
Short term investments		112,388		112,243
Accounts receivable, net of allowance for doubtful accounts of $3,060 and $3000 at March 31, 2010 and December 31, 2009, respectively		55,704		48,523
Revenue earned in excess of billings		16,004		5,809
Deferred income taxes and other current assets		27,243		23,739
Total current assets		312,124		278,136
Property and equipment		152,570		143,911
Less accumulated depreciation and amortization		59,519		54,271
Property and equipment, net		93,051		89,640
Goodwill		906		906
Non current Term Deposits with Banks		13,539		23,337
Deferred income taxes and other non current assets		22,730		20,603
	$	442,350	$	412,622
LIABILITIES
Current liabilities:
Accrued payroll and related costs	$	23,898	$	26,240
Income taxes payable		1,026		777
Accounts payable and other current liabilities		21,307		21,139
Deferred revenue		5,143		5,888
Total current liabilities		51,374		54,044
Other non current liabilities		8,957		8,540
Total liabilities		60,331		62,584
SHAREHOLDERS’ EQUITY
Total shareholders’ equity		382,019		350,038
Total liabilities and shareholders’ equity	$	442,350	$	412,622