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The Company reported third quarter 2006 revenues of $32.5 million, which marks a 3% increase from $31.5 million in the second quarter of 2006 and a 9% increase from $29.7 million in the third quarter of 2005. The Company's average bill rates were relatively flat in the third quarter of 2006 as compared with the second quarter of 2006 and the third quarter of 2005. The Company reported gross margin of 28.6% for the third quarter of 2006, which marks a decrease from 30.1% for the second quarter of 2006 but an increase from 23.3% for the third quarter of 2005. In spite of the improved utilization, gross margin declined from the second quarter to the third quarter primarily due to compensation increases that took effect in the third quarter. The Company reported operating income from continuing operations of $545,000, which marks a decrease of $48,000 from the operating income of $593,000 in second quarter of 2006 but an improvement of $4.3 million from an operating loss of $3.7 million in the third quarter of 2005.
"The third quarter results were driven by the Company's focus on growing revenue while tightly managing utilization rates and sales, general and administrative costs" stated Vikram Gulati, the Company's Chief Executive Officer and President. "Such efforts have resulted in an improvement of $4.3 million in our operating performance from the third quarter of 2005 and a $4.6 million improvement in operating performance for year to date 2006 compared with 2005."

About Intelligroup
Intelligroup is a vertically led, Enterprise Resource Planning (ERP) focused, Life-Cycle partner serving global corporations as well as public sector clients. Its proven delivery model has enabled hundreds of customers to accelerate results and reduce costs significantly. With deep expertise in industry-specific enterprise solutions, Intelligroup has earned a reputation for consistently exceeding client expectations. Intelligroup develops, implements, and supports IT solutions for some of the largest global corporations including GE, Hershey, Abbott Labs, Eastman Chemical, Hitachi, and Kimball International. Website:www.intelligroup.com

Safe Harbor Statement Certain statements contained herein, including statements regarding the development of services and markets and future demand for services and other statements regarding matters that are not historical facts, are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995).
Such forward-looking statements include risks and uncertainties; consequently, actual results may differ materially from those expressed or implied thereby. Factors that could cause actual results to differ materially include, but are not limited to, variability of quarterly operating results, continued uncertainty of the IT market and revenues derived from application management business, uncertainty in revenues for traditional professional services offerings, loss of one or more significant customers, reliance on large projects, concentration of revenue, unanticipated costs associated with continued litigation, ability to attract and retain professional staff, dependence on key personnel, ability to manage growth effectively, risks associated with strategic partnerships, various project-associated risks, including termination with short notice, substantial competition, general economic conditions, risks associated with intellectual property rights, risks associated with international operations and other risk factors detailed under the caption "Risk Factors" in Intelligroup's annual report on Form 10-K for the period ended December 31, 2005. Intelligroup disclaims any intention or obligation to update forward looking statements as a result of developments occurring after the date of this press release.