UPDATE 2-Syntel Q3 results beat Street, ups FY09 profit view

* Q3 EPS of 73 cents beat estimates by 14 cents

* Q3 revenue beats Street

* Raises FY 2009 EPS view to $2.60-$2.65 (Adds conference call details, analyst comments, updates share movement)

By Shrutika Verma

BANGALORE, Oct 29 (Reuters) - IT services firm Syntel Inc (SYNT.O) posted a quarterly profit that beat Wall Street expectations, helped by improved margins.

However, the Troy, Michigan-based company, which provides low-cost business process outsourcing services from India where most of its employees are based, expects margins to come under pressure. "Given the current environment, while revenue growth may resume in 2010, it is our expectation that margin pressures will also increase," the company said on a conference call.

Syntel, which competes with companies like Cognizant Technology (CTSH.O) and Infosys (INFY.BO)(INFY.O), said third-quarter gross margins improved to 49.3 percent, from 44.3 percent, a year ago.

William Blair & Co analyst Bhavan Suri said the third-quarter margin growth was not sustainable. As the company increases wages in April, margins will be hurt, he said.

Currency headwinds are also expected to impact margins.

"For every one percent appreciation in the rupee, margins get impacted by 40 basis points," Suri said.

Third-quarter net income increased to $30.3 million, or 73 cents per share, from $22.1 million, or 54 cents per share, a year earlier. Revenue rose 1 percent to $104.7 million.

Analysts expected earnings of 59 cents a share, excluding exceptional items, on revenue of $102.8 million, according to Thomson Reuters I/B/E/S.

The company also raised its full-year profit view to $2.60 to $2.65 a share from prior expectations of $2.40 to $2.50 a share.

It raised the lower end of full-year revenue view by $10 million, while cutting the upper end by $7 million to a range of $405 million to $408 million.

Analysts were looking for earnings of $2.45 a share, excluding items, on revenue of $404.4 million.

The company's shares, which have gained 62 percent of their value in last six months, were largely flat at $41.44 in afternoon trade Thursday on Nasdaq. (Reporting by Shrutika Verma; Editing by Ratul Ray Chaudhuri)