Kale Consultants Ltd - Investors

Kale poised for growth: Revenue up 27% & PBT up 90% in F06

Mumbai, April 25, 2006 - Kale Consultants Limited (Kale), the leading provider of software solutions and outsourced services to the Travel & Transportation industry, has recorded revenues of Rs. 179.18 million for the quarter ended March 31, 2006 as compared to Rs. 154.99 million for the corresponding quarter of the previous year, a growth of 15.61 %.

The company recorded PBIDT of Rs. 70.07 million for this quarter as compared to Rs. 47.90 million for the corresponding quarter of the previous year, a substantial growth of 46.28%

For the year ended March 31, 2006, Kale has recorded operating revenues of Rs. 625.84 million as compared to Rs. 492.92 million during the previous year, a growth of 26.97%. Operating profit has grown by 89.60% to Rs. 69.62 million from Rs. 36.72 million during the previous year.

Commenting on the performance, Mr. Vipul Jain, CEO & Managing Director said, "Kale is at inflection point and is well poised for growth. Today the company has an order book of over Rs.3,600 million to be completed over the next 4-5 years. With a team of high performers and dedicated people we have built innovative solutions enabling us to meet the increasingly complex demands of our customers."

Highlights for the Quarter & Year ended March 31, 2006

Total Income

Profit Before Tax

Profit After Tax

	REVERAT, Kale's Revenue Accounting solution, has once again proved itself to be one of the world's most powerful Passenger Revenue Accounting solutions. Bangkok Airways has signed a five-year contract with Kale for REVERAT. The solution has been successfully implemented at Bangkok Airways and the airline has commenced production

	Cebu Pacific Airways, 'on time, great value" airline from Philippines has signed a five-year contract with Kale for REVERAT. The airlines commenced production from January 06

	Kale MPST has added several new services like secondary interline audit, passenger sales audit and RBD audit services. The company has introduced a new service- Cargo Revenue Recovery and Protection Service and successfully commissioned it for one of the largest Asian Carriers. This opens up another avenue for Kale to deliver bottom line value to the airline community

	Icelandair signed a three-year contract for Revenue Recovery & Protection Services (RRPS) which will be provided through Kale MPST

	Travel Technology Solutions undertook several new projects thereby increasing Kale's share of wallet of customers. New projects included projects with BCD Travel, like Netprofile integration with Sabre GetThere and Netprofile version 2.0 were also added. The pipeline for travel vertical also looks very strong and healthy
	Kale's NFP service recorded productivity as high as 95% owing to enhancements in APEXT, NFP engine from Kale

	Kale MPST continues to forge ahead with 4 new customers being added in this year

	British Midland Airways, UK's second largest carrier has signed a contract with Kale for the implementation of Revenue Accounting Solutions. Kale has initiated preparatory work for the execution of the order and expects a positive impact of this order on the revenue and profitability this fiscal

	Air Mauritius signed a five-year contract with Kale and went live with iDEALST, the Online Deal Management System developed by Kale

	Three airlines have selected Kale for NFP and are in the process of implementation

	Indian Airlines, one of the largest regional airlines in Asia signed a five year contract with the company for CSPT- the Enterprise-Wide Cargo Solution. This contract is for the complete suite of CSPT solutions, provided on a hosted basis across 63 domestic and international stations of the airline. The implementation is expected to be completed in a few months
	Asiana Airlines, one of the top 20 cargo airlines globally, and a CSPT user since December 2003, has reinstated its faith in the solution by renewing its contract with Kale.
	Kale is also proud to announce its selection as an Industry Associate of Cargo 2000, an IATA Interest Group. As a result, our cargo products will now be aligned with the strict requirements of Cargo 2000
	Simplify the Business (StB)" is worldwide strategic initiative driven by IATA. Kale is the only Indian company to be selected for this coveted partnership. This will position Kale as a key facilitator for the airlines, in their efforts to implement the StB projects initiated by IATA.
	Travel Technology Solutions group continues to surge ahead. The head count and infrastructure is seeing a ramp up following extension of long term, multi-year contracts from existing customers. Solutions developed solutions for ZUJI, a prominent online travel player in South East Asia and Australia has gone live. Kale has renewed the contract with Lastminute.com, one of the leading online travel & leisure company
	The company added over 150 people during the year, taking the total strength to 790 people

Future Outlook

The Travel and Transport industry is returning to a more normal growth pattern after the shocks that began in 2001. As per figures released by IATA, international passenger traffic grew by 7.6% in 2005 while international freight traffic increased by 3.2%.

Oil remains the single biggest challenge for airline profitability. Strong demand gives little hope of reduced prices this year. As such, cost reduction remains critical. All industry partners and stakeholders will have to sustain their focus on fuel efficiency and attack costs.

There is a new optimism emerging in the industry. Improved economic prospects in Europe and Asia combined with an improving situation in the US will lead to reduced losses in 2006 and strengthened profitability in 2007. While the trend is positive, we are nowhere near sustainability. The theme for the airline industry as very well articulated by IATA is to "simplify the business" and thereby reduce costs and gain operational flexibility.

Kale's solutions help customers achieve precisely these goals - the revenue accounting portfolio helps airlines to reduce back office processing costs and prevent revenue losses. They provide customers with better and actionable business intelligence and thereby respond to the market dynamics with speed and
precision. The cargo solution suite delivers end-to-end process management capability to enable the business to increase cargo yields, enhance customer service and reduce transaction processing costs and delays.

Research data also indicates that there are about 19 business processes, which airlines could outsource to a third party vendor to offshore locations like India. Also, out of the total savings that airlines can get by outsourcing those processes, processes that Kale currently outsource contribute to approximately 9%. This means that Kale has an opportunity to tap remaining 91% of the airlines savings potential through business process outsourcing.

Kale's Managed Process Services enables customers to outsource their business process and focus on their strategic business drivers. Going forward, Kale will expand its offerings through Kale MPST.

The growth of internet travel sales has been phenomenal - in 2005 an estimated US $113 billion worth of travel products were bought on-line. In the US an estimated 65% of airline domestic sales are done online. In Europe, the number is currently 30% but there is no doubt that the numbers will grow. Asia and India are not far behind. The Travel industry is undergoing fundamental changes. In the next five to ten years, there will be a churn in the players and a radical transformation of the industry structure and roles. There is a huge opportunity as never before as the opening up of the civil aviation sector and the growth of the economy create ripple effects. Kale expects to leverage on this opportunity.

Thus each of Kale's solutions delivers sustained value propositions to customers and are gaining increased acceptance in the industry. The management believes that a combination of its business model, potential market size, industry trends and imperatives and the company's own performance augurs well for sustained growth and improved profitability.

Kale Consultants Ltd is committed to create long-term sustainable shareholder value through successful implementation of its growth plans. The company's investor relations mission is to maintain an ongoing awareness of its performance among shareholders and financial community.

For additional information, please contact:

Mr. Sumeet Nadkar
Chief Financial Officer
Kale Consultants Ltd.
Tel: 91-22-28259580
Email: Sumeet_Nadkar@kaleconsultants.com

Mr. Parag Someshwar / Mr. Manoj Bagadia
Equicorp.
Tel: 91-22-25121528
Email: equicorp@vsnl.net

Certain statements in this release concerning our future growth prospects are forward-looking statements which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. The company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the company.