Sandeep Mahindroo - GeneralManager, Investor Relations S. Gopalakrishnan - ChiefExecutive Officer and Managing Director S. D. Shibulal - Chief OperatingOfficer V. Balakrishnan - Chief FinancialOfficer Amitabh Chaudhry - ChiefExecutive Officer and Managing Director, Infosys BPO

Joseph Foresi - Janney MontgomeryScott Moshe Katri - Cowen and Company Trip Chowdhry - Global EquityResearch Karl Keirstead - Kaufman Brothers Julie Santoriello - MorganStanley Ed Caso - Wachovia Julio Quinteros - Goldman Sachs Andrew Steinerman - Bear Stearns David Grossman - Thomas WeiselPartners Mark Skitovich - Piper Jaffray Abhi Gami - Banc of America

Welcome to the Q3 2007-2008Infosys Technologies Limited Conference call. At this time all participants arein a listen-only mode. Later we will conduct the question-and-answer sessionand instructions will follow at that time. (Operator Instructions). Just toremind you all this call is being recorded. I would now like to hand over totoday's Chairperson, Mr. Sandeep Mahindroo. Please begin the meeting, and Iwill be standing by. Sandeep Mahindroo - General Manger, Investor Relations: Thanks, Pravin. Good morningeveryone, and welcome to this call to discuss Infosys' financial results forthe quarter ending December 31, 2007.I am Sandeep from the Investor Relations team in New York. Joining us today on thisconference call is CEO and MD, Mr. Kris Gopalakrishnan; COO, Mr. S. D. Shibulaland CFO, Mr. V. Balakrishnan, along with other members of the seniormanagement. We will start the proceedingswith a brief statement on the performance of the company for the recently concludedquarter, followed by the outlook for the quarter and year ending March 31, 2008. Subsequently, we willopen up the discussion for Q&A. Before I pass on to management, Iwould like to remind you that anything that we say which refers to our outlookfor the future is a forward-looking statement and must be read in conjunctionwith the risks that the company faces. A full statement and explanation ofthese risks is available with our filings with the SEC, which can be found onwww.sec.gov. I'll now pass it on to Mr. S.Gopalakrishnan. S. Gopalakrishnan - Chief Executive Officer and Managing Director: Thanks Sandeep, and good morning,good afternoon, good evening to everyone wherever you are. Let me also wish youa happy new year. This quarter we saw our revenuescross $3 billion for the nine-month period ended December 31. So, we havecompleted last year's full year revenue in nine months. We also saw that ournet income over the last four quarters has crossed a $1 billion and also last12 months basis, net income is over a $1billion, and Europealso has crossed a $1 billion on a last 12-month basis. We saw significant customeradditions. We saw significant wins, about nine large multi-year, multi-serviceprojects. And then if you look at the various industry verticals, we saw growthin BCM, Banking and Capital Markets, telecom, manufacturing. All our parameters regardingcustomers saw growth in terms of million dollar customers, $10 million, $50million, $100 million. And overall, we've not seen any cancellations ofprojects, slowdown. We have seen rate increases, seven quarters of consistentimprovement in revenue per employee of about on an average 1 percentage point. Thisquarter it was 0.8%. : The only concern or maybe areawhere we are watching is how do the budgets for next year look like. Most ofthe budgets should have been typically completed by now, but we are seeing somecustomers at least delaying it to the end of the month or early part ofFebruary when they will share it with us. So, that's the only data, which we'llhave to wait for -- which we are waiting for. Even where the budgets have beenclosed or completed, on an average we are seeing 6% increase in our IT budgetsfor calendar year 2008 and also continuing to get a higher proportion of thisgrowth. So, that trend continues. So, all-in-all, a good quarterimprovement in operating margin, growth in customers, growth in the variousindustry verticals, growth in various geographies, and a quarter which was asexpected, Q3 and Q4 are slow quarters, and so we had expected this and we'vedone slightly better than what we expected. Now, I am going to pass it on tomy colleague, Shibulal, to talk about more about the industry verticals andthings like that. S. D. Shibulal - Chief Operating Officer: Good morning, this is Shibulal.As Kris said, we have seen strong growth all around. Our top five customershave grown by 19%, top 10 by 16% and top 25 by 9.3% sequentially. Moreimportantly, the BFSI segment has grown ahead of the company average. Also, theTelecom segment has grown ahead of the company average. As far as the demandand revenue is concerned, we are not seeing any change at this point in the ITspending environment as of right now. Most of the clients whom we talkto, continue to be bullish about increasing their offshore IT spend withintheir overall IT budget. This quarter we have signed a multiple, multi-milliondollar, multi-year contract. If I am right, I believe we have signed nine suchcontracts this quarter. Most of them between $50 million to $100 million range. The pricing environment continuesto be stable with an upward bias. Our new clients are coming at around 3% to 4%above company average. Pricing and existing client contracts when renegotiatedfor most part are coming around 2% to 3% above company average. This hasresulted in constant increase in the revenue productivity. As Kris said, therevenue productivity has gone up quarter-on-quarter for the last sevenquarters, almost an average of 1%. This quarter it has moved up by another0.8%. Europe isgrowing ahead of the company average. This quarter it is 28.6% of our revenue.Even in the BFSI segment, we have seen pricing increase with couple of ourclients, when we renegotiated. We have a good pipeline for large deals. At anypoint in time, we track about 12 to 18 deals, and these deals are long-term,long incubation deals. They take anywhere between three to four quarters toclose, and we have a good pipeline. As Kris said, we are seeingdelays in closing of the client budgets in some of our clients, and we expectthem to close in Feb. We would get a clearer picture once all the budgets areclosed. From an expansion perspective --from a geographical expansion perspective, we are investing in Australiaand Japan.Interestingly in Japan,this quarter we signed a deal, infrastructure management deal, a multi-million,multi-year deal. Australiais also a good market for us. And from a vertical perspective, we are investingmore into verticals like Life Sciences, Pharma, Services, which are yieldingresults. From a client perspective, wehave added 47 new clients this quarter, 4 of them are Fortune 500. The numberof million dollar clients have gone up from 295 to 305. Our repeat business is96%. So there is enough potential in our client base to mine the existingrelationships. From a service perspective, wehave added couple of services in the last few months. First one is software andservice. We have a platform from social computing which we are taking tomarket. There is a pipeline and we have closed one deal. Second one is learningservice, which is just out in the market. We have a pipeline but no deals havebeen closed. Overall, we have seen stronggrowth in our existing clients. The demand continues to be robust and thepricing at this point is stable with an upward bias. Thank you very much. And let menow hand it over to Bala. V. Balakrishnan - Chief Financial Officer: Good morning. It's great talkingto you again. We had a great quarter. Our revenues were $1.084 billion. It'sincreased by 6.1% sequentially. Gross margin was at 42%. Operating marginsslightly increased. It was 27.5% last quarter. This quarter it went up to 28.7%. We had three one-off eventsduring this quarter. The first one was the settlement we made in California.We did a one-time voluntary settlement with the statutory authorities there foraround $26 million. That impacted the margin by around 2.4%. This is relatingto the past few years and the wages could be paid to the employees in duecourse. The second one was a reversal ofinsurance costs. We have been providing the books on a gross liability basisand we have reconciled for the last three years. We found some excessprovisions of around $18 million, which we reversed during the quarter. Thatpositively impacted the margin by around 1.7%. Then we had tax reversals, whichrelates to the earlier years where the assessments got over or the statutory limitationperiod got over. That was around $13 million. On the operating margin side,there is a California settlementwhich impacted 2.4% and there was a reversal of insurance of around $18million, which positively impacted 1.7%. There was an impact due to rupeeof around 0.8%, because the rupee appreciated by 1.9% during this quarter, andwe had the benefit of increase in per capita revenue, which offsetted theimpact due to rupee. We had scale benefit coming onthe SG&A side. Last quarter we had the earn-out payment for the partners inInfosys Consulting of around $11 million to $12 million that was not there thisquarter. So the SG&A cost came down. It positively impacted the margin byaround 1.4%. It flow to the operating margin of around 1.2%. We gave a guidance of $0.51. Weended up at $0.54. The $0.02 came because of tax reversal and we have seenupside of $0.01 because of growth in revenues. Our effective tax rate is almostat 15.4%. It was 15.1% last quarter. If we exclude the tax reversal during thequarter, it is at 15.6%. Net-net, we have increased ourguidance slightly for the whole year. For the full year, our revenues areexpected to grow somewhere between 35% and 35.2%, and our EPS is expected togrow by 34%. For the full year, we expect the margins to remain, say, at thesame level. At three months, we are assuming the currency to be at the 39.4%,which is a closing date for December. And we assume that we'll add31,000 employees on a gross basis for the full year. Last quarter, we said 30,000,we increased the guidance by 1,000 more people and we assume the pricing toremain flat at the same level as it was in December for the next three months.So, assuming all this, we believe that the margins could be stable for the fullyear as compared to last year. With this, I conclude mypresentation. We can take the Q&A now.

