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) October 20, 2011

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 October 20, 2011, Syntel, Inc. (the “Company”) issued a press release announcing results of operations and related financial information for its third quarter ended September 30, 2011. 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 October 20, 2011.

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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 October 20, 2011	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 October 20, 2011.

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EX-99.1

Exhibit 99.1

Syntel Reports Third Quarter 2011 Financial Results

Highlights:

• Q3 revenue of $167.6M, up 19% from year-ago quarter and 7% sequentially

• Q3 EPS of $0.63 per diluted share, including a previously disclosed one-time cost, which reduced EPS by $0.17 per diluted share

• Q3 cash & short term investments of $301.3M

• Global Headcount of 18,293 on September 30, 2011, up 12% versus prior year

TROY, Mich. – October 20, 2011 – Syntel, Inc. (NASDAQ: SYNT), a global information technology services and Knowledge Process Outsourcing (KPO) firm, today announced financial results for the third quarter, ended September 30, 2011.

Third Quarter Financial Highlights

Syntel’s revenue for the third quarter increased 19 percent to $167.6 million, compared to $140.5 million in the prior-year period, and increased seven percent sequentially from $157.0 million in the second quarter of 2011. During the third quarter, Applications Outsourcing accounted for 75 percent of total revenue, with Knowledge Process Outsourcing (KPO) at 15 percent, e-Business contributing eight percent and TeamSourcing at two percent.

The Company’s gross margin was 39.8 percent in the third quarter, compared to 39.6 percent in the prior-year period and 36.2 percent in the second quarter of 2011. Selling, General and Administrative (SG&A) expenses were 21.9 percent of revenue in the third quarter, compared to 17.7 percent in the prior-year period as well as in the previous quarter. As previously disclosed, Syntel incurred a one-time expense to resolve all claims brought as part of an arbitration proceeding with a former client arising out of a 2004 engagement. The inclusion of this expense drove SG&A higher during the quarter; excluding this expense, SG&A declined as a percent of revenue versus both the year-ago quarter and the second quarter of 2011.

The third quarter income from operations was 17.9 percent of revenue as compared to 21.9 percent in the prior-year period and 18.5 percent in the second quarter. Excluding the aforementioned one-time expense, operating margins widened from both the prior-year period and the second quarter of 2011.

After reversals of tax provisions and tax reserves of $1.8 million, no longer required, net income for the third quarter was $26.2 million or $0.63 per diluted share, including the $0.17 impact from the arbitration settlement, compared to $30.4 million or $0.73 per diluted share in the prior-year period and net income of $27.6 million or $0.66 per diluted share in the second quarter of 2011

During Q3, Syntel spent $6.2 million in CAPEX, largely in support of campus infrastructure, and finished the quarter with cash and short-term investments of $301.3 million. The Company also added 266 net employees, ending the quarter with 18,293 employees globally.

Operational Highlights

“Syntel continued to execute well on its operational and financial goals,” said Syntel CEO and President Prashant Ranade. “Year-over-year revenue growth of 19% in the third quarter was strong. Our pipelines are healthy and client spending patterns remain unchanged, despite the macroeconomic uncertainties.”

“Syntel remains focused on the long-term,” said Ranade. “Our hiring and infrastructure build-out plans are on track and we expect these investments to drive considerable and sustainable value over time.”

“During the quarter, we strengthened our relationships with strategic clients and focused on new initiatives to drive future growth from clients 6 through 20. Syntel is well-positioned to help our clients meet their internal operational goals in this uncertain climate. As a result, when companies seek to reduce expenses we are trusted partners and part of the solution.”

2011 Guidance

Based on current visibility levels and an exchange rate assumption of 49.0 Indian Rupees to the US dollar, the Company currently expects 2011 revenue of $635 to $640 million and EPS in the range of $2.65 to $2.73.

Syntel to Host Conference Call

Syntel will discuss its third quarter 2011 results today on a conference call at 10:00 a.m. (EDT). To listen to the call, please dial (877) 837-3915 in the US/Canada or (973) 638-3495 internationally. 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 October 27, 2011 by dialing (855) 859-2056 and entering “18646539”. International callers may dial (404) 537-3406 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. Syntel is ISO 27001 and ISO 9001:2000 certified. As of September 30, 2011, Syntel employed more than 18,000 people worldwide. To learn more, visit us at: www.syntelinc.com.

Safe Harbor Provision

This news release includes forward-looking statements, including those 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 Report on Form 10-K for the year ended December 31, 2010, the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, or from other factors not currently anticipated.

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Contacts:

North America/Europe: Jon Luebke, Syntel, 248/619-3503, jon_luebke@syntelinc.com

AsiaPac: Suruchi Sharma, Syntel, +91 9833691415, suruchi_sharma@syntelinc.com

SYNTEL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT SHARE DATA)

	THREE MONTHS ENDED SEPTEMBER 30,				NINE MONTHS ENDED SEPTEMBER 30,
	2011		2010		2011		2010
Net revenues	$	167,627	$	140,545	$	469,984	$	387,233
Cost of revenues		100,893		84,881		295,653		230,764
Gross profit		66,734		55,664		174,331		156,469
Selling, general and administrative expenses		36,679		24,924		89,083		66,286
Income from operations		30,055		30,740		85,248		90,183
Other income, principally interest		1,632		4,876		13,674		9,118
Income before provision for income taxes		31,687		35,616		98,922		99,301
Income tax expense		5,480		5,177		20,026		15,471
Net income	$	26,207	$	30,439	$	78,896	$	83,830
Dividend per share	$	0.06	$	0.06	$	0.18	$	0.18
EARNINGS PER SHARE:
Basic		0.63	$	0.73	$	1.90	$	2.02
Diluted	$	0.63	$	0.73	$	1.89	$	2.02
Weighted average common shares outstanding:
Basic		41,640		41,537		41,608		41,509
Diluted		41,724		41,618		41,710		41,588

SYNTEL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

	September, 30		December, 31
	2011		2010
ASSETS
Current assets:
Cash and cash equivalents	$	89,172	$	78,505
Short term investments		212,083		208,695
Accounts receivable, net of allowance for doubtful accounts of $2,547 and $3,090 at September 30, 2011 and December 31, 2010, respectively		83,369		75,873
Revenue earned in excess of billings		15,664		5,329
Deferred income taxes and other current assets		56,615		43,705
Total current assets		456,903		412,107
Property and equipment		192,613		171,445
Less accumulated depreciation and amortization		75,282		69,338
Property and equipment, net		117,331		102,107
Goodwill		906		906
Non current Term Deposits with Banks		28		66
Deferred income taxes and other non current assets		29,163		30,931
	$	604,331	$	546,117
LIABILITIES
Current liabilities:
Accrued payroll and related costs	$	40,377	$	40,736
Income taxes payable		6,226		2,291
Accounts payable and other current liabilities		49,378		29,384
Deferred revenue		7,323		9,783
Total current liabilities		103,304		82,194
Other non current liabilities		14,021		12,453
Total liabilities		117,325		94,647
SHAREHOLDERS' EQUITY
Total shareholders' equity		487,006		451,470
Total liabilities and shareholders' equity	$	604,331	$	546,117