Subex Azure Ltd

Subex Azure Ltd on September 14, 2007 announced that the Company has
decided to revise its guidance for FY08. A key customer in North America
has notified the Company the postponement of its near term capex
commitments.

Consequently, some of the contracts that the Company was to book from
this key customer and recognize (either fully or partially) during the
third and fourth quarters of FY08 will be postponed. The revision in
guidance is on the back of this information.

The Company now expects revenue of Rs 5,200 million (US$ 130 million)
and Profit After Tax of Rs 1,040 million (US$ 26 million) from its
products business. The revenue split amongst RMS, BT and FAS BUs will
now be Rs 2,720 million, Rs 880 million and Rs 1,600 million
respectively. The Company has recognized Rs 1,000 million in revenue for
Q1 and the current backlog to be recognized during the balance of FY08
is Rs 2,600 million.

"Given the non-linearity in the products business and that most of our
costs are fixed, any reduction in revenue usually leads to an almost
comparable, in value, reduction of profit," said Subash Menon, Founder
Chairman, Managing Director & CEO of the Company. "However, by adopting
prudent cost management measures, we have ensured that a reduction of Rs
950 million in revenue will result in only Rs 510 million reduction in
PAT, thereby greatly reducing the impact on the overall profitability. "
he said.

The Company has also confirmed that its recently completed acquisition
of Syndesis will be EPS accretive in the very first year of the
transaction i.e. FY08 ending March 31, 2008. Inspite of a 40% dilution
in equity (including pending conversion of FCCBs & warrants), the fully
diluted EPS is set to increase from Rs 19.39 in FY07 to Rs 21.22 in
FY08. Exclusive of FCCB interest, the fully diluted EPS would increase
in FY08 by 26% over last year.

Further, the integration of Syndesis is progressing on track and will be
complete, as originally planned, by January-March 2008. This successful
integration program will help improve EBITDA of the erstwhile Syndesis
business from 5% in FY07 to 22.5% in FY08. Consequently, the products
business will have an EBITDA of 31.5%, up from 22.6% last year. This
expansion of EBITDA is on the back of an organic growth of 43% in the
continuing business.