(Operator Instructions) Our first question comes fromJoseph Foresi. Please announce your company name and location and go ahead. Joseph Foresi - Janney Montgomery Scott: Hi, Joseph Foresi from Boston.I know you guys talked about the budget process taking a little longer. Iwonder if you could give us some color on why any specific reasons that you'rehearing from clients for the delay of committing to the budget. S. Gopalakrishnan - Chief Executive Officer: This is Kris here. Obviously, youknow, there are concerns about the economy. The macroeconomic conditions arethe reasons for the delay. There is another reason also, we are also seeingthat this time around there is lot more involvement from the leadership of thecompany in deciding on the budgets and the plans for the year and things like.Maybe that's another reason why there is some delay. Where the budgets have beenclosed, where we have visibility, et cetera? We are seeing that the proportionof allocation - the budget allocation to offshore continues to be robust andthat's the strategy companies are - even in this period when they look atoptimizing their expenditure.

This is Kris here. Obviously, youknow, there are concerns about the economy. The macroeconomic conditions arethe reasons for the delay. There is another reason also, we are also seeingthat this time around there is lot more involvement from the leadership of thecompany in deciding on the budgets and the plans for the year and things like.Maybe that's another reason why there is some delay. Where the budgets have beenclosed, where we have visibility, et cetera? We are seeing that the proportionof allocation - the budget allocation to offshore continues to be robust andthat's the strategy companies are - even in this period when they look atoptimizing their expenditure. Joseph Foresi - Janney Montgomery Scott: Okay. Thanks. And I was wonderingif you could give us some rough idea maybe what percentage of those budgetprocesses are still open and you're willing to close? I mean, how muchvisibility do you think you have heading into next year? S. Gopalakrishnan - Chief Executive Officer: No, I don't have a percentage,because we only look at some of our customers. We don't look at all of ourcustomers, than we look at being part of the budget, especially the largercustomer. So, it's difficult for me to give you a percentage and things likethat at this point. We also look at other data pointslike industry analysts et cetera. Most of the analysts are at least - whateverreports I have seen project that IT spending will be about 4% to 6% or maybeeven 7%. Last year was estimated to be 8%. So, which still not too much lowerthan last year and that is also a positive data point.

