Intelligroup Reports Second Quarter Financial Results

Edison, NJ (July 26, 2007): Intelligroup Inc., a consulting, business optimization, and outsourcing firm serving global corporations, today reported results for its second quarter and six-month period ended June 30, 2007.

Second Quarter Highlights:

Revenue growth: Revenue grew 10% from first quarter to second quarter of 2007 and grew 14% from the second quarter of 2006. Gross Margin: Gross margin improved by 9 percentage points from first quarter to second quarter of 2007; gross margin declined by 1 percentage point from second quarter of 2006 to second quarter of 2007. Operating Margin: Operating Margin improved by 12 percentage points from first quarter to second quarter of 2007 and was comparable to the results from the second quarter of 2006. Utilization rates: Utilization rates increased to 70% in the second quarter of 2007 from 69% for the first quarter of 2007 and the second quarter of 2006. New Customers: Added 27 new customers globally in the second quarter of 2007.

The Company reported second quarter 2007 revenues of $36.0 million, which marks a 10% increase from $32.7 million in the first quarter of 2007 and a 14% increase from $31.6 million in the second quarter of 2006. The Company’s average bill rates were relatively flat in the second quarter of 2007 as compared with the first quarter of 2007 and the second quarter of 2006. The Company reported gross margin of 28.9% for the second quarter of 2007, which marks a decrease from 30.1% for the second quarter of 2006 but an increase from 19.8% for the first quarter of 2007. The Company reported operating income from continuing operations of $984,000, which marks an improvement in operating performance of $4.0 million from an operating loss of $3.0 million in the first quarter of 2007 and an improvement of $391,000 from operating income of $593,000 in the second quarter of 2006.

ABOUT INTELLIGROUP
Intelligroup is a vertically-led ERP focused life cycle management partner serving global corporations as well as public sector clients. Its proven Global delivery model has enabled 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 U.S. school systems and global corporations including GE, Hershey, Abbott Labs, Eastman Chemical, Hitachi, and Kimball International.

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.

Intelligroup and the Intelligroup logo are registered trademarks and ‘Creating the Intelligent Enterprise’, 4Sight, 4Sight Plus, ASPPlus, myADVISOR, ASPPlus Power Upgrade Services and Uptimizer are service marks of Intelligroup in the U.S. and other countries. All other trademarks and company names mentioned are the property of their respective owners.

INTELLIGROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands except par value)

Assets June 30, 2007 December 31, 2006   Unaudited   CURRENT ASSETS     Cash and cash equivalents $7,508 $12,277 Short-term investments -- 2,227 Accounts receivable, less allowance for doubtful accounts of $1,073 and $991 at June 30, 2007 and December 31, 2006, respectively 21,920 20,477 Unbilled services, less allowance for doubtful accounts of $891 at June 30, 2007 and December 31, 2006 9,978 9,464 Prepaid expenses 1,060 957 Prepaid taxes 368 170 Other current assets 1,846 1,296 Total current assets 42,681 46,868 Property and equipment, net 5,683 5,472 Deferred taxes and other assets 4,012 2,203 Total assets $52,375 $54,543 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES     Line of credit borrowings $3,367 $4,959 Accounts payable 3,926 3,078 Accrued payroll and related taxes 10,325 11,301 Accrued expenses and other current liabilities 4,589 4,695 Deferred revenue 1,697 2,294 Income taxes payable -- -- Current portion of obligations under capital lease 483 483 Total current liabilities 24,386 26,810 Obligations under capital lease, net of current portion 504 552 Deferred revenue, net of current portion 1232 686 Other long-term liabilities 103 101 Total liabilities $26,225 $28,149 Commitments and contingencies Shareholders' Equity     Preferred stock, $.01 par value, 5,000 shares authorized, none issued or outstanding -- -- Common stock, $.01 par value, 50,000 shares authorized, 42,016 and 41,933 shares issued and outstanding at June 30, 2007 and December 31, 2006 respectively 420 419 Additional paid-in capital 70,406 69,702 Accumulated deficit (46,703) (43,753) Accumulated other comprehensive Income 2027 26 Total shareholders' equity 26,150 26,394 Total liabilities and shareholders' equity $52,375 $54,543

INTELLIGROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (in thousands except per share data)

SIX MONTHS ENDED June 30 THREE MONTHS ENDED June 30   2007 2006 2007 2006 Revenue $68,736 60,746 36,035 31,575 Cost of revenue 51,872 43,313 25,632 22,066 Gross profit 16,864 17,433 10,403 9,509 Selling, general and administrative expenses 17,690 17,493 8,779 8,344 Depreciation and amortization 1,239 1,151 640 572 Total operating expenses 18,929 18,644 9,419 8,916 Operating Income/(loss) (2,065) (1,211) 984 593 Interest expense, net (375) (179) (183) (73) Other income (expense) (61) 1,308 (124) 1,331 Income/(Loss) before income tax provision (2,501) (82) 678 1,851 Provision for income taxes 449 1,070 (165) 1,028 Net Income/(loss) $(2,950) $(1,152) $844 $823   -4% -2%     Income/(loss) per share:         Basic net income/(loss) per share $(0.07) $(0.03) $0.02 $0.02 Weighted average number of common shares outstanding - basic 41,943 38,473 41,953 41,770 Diluted net incom/(loss) per share $(0.07) $(0.03) $0.02 $0.02 Weighted average number of common shares outstanding - diluted 41,943 38,473 41,978 41,838 Comprehensive income/ (loss):         Net Income/(loss) $(2,950) $(1,152) $844 $823 Other comprehensive income - currency translation adjustments 2,001 (796) 1,614 (1,016) Comprehensive income/ (loss) $(949) $(1,948) $2,458 $(193)