No, I don't have a percentage,because we only look at some of our customers. We don't look at all of ourcustomers, than we look at being part of the budget, especially the largercustomer. So, it's difficult for me to give you a percentage and things likethat at this point. We also look at other data pointslike industry analysts et cetera. Most of the analysts are at least - whateverreports I have seen project that IT spending will be about 4% to 6% or maybeeven 7%. Last year was estimated to be 8%. So, which still not too much lowerthan last year and that is also a positive data point. Joseph Foresi - Janney Montgomery Scott: Okay. And just lastly here, inthe budgets that have closed have you seen a push to increase outsourcing as acost saving method or is there any impetus for other portion? Thanks guys. S. Gopalakrishnan - Chief Executive Officer: Yes. As I said, offshore isgetting a higher allocation in the budgets that are closed. The budgets thatwere closed approximately 6% is increasing IT spending and offshore gets ahigher proportion.

Yes. As I said, offshore isgetting a higher allocation in the budgets that are closed. The budgets thatwere closed approximately 6% is increasing IT spending and offshore gets ahigher proportion. Joseph Foresi - Janney Montgomery Scott: Okay. Thank you.

Our next question comes from MosheKatri. Please announce the company name and location and go ahead. Moshe Katri - Cowen and Company: Thanks. Cowen in New York. Again, not to beat a dead horse here, since weare talking about delays in budgeting and the budget cycle, can you talk to usa bit more about why are you so comfortable with your expectations for theMarch quarter? I think that will be helpful. And then also, can you provide anupdate on what some of your investment banking clients are actually doing inthis environment? S. Gopalakrishnan - Chief Executive Officer and Managing Director: So, we look at data points whichwe have. We have seen increase in banking and capital markets business. Thatbusiness has grown by 8.6%. Overall BFSI space has grown by 7%. The companygrowth was 6.1%. So, it's growing faster than company average. We had new customer additions andnew projects wins in the BCM space. We had rate increases in the BCM space. Wedid not see any cancellations in the BCM space. So these are the data pointswhich gave us comfort in saying that we will be able to meet the Q4 numbers. Now, of course, Q4 is only justone more quarter, and overall for the year when you look at fiscal 2008, thisis the last quarter. And in the beginning itself, we had projected certainrevenue for Q4 and it's gone up slightly, but by and large, it's almost flat.And the reason why we were cautious is because of the budget cycle and thingslike that. So, we have factored all the data points we have, when giving theguidance at this point. Moshe Katri - Cowen and Company: Okay. That's fair enough. Andthen, Bala, can you comment on volume growth, the growth there in the quarter,which seemed a bit weak. And then EBIT margin during the quarter wasexceptionally strong. That was pretty impressive. Can you again go through thelist of the pluses and minuses impacting the margin? V. Balakrishnan - Chief Financial Officer: Well the volume growth was 4.5%.There was price increase of 0.8%, resulting in 6.1% growth in revenues. Thevolume growth has been exceptionally good. When we gave that that guidance inOctober, we factored in the holidays during the quarter. Normally, the thirdand fourth quarters for us are soft quarters, because the number of holidaysand expected plans, budget period in December to conclude the earlier budget. Imean, in January to March, they had to come up with a new budget. So normally,it's a soft quarter. Considering that background, the volume growth has beenextremely good during the current quarter. The operating margin improvementmainly came about because of the scale benefits we got on SG&A. As I saidearlier, last quarter, we had earn-out payment for Infosys Consulting that hasincreased sales and marketing cost. That has come down this quarter, becausethat was a one-off event last quarter. So the scale benefit has slowedthe operating margin. Though we got scale benefit of 1.4%, the improvement inoperating margin was 1.2%. We had a currency impact of 0.8%, which was offsetby the productivity increase of 0.8% we saw during the quarter. We had an impact of 2.4% becauseof the California settlement,which got offset by the reversal we made on insurance of 1.7% of revenues. Sonet-net, the improvement in operating margin is mainly a result of the benefitwe saw on the SG&A due to the scale. Moshe Katri - Cowen and Company: Okay. And then finally, can yougive us an update on where we are in the profitability of some of thesubsidiaries that we spoke about in the past, whether it's China,Australia andNorth America Consulting? Are we close, and maybe you can talk about who isclose to breakeven and who is still kind of losing money? S. Gopalakrishnan - Chief Executive Officer and Managing Director: Well, all the subsidiaries aredoing well. Some of it like Consulting and Chinaare still in the investment phase. Consulting, the losses has been -- is moreor less negligible during the quarter. They are still in the investment phase.They could be making a couple of million dollars of losses in the next two,three quarters. After that they could breakeven. Chinais still in the investment phase, it will take some more time. Because we havesome 690 employees in China,our revenue there is around $5 million a quarter, it will take some more timefor us to breakeven. But the other subsidiaries are doing well. Australiahas done well. They were up 14% net. IBPO has done well. They are growing fast. So Consulting and Chinawill take some more time. They are still in the investment phase. Moshe Katri - Cowen and Company: Thank you.

Our next question comes from TripChowdhry. Please announce the company name and location and go ahead. Trip Chowdhry - Global Equity Research: Definitely. Trip Chowdhry, GlobalEquity Research. A question for Shibu. You did mention that the customers youspoke to had budget increase of 6%. Could you provide some color on it, likewhat specific areas are you seeing the budget increase, and the budget increaseit's more on the ADM side or new projects, and what is driving that? S. D. Shibulal - Chief Operating Officer: See, what is driving is offshore.And depending on the client, the services are different. We're still seeinguptick on infrastructure management. We are seeing uptick on the traditionalapplication, development and maintenance, especially on the maintenance side.And we are seeing uptick on Package Implementation, maintenance of the package. So, it is actually broad. Even weare seeing discretionary spends and development projects. There are somedatacenter consolidations which are going on in a virtualization and thingslike that. So it's a very broad set of offering and services, and it's reallydependent on specific clients. So, it's very broad. Trip Chowdhry - Global Equity Research: And looking at your segments, itseems like banking and financial and telecom did well while the services waslittle weak. Can you provide some color among these various segments? S. Gopalakrishnan - Chief Executive Officer and Managing Director: Yeah. Banking and capital market,Telco, manufacturing all the top industry verticals grew faster than thecompany average. And we got some big deals also in these industries. So that ishelping us. If you look at actually, Shibu talked about it, top 25 clients grew9.3% this quarter. So that's helping us in some of these sectors. And other sectors, for example,retail, in fact retail probably is one sector where before Thanksgiving maybethere was some concern and slowdown was seen, but now it's disappeared. But, ifyou look at the performance this quarter is muted. But overall and I am glad tosay that the top three sectors for us are strong and are showing growth. Trip Chowdhry - Global Equity Research: Thank you

Next question comes from KarlKeirstead. Please announce the company name and location and go ahead please. Karl Keirstead - Kaufman Brothers: Hi, good morning. Karl Keirsteadwith Kaufman Brothers in New York.A question about the revenues you generated from your largest client in theDecember quarter. It went up significantly and was a big contributor to yourrevenue growth. Perhaps you can't name the client, but can you give us a littlebit of color in terms of the industry or the type of project and let us knowwhether there where any one-time revenue boosts from that client that we maynot see in the next few quarters? Thanks. S. Gopalakrishnan - Chief Executive Officer and Managing Director: See, I cannot give you too muchdetail, because this will be specific to a particular customer. We are doingmany, many projects for that customer all the way from consulting toinfrastructure management, BPO. Probably that's one customer which is using allthe services that Infosys provides. And we are also doing some very largeprojects for this customer, transformation projects and things like that. Now,when some of those transformation projects come to an end, you may see adecrease in revenue, but it picks up, because this customer is really focusedon increasing offshore. They do work with multiple Indian service providers notjust Infosys, and they have a fairly large program focused on India.This customer has been growing for many quarters, not just in the last quarter.And that's all I can at this point give you in terms of details of this customer. Karl Keirstead - Kaufman Brothers: Okay. Thanks. And secondly, thisrelease you didn't give any color on the wage increase environment in India.Could add a few comments there? Thank you. V. Balakrishnan - Chief Financial Officer: We believe that the wage increasewill remain at 12% to 15% for next year at this point of time, but we areseeing some very interesting phenomena in India.We are seeing a mega trend of right scaling. That is, companies working out theskill requirements for a particular job and matching skills with a capabilityneeded for the job. For instance, over the last threeyears we've hired 3,000 people who are undergrads and not Engineers using themfor testing, using them for infrastructure management services and part ofproduction support and we are going to isolate the timing. They will have aseparate career path. So, the pool of talent will expand and that will have amoderating influence on wage growth as you go along. And because of right scaling,companies I believe in the next two years will hire people depending upon thekind of talent they need and therefore that will help them to moderate wagesand also go deeper into the talent pool. People like us want to hire topquality talent and the top 20% always, so we'll pay a higher price and we dobelieve that we get a premium pricing from the client and the right strategyfor us. But overall the supply situation is very much better now compared toearlier. Right scaling will moderate wages as they go along and each company decidesits wage policy based upon the segment in which they will hire. So, we thinkthat this is what is going to drive the wage increases in the next couple ofyears. Karl Keirstead - Kaufman Brothers: Terrific. Thank you.

Our next question comes fromJulie Santoriello. Please announce your company and location, go ahead. Julie Santoriello - Morgan Stanley: Thank you, Morgan Stanley in New York. Just wanted to make sure I understand thepotential ramifications of customers pushing out their budgets into February.How do you see customer behavior in that regard? If you have a certain portionof customers who are not pushing through their budgets just yet? Do you haveprojects that are on hold right now? S. Gopalakrishnan - Chief Executive Officer and Managing Director: No, we did not see anycancellations or projects put on hold, that's why we have grown as expected,right. So, we are not seeing anything at this point. Julie Santoriello - Morgan Stanley: Okay. And the employeeutilization, I think there is a down tick there by about a 150 bps. Can youaddress that, was it just seasonality or was there more going on either plannedor unplanned? S. Gopalakrishnan - Chief Executive Officer and Managing Director: Can you just repeat that please,which line item? Julie Santoriello - Morgan Stanley: The employee utilization. S. Gopalakrishnan - Chief Executive Officer and Managing Director: So, the employee utilization camedown from 79.5% to 77.4%. See, the Q2 is the quarter in which we bring in thelargest number of employees. Now, there is a seasonality to the employeesjoining the company, and typically, Q3 and sometimes maybe Q4, the utilizationcomes down slightly. We are very comfortable with theutilization somewhere between 77 and 80, 81, and that's fine. See, in anyquarter, we don't want to optimize all the levers we have in terms of margin.This quarter, for example, the offshore increased, whereas the utilization camedown. And this is the question we have, when it comes to a new quarter and weneed to pull some levers to increase margins and things like that. That givesus the flexibility to manage our business better. We have multiple levers, which wecan use to optimize the business in any quarter and things like. All levers arenot optimized in a quarter and this is an example of a lever, which is notoptimized this quarter. Julie Santoriello - Morgan Stanley: Okay. Thank you very much.

Next question comes from Ed Caso.Please announce your company name and location. Go ahead. Ed Caso - Wachovia: Hi, Ed Caso, Wachovia, UnitedStates. My question is around the BPO business, can you give us a sense or a sizegrowth? What the clients are asking for? Is there a change in mix and so forth? S. Gopalakrishnan - Chief Executive Officer: Ed, good to hear from you. I amgoing to ask my colleague, Amitabh, CEO of BPO to answer that question.

Ed, good to hear from you. I amgoing to ask my colleague, Amitabh, CEO of BPO to answer that question. Amitabh Chaudhry -: Hi, everyone. BPO saw a growth of23% quarter-on-quarter, partly held by the Philips acquisition, the acquisitionof Philips captive centers in Lodz,Chennai and Bangkok. Philipsacquisition gave us a revenue of $8.7 billion this quarter. If we exclude that,the BPO business grew by close to 10% quarter-on-quarter. So this quarter, wehave done $68.6 million of revenue. Our standalone business continuesto maintain the margins at 22%. BPO, the Philips, the part of revenues wereobviously at a loss, because in this quarter we have charged off expensesrelated to the acquisitions, some retention money, which was part of theplanned expense. We have also had some accelerated depreciation, and there hasalso been a charge-off on a write-off of customer contact value. But theoverall loss in Philips about $2.5 million is less than what we have [priced]it for. So from that perspective, it is going well. Integration of the 1,400 peopleis complete. All the entire senior management has joined us, the attritionlevels have remained low, and the execution on the Philips contract is goingwell. If you look at the mix of the business, mix has remained the same, ourvoice business continues to account for about 20% of overall revenues, thelargest verticals are Telecom, High-Tech and Discrete Manufacturing and BCM andin that order. Our pipeline remains quitestrong. We are quite excited about some of the positives we are looking at.After the Philips acquisition, we have more than 5,000 employees in the financeand accounting space, which makes us one of the top five players globally, andwe are already seeing the impact of that in the kind of the deals, we aregetting invited to, the kind of conversations we are having, and obviously itis giving us confidence about the future. With this kind of revenue profile,we are pretty much caught up with all the BPO players in Indiawho were four to five years ahead of us. And obviously, our margins remainmuch, much better than them. So overall, attraction is good, pipeline islooking strong, and the Philips acquisition till date has gone very, very well.Thanks.

Hi, everyone. BPO saw a growth of23% quarter-on-quarter, partly held by the Philips acquisition, the acquisitionof Philips captive centers in Lodz,Chennai and Bangkok. Philipsacquisition gave us a revenue of $8.7 billion this quarter. If we exclude that,the BPO business grew by close to 10% quarter-on-quarter. So this quarter, wehave done $68.6 million of revenue. Our standalone business continuesto maintain the margins at 22%. BPO, the Philips, the part of revenues wereobviously at a loss, because in this quarter we have charged off expensesrelated to the acquisitions, some retention money, which was part of theplanned expense. We have also had some accelerated depreciation, and there hasalso been a charge-off on a write-off of customer contact value. But theoverall loss in Philips about $2.5 million is less than what we have [priced]it for. So from that perspective, it is going well. Integration of the 1,400 peopleis complete. All the entire senior management has joined us, the attritionlevels have remained low, and the execution on the Philips contract is goingwell. If you look at the mix of the business, mix has remained the same, ourvoice business continues to account for about 20% of overall revenues, thelargest verticals are Telecom, High-Tech and Discrete Manufacturing and BCM andin that order. Our pipeline remains quitestrong. We are quite excited about some of the positives we are looking at.After the Philips acquisition, we have more than 5,000 employees in the financeand accounting space, which makes us one of the top five players globally, andwe are already seeing the impact of that in the kind of the deals, we aregetting invited to, the kind of conversations we are having, and obviously itis giving us confidence about the future. With this kind of revenue profile,we are pretty much caught up with all the BPO players in Indiawho were four to five years ahead of us. And obviously, our margins remainmuch, much better than them. So overall, attraction is good, pipeline islooking strong, and the Philips acquisition till date has gone very, very well.Thanks. and Managing Director,Infosys BPO: Hi, everyone. BPO saw a growth of23% quarter-on-quarter, partly held by the Philips acquisition, the acquisitionof Philips captive centers in Lodz,Chennai and Bangkok. Philipsacquisition gave us a revenue of $8.7 billion this quarter. If we exclude that,the BPO business grew by close to 10% quarter-on-quarter. So this quarter, wehave done $68.6 million of revenue. Our standalone business continuesto maintain the margins at 22%. BPO, the Philips, the part of revenues wereobviously at a loss, because in this quarter we have charged off expensesrelated to the acquisitions, some retention money, which was part of theplanned expense. We have also had some accelerated depreciation, and there hasalso been a charge-off on a write-off of customer contact value. But theoverall loss in Philips about $2.5 million is less than what we have [priced]it for. So from that perspective, it is going well. Integration of the 1,400 peopleis complete. All the entire senior management has joined us, the attritionlevels have remained low, and the execution on the Philips contract is goingwell. If you look at the mix of the business, mix has remained the same, ourvoice business continues to account for about 20% of overall revenues, thelargest verticals are Telecom, High-Tech and Discrete Manufacturing and BCM andin that order. Our pipeline remains quitestrong. We are quite excited about some of the positives we are looking at.After the Philips acquisition, we have more than 5,000 employees in the financeand accounting space, which makes us one of the top five players globally, andwe are already seeing the impact of that in the kind of the deals, we aregetting invited to, the kind of conversations we are having, and obviously itis giving us confidence about the future. With this kind of revenue profile,we are pretty much caught up with all the BPO players in Indiawho were four to five years ahead of us. And obviously, our margins remainmuch, much better than them. So overall, attraction is good, pipeline islooking strong, and the Philips acquisition till date has gone very, very well.Thanks. Ed Caso - Wachovia: Thanks. Here's the last question.Any concern from clients and this is sort of an industry-wide question about quality,particularly as you move towards right scaling, and maybe there is a littleless sort of overstaffing from a quality perspective. I mean are you gettingany concerns from all your clients about quality? S. D. Shibulal - Chief Operating Officer: This question is for BPO or thisquestion is for --? Ed Caso - Wachovia: I'm sorry, just generally. S. D. Shibulal - Chief Operating Officer: Ed, there is no concern from theclients because we've done a very good mapping. For example, in the testingarea the work is very repetitive and the quality is of extremely high order. Ininfrastructure management services, the work is repetitive and quality is veryhigh. We met all SLAs. In part of the productionsupport, we find that the same situation is coming. We are not seeing anychallenges, but remember the numbers are small. Out of 31,000 people that we'regoing to hire this year, about 9,000 are for the BPO and 22,000 is for theservices. Out of 22,000, we probably will hire about 2,000 people from thisprofile. So the numbers are small and the numbers are very specific. So thereare no quality issues. Ed Caso - Wachovia: Thank you.

Our next question is from JulioQuinteros. Please announce the company name and location and go ahead. Julio Quinteros - Goldman Sachs: Goldman Sachs, Services of California.Real quickly, Bala, can you just walk us through kind of a slowdown scenario, Iguess? If you were to sort of look back at the dotcom day sort of meltdown andlook at the potential for a recession in the United States going forward, what levers would youhave left if revenue growth materially decelerated from here? And maybe, inorder of priority, what would be the top two or three things that you would beable to do to preserve margins in a slowing scenario? V. Balakrishnan - Chief Financial Officer: Well, if you look at whathappened in 2001, 2001 when there was a sharp slowdown, it impacted both ourbilling rates and our volume growth. That time the billing rates were at anunrealistic level because we had a dotcom boom between 2001 and 2002. Theprices went up by something around 25%. Those unrealistic prices got correctedand the economy went to a downturn. I think we are today at a muchreasonable pricing level. Only in the last six quarters, we were seeing thatbillings rates going up. So the pricing levels are at a much more reasonablelevel today. So the sharp deceleration we saw after 2001 is slightlyunrealistic now. Number two, the volume growthcould come down. But in 2001 offshore was not a mega trend. Most of thecustomers were not looking at offshore as a top priority. But today, offshoreis a mega trend. That is the only trend in the whole industry. If you talk toany CFO, they are very clear about the benefit that offshore brings in. So I think to that extent theability of customers to improve the offshore spending within the overall ITspending is very high, and it could happen very quickly than what happened in2001. That's why we keep saying that even if there is a downturn in the U.S.,the offshore IT spending could go up within the overall IT spending. On the cost side, we have built amuch more flexible cost structure today. We are getting the scale benefits. Weare leveraging offshore for all our support work. We are sitting tight on thecosts. We have several levers on the cost side like the utilization rate, theon-site offshore mix, and we are moving up the value chain. Today, more than 50% of ourrevenue comes from new services, which we started in the recent past. And wealso have the utilization rate, and our wages also, we made it more variable.[13%] of offshore wages is variable, linked to company's performance in termsof top line and bottom line. So, over the years we had madeour cost structure much more variable, and that will help us to reduce theimpact on margin, even if there is a downturn. Of course, there are issues likecurrency, which is excellent to us, which we can't do much. As long as -- mostgradually we can manage some of it, but if there is a sharp movement it willhit us. Excluding currency, we had created a flexible cost structure, whichwill allow us to reduce the impact on margins even if there is a downturn. Julio Quinteros - Goldman Sachs: Got it, that's very helpful. Andjust on the one point, I know that there was a one-time hit to the SG&Alast quarter with payout for the ICI for the consulting part, but even if youlook at the number sort of in aggregate the level on a percentage of revenuebasis for SG&A is at really, really low levels. Is that just a variabilitycomponent sort of kicking in, because the revenue growth or the magnitude ofthe upside for revenue growth just didn't materialize this quarter? Is that theway to think about why that dropped by so much other than the one-time paymentnot being there? V. Balakrishnan - Chief Financial Officer: No, if you look at our cost, ourG&A is normally around the 8%, and F&M is somewhere between 6% and 7%and that trend is there for sometime. And this quarter, one, because theearn-out was not there, which was there last quarter and number two, we got acredit for the insurance, which I spoke earlier, that is allocation betweendirect cost and the G&A cost, that also played a role. But, on a steadystate basis G&A could be somewhere around the 8%, we could get some scalebenefit there, and F&M could be somewhere between 6% to 7%. Julio Quinteros - Goldman Sachs: Okay, got it. And then justfinally, when we look at the pace of growth in North America from the beginningof the year to the end of the year, obviously a deceleration from about 38%growth to 30% growth on a year-over-year basis. Can you talk a little bit aboutwhat factors are driving that? Is that just sort of a shift in emphasis from North America to Europe or are you seeingsomething else that is sort weighed the performance of the North American growth? S. Gopalakrishnan - Chief Executive Officer and Managing Director: So, Europehas grown, if you look at year-to-date. Europe has grown43%, whereas North America has grown 33.8%. So,obviously, we are shifting the growth away from North Americato other geographies. Rest of the world grew 37.5%, Europe43%. This is a proactive strategy. For sometime we have been trying to grownon-U.S revenues. So, we are investing in newer geographies as part of this[reorg] also India, China, we will be setting up sales and marketing for Southand Latin America, Middle East. We want to grow Australia.So, definitely, you will see as a percentage, in absolute terms all thesegeographies are growing, as a percentage North Americais coming down. Julio Quinteros - Goldman Sachs: Okay, great. Thank you.

Next question comes from AndrewSteinerman. Please announce the company and location and go ahead. Andrew Steinerman - Bear Stearns: Hi it's Andrew Steinerman, BearStearns. In the press release you used the line in the midst of your comments.You have concluded several multi-million dollar deals, meaning programs, workfor clients during the quarter. Was this expected kind of program ends, wouldsay that it was a natural number of program ends of kind of multi-milliondollar projects and do you expect and how do you expect sort of the balance forthe fourth quarter between multi-million dollar projects starts versusmulti-million dollar project ends? S. Gopalakrishnan, Chief Executive Officer and Managing Director: I don't have the data on numberof projects, large programs which ended in Q3, so, I can't immediately answerthat. But if you look at our pipeline today for large deals, we have about 15,16 deals we're still pursuing and that's the number we look at, these areprograms which are in our case $50 million to $100 million and above. So that's the kind of programs weare going after. And that pipeline has been growing slowly and we track that.The nine deals which we talk about are in the range of about $30 million plusmulti-year, multi-services deals, and these are the ones which are fromexisting clients as well as new clients and are not just new clients. Itsexisting and new clients and these are some of the things, which we have beenpursuing for maybe some times three months, six months etcetera. And this trendwe just highlighted so that people can see that we have had wins in Q3 also inspite of the concern of slow down and things like that. Andrew Steinerman - Bear Stearns: Right, and I think that sort ofaddresses half the question well. The fact that you highlighted, concludedseveral multi-million dollar programs in the quarter, did you know three monthsago that those would conclude in December quarter, and is there an unusualnumber of program ends in the March quarter to be expected? S. Gopalakrishnan, Chief Executive Officer and Managing Director: No, we do not know exactly when aprogram will close, because that depends on the customer. It's very difficultfor us to say precisely on which month it will close and things like. We havesome indication, the client would give an indication saying that we want toclose on particular month and start, but sometimes they slip and things likethat. From the March quarter, thereisn't any unusual change or anything like that from previous quarter in termsof number of project closures and things like that. See 96% of our business isrepeat business, and even though our contracts are long term projects, the workorders are for the project duration. These are ongoing things, we occasionallysee a client coming down and then pick up later, there are some seasonality andthings like that, but by and large, its 96% repeat business. We have a comfortable trackrecord in terms of growing accounts and handling long term relationships andthings like that. There is nothing special about project closures in Q4, we cansee at this point. Andrew Steinerman - Bear Stearns: Thank you for spending so muchtime with my question.

Next question comes from DavidGrossman, please announce company name and location go ahead. David Grossman - Thomas Weisel Partners: Hi, Thomas Weisel Partners in San Francisco. Kris on one hand, I hear you saying you arepretty comfortable with the current kind of environment and you are prettycomfortable with your kind of business, kind of prospects. When I look at thevolume growth over the fiscal year, it's being decelerating each quarter on ayear-over-year basis. So can you help reconcile your point of view with what lookslike, at least, decelerating volume growths on a year-over-year basisthroughout the year? S. Gopalakrishnan - Chief Executive Officer and Managing Director: David, good to hear from you.Normally Q3 and Q4 are slower quarters for us. Q3 is slower because of reducednumber of working days. Q4, typically, we are cautious because if the budgetgets delayed, et cetera, we may see some slow growth and things like that. Sonormally, we are cautious about Q3 and Q4. And it is not unexpected. We hadexpected this, and we had guided for 30% growth at the beginning of the year.We are ending with 35% growth. Our guidance is 35% to 35.2% for the year. So,in that sense, this is something which we had projected and things like that,nothing different from what we have projected. David Grossman - Thomas Weisel Partners: Right. So I guess I'm looking atthe volume growth on a year-over-year and not on a sequential basis. And arethere fewer workdays in the second, third and fourth quarter this year thanthere were last year? I guess, again, I'm just looking at the volume growthyear-over-year and it just appears that it's been decelerating throughout theyear? S. Gopalakrishnan - Chief Executive Officer and Managing Director: I am just looking at Q3 in '06,Q3 in '07 and Q3 in '08, 6.7% sequential growth in '06, 10.1% last year and6.1% this year. So, it's kind of mirroring '06 actually this time. David Grossman - Thomas Weisel Partners: Okay. We can perhaps pursue thatoffline. I guess moving on to just the subsidiaries in terms of the profitably,it looks like consulting went positive or breakeven, and I assume that had todo with this one-time payment last quarter. Was there anything else, some ofthe other subs kind of bounced around a little bit? Is there anything otherthan typical kind of lots of small numbers or just seasonality that impactedthe profitability of the subs during the quarter? V. Balakrishnan - Chief Financial Officer: David, Bala here. I think othersubsidiaries are doing well. IBPO, the margin has been flat. Margin has comedown this quarter mainly because we had a Phillips acquisition that would takethe costs. Infosys Australiais still doing well. Their net margin is close to 14%, 15%. Consulting and Chinahas done well this quarter. Consulting, the impact on the overall profit isvery less. They never made a profit nor a loss. Chinamade a small loss of $400,000. So, overall Consulting and Chinahas pulled up and they had done well. Both were in the investment phase.Consulting could be making losses for a couple of quarters before they becomebreakeven. Chinawill take some more time. They are still in the investment phase. Mexicosubsidiary is making a loss. They made a loss of $1 million this quarter. Sothis is the second quarter of the operation. They will take some more time tobreakeven. Otherwise, rest of the subsidiaries are doing well. David Grossman - Thomas Weisel Partners: Okay. And then, just looking atthe verticals, it looks like the insurance vertical weakened a bit during thequarter again. Is that just time and place, client specific or is theresomething else specific to the insurance industry? S. Gopalakrishnan - Chief Executive Officer and Managing Director: Yes, it's just one-off, David. Infact, one of the big deals we won is in the insurance sector, and that shouldpick up the growth going forward. David Grossman - Thomas Weisel Partners: Okay. And just one last thing, ifyou think about where you are today versus prior years, is your visibility intonext year at this point in time from your perspective any different now than ithas been in prior years? S. Gopalakrishnan - Chief Executive Officer and Managing Director: Yeah. There is no change exceptfor - typically, we would have got the visibility of the budget early Jan. Now,we see that it will come completely by end of Jan, first week of February.Other than that there is no change. And having said that, from the discussionswe are having with our clients et cetera there is no change. And in fact, theyare saying offshore should continue to see disproportionate growth and thingslike that. So, in that sense there is no change. David Grossman - Thomas Weisel Partners: I see. Great. Thanks very much.

Next question comes from MarkMarostica. Please announce company name and location and go ahead. Mark Skitovich - Piper Jaffray: Hi, it's actually Mark [Skitovich],Piper Jaffray, Minneapolis, Minnesota.I was just curious, maybe one last budget question. Curious what concentrationof your client base has indicated flat to down '08 budgets and how will thatcompare to those indicating the up 6% that you mentioned? S. Gopalakrishnan - Chief Executive Officer and Managing Director: It's a broad comment rather thanany particular sector. We only look at some of the larger customers closely andtrack their budgets and things like that. And we have about $305 millionrelationships. All those budgets we don't track. When it comes to $10 millionand above or closer to $50 million, we start tracking their budgets and gettingvisibility of their budgets and things like that. And so, this commentary isbased on that, and that is across multiple industry verticals, not restrictedto any particular industry vertical. Mark Skitovich - Piper Jaffray: Okay. And just curious, can yougive me a rough mix of your headcount within the testing and infrastructuremanagement and then what was your lateral hire mix overall in the quarter? S. Gopalakrishnan - Chief Executive Officer and Managing Director: The lateral hires this quarterwere about --. S. D. Shibulal - Chief Operating Officer: 2,200. S. Gopalakrishnan - Chief Executive Officer and Managing Director: It was 2,200. Now, the number ofpeople in testing, I don't have the data of number of people in testing. We cansend you figures. You please send us an email. We can send you the data ofpeople in testing and things like that. BPO is about 16,000 people. That isseparate, because it's a separate business line for us and things like that.But testing, I don't have the number with me at this point. Mark Skitovich - Piper Jaffray: Okay, great and just one finalquestion. I think your Chinaheadcount is still around 700. Is that correct? S. Gopalakrishnan - Chief Executive Officer and Managing Director: Yes, it is correct. Mark Skitovich - Piper Jaffray: Okay. And where do you see that ayear from now? And if also, you could comment on your current headcount inCentral and South America, sort of what that's growingyear-over-year and then what your expectations are there for next year as well? S. Gopalakrishnan - Chief Executive Officer and Managing Director: Chinais growing. We plan to recruit. We are looking at about 200 more people to beadded now, and then as the business picks up, we will keep adding. But rightnow the plans are to add another 200 people to China.In Mexico itjust started, it's in fact the fourth month of operation and we have about 50people in Mexico.Again, we will wait for the business to pick up rather than recruit significantlyahead of business. Since the numbers are small, weare confident that we can recruit from the market, so we are not making largeplans from campuses and things like that. It's not along the same lines as in India.For example in India,18,000 offers have been made at the campuses already and these people will bejoining from July through October next year. But, we don't have to make thatkind of plan, those kinds of advanced plans for Mexicoor China yet atthis point. Mark Skitovich - Piper Jaffray: Okay. And in South America,just reminding me of your headcount there and where you see that next year? S. Gopalakrishnan - Chief Executive Officer and Managing Director: It's about 50 people, and as Isaid as business picks up we will start hiring there. Right now it's about 50people. Mark Skitovich - Piper Jaffray: There as well. Okay. Great, thankyou.

Our next question comes from AbhiGami. Please go ahead with your questions, announcing your company name andlocation. Abhi Gami - Banc of America: Great. Thank you. Banc of America,New York. In this environmentit's reasonable to think that clients are going to come back looking forpricing concessions. Are you seeing an increased level of interest indiscounting or more accretive pricing, and in these situations, how are youhandling those requests? S. Gopalakrishnan - Chief Executive Officer and Managing Director: There are not many cases of anydiscount across the board or anything like that. Based on volumes there aresome discounts which are there in the contract or sometimes when the contractcomes for renewal. Because they are promising higher volume etcetera, someclients have asked for further discounts. So the discount is separate fromrates, rates typically we are able to get about 2% to 3% higher on contractsrenewals. Sometimes additional clauses for discounts get added on account ofhigher volumes and things like that. Abhi Gami - Banc of America: So just to be clear, you are notseeing clients comeback looking for just straight rate cut or straight ratediscounting? S. Gopalakrishnan - Chief Executive Officer and Managing Director: Not across the broad and thingslike that. There may be one or two instances, but it's not across all thecustomers, and its impact is limited. Abhi Gami - Banc of America: Okay. Also going back little bitto the commentary regarding the budgets. What was the average IT budgetincrease this time last year based on your survey of your clients, and also howmany clients have you already heard back from? S. Gopalakrishnan - Chief Executive Officer and Managing Director: Last year it was about 8%, thisyear right now we are seeing 6% increase in IT budget from our survey andthings like that. And we also do a survey to look at their attitude towardsoffshore or where the offshore should go, and we have seen increased proportionof revenues coming to offshore. Now I don't have a breakup of the percentage ofcustomers with whom we have budget visibility and things like that, because weonly look at the top few customers when it comes to budgets. You know $50million and above, sometimes it maybe $30 million and above and things likethat. Below that, the numbers are sohigh that we don't go after them to give us a share of the budget. And fromthat number, I don't have the percentage -- who have given us budgets andthings, in fact almost all customers share at some point budgets and thingslike that, but I don't have the breakup right now. Abhi Gami - Banc of America: Okay. I just wanted to get asense of whether the data you have received back so far from those largeclients is good enough for you to be able to get visibility into your next 12months, or do you still require the remaining large customers to come back andgive you the information before you can get comfortable internally with theforward trend? S. Gopalakrishnan - Chief Executive Officer and Managing Director: Fortunately for me, the fullfiscal year guidance we will only be giving it in April. So we can get thisdata and then be better prepared in April to give you full year guidance. So,we can wait for that data at this point. Let me thank you all. We have runout of time. I know that many of your questions have not been answered or someof you did not get a chance to ask a question. If you can contact our InvestorRelationship Manager, Sandeep Mahindroo or Shekar Narayanan, or send us anemail, we will definitely respond to you or, if needed, we can set up a call todiscuss these with you. We thank you for taking time toparticipate in this call and looking forward to talking to you or meeting youduring the quarter or at the beginning of next fiscal. Thank you, again.