SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q/A

               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

                       THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 1998

                           Commission File No. 0-20943

                               Intelligroup, Inc.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

        New Jersey                                     11-2880025
--------------------------------            -----------------------------------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or Organization)

499 Thornall Street, Edison, New Jersey                                   08837
----------------------------------------                              ----------
(Address of Principal Executive Offices)                              (Zip Code)
                                                   
                                 (732) 590-1600
                         -------------------------------
                         (Registrant's Telephone Number,
                              Including Area Code)

     Indicate  by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

           Yes:  X                                            No:  
                ---                                               ---

     Indicate  the  number of  shares  outstanding  of each of the  Registrant's
classes of common stock, as of August 3, 1998:

         Class                                            Number of Shares
         -----                                            ----------------

Common Stock, $.01 par value                                 12,587,258


<PAGE>

                                EXPLANATORY NOTE

   
     Intelligroup, Inc., a New Jersey corporation (the "Company"), hereby amends
Items 1 and 2 of Part I and Item 6 of Part II of its  Quarterly  Report  on Form
10-Q, which was filed with the Securities and Exchange  Commission on August 13,
1998.  Items  1 and 2 of Part I are  hereby  amended  to  reflect  the  restated
financial  information  of  the  Company  as  a  result  of  the  CPI  Resources
transaction,  which has been accounted for as a pooling of interests.  Item 6 of
Part II is hereby amended to reflect such restated financial  information on the
financial data schedule.
    

<PAGE>


                          PART I. FINANCIAL INFORMATION

                    Item 1. Consolidated Financial Statements



                                      -1-
<PAGE>
                       INTELLIGROUP, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                       June 30, 1998 and December 31, 1997

<TABLE>
<CAPTION>

                                                                                         June 30,            December 31,
                                                                                           1998                  1997
                                                                                           ----                  ----
                                                                                        (unaudited)

                                 ASSETS

<S>                                                                                   <C>                   <C>          
Current Assets:
     Cash and cash equivalents......................................................  $   2,610,000         $   8,503,000
     Accounts receivable, less allowance for doubtful accounts of  $1,470,000
         at June 30, 1998 and $799,000 at December 31, 1997.........................     27,341,000            18,995,000
     Unbilled services..............................................................      8,915,000             7,834,000
     Deferred income taxes..........................................................        404,000               404,000
     Other current assets...........................................................      1,768,000               676,000
                                                                                      -------------         -------------
         Total current assets.......................................................     41,038,000            36,412,000

Equipment, net......................................................................      5,738,000             3,484,000
Cost in excess of fair value of net assets acquired, net............................      4,458,000                    --
Other assets........................................................................      1,230,000               337,000
                                                                                      -------------         -------------
                                                                                      $  52,464,000         $  40,233,000
                                                                                      =============         =============

                  LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
     Accounts payable...............................................................  $   3,294,000         $   1,701,000
     Accrued payroll and related taxes..............................................      3,959,000             2,636,000
     Accrued expenses and other liabilities.........................................      4,476,000             1,465,000
     Income taxes payable...........................................................        767,000             1,253,000
     Current portion of obligations under capital leases............................         21,000                20,000
                                                                                      -------------         -------------
         Total current liabilities..................................................     12,517,000             7,075,000


Obligations under capital leases, less current portion..............................         26,000                51,000

Deferred income taxes...............................................................        203,000               171,000

Other liabilities...................................................................             --               126,000

Commitments and contingencies

Shareholders' Equity
     Preferred stock, $.01 par value, 5,000,000 shares authorized, none issued
         or outstanding.............................................................             --                    --
     Common stock, $.01 par value, 25,000,000 shares authorized;
         12,571,392 and 12,358,981 shares issued and outstanding at
         June 30, 1998 and December 31, 1997, respectively..........................        126,000               124,000
     Additional paid-in capital.....................................................     33,682,000            30,175,000
     Retained earnings..............................................................      6,429,000             2,592,000
     Currency translation adjustments...............................................       (519,000)             (159,000)
     Minority interest in CPI Consulting............................................             --                78,000
                                                                                      -------------         -------------
         Total shareholders' equity ................................................     39,718,000            32,810,000
                                                                                      -------------         -------------
                                                                                      $  52,464,000         $  40,233,000
                                                                                      =============         =============
</TABLE>


          See accompanying notes to consolidated financial statements.

                                      -2-
<PAGE>



                       INTELLIGROUP, INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
        For the Three Months and Six Months Ended June 30, 1998 and 1997
                                   (unaudited)
<TABLE>
<CAPTION>

                                                 Three Months Ended  June 30,             Six Months Ended June 30,      
                                                 ----------------------------             -------------------------------
                                                      1998             1997                  1998                1997    
                                                      ----             ----                  ----                ----    

<S>                                               <C>             <C>                   <C>                 <C>          
Revenue  ........................................ $  34,005,000   $   20,777,000        $  62,759,000       $  37,934,000
Cost of sales....................................    21,460,000       14,377,000           40,654,000          26,953,000
                                                  -------------   --------------        -------------       -------------
         Gross profit............................    12,545,000        6,400,000           22,105,000          10,981,000

Selling, general and administrative expenses.....     8,775,000        4,517,000           15,778,000           7,712,000
Acquisition expenses.............................       434,000               --              434,000                  --
                                                  -------------   --------------        -------------       -------------
         Operating expenses......................     9,209,000        4,517,000           16,212,000           7,712,000
                                                  -------------   --------------        -------------       -------------

         Operating income........................     3,336,000        1,883,000            5,893,000           3,269,000

Interest - net...................................        18,000           36,000               98,000             114,000
Minority interest................................       (78,000)         (12,000)             (82,000)            (17,000)
                                                  -------------   --------------        -------------       -------------

Income before provision for income taxes.........     3,276,000        1,907,000            5,909,000           3,366,000

Provision for income taxes.......................     1,005,000          700,000            1,761,000           1,273,000
                                                  -------------   --------------        -------------       -------------

Net income....................................... $   2,271,000   $    1,207,000        $   4,148,000       $   2,093,000
                                                  =============   ==============        =============       =============

Earnings per share:
     Basic earnings per share:
         Net income per share.................... $        0.18   $         0.11        $        0.33       $        0.19
                                                  =============   ==============        =============       =============

         Weighted average number of
          common shares - Basic..................    12,498,000       11,158,000           12,434,000          11,132,000
                                                  =============   ==============        =============       =============

     Diluted earnings per share:
         Net income per share.................... $        0.18   $         0.11        $        0.32       $        0.19
                                                  =============   ==============        =============       =============

         Weighted average number of
          common shares - Diluted................    12,922,000       11,255,000           12,854,000          11,230,000
                                                   ============   ==============        =============       =============

Comprehensive Income

Net income....................................... $   2,271,000   $    1,207,000        $   4,148,000       $   2,093,000

Other comprehensive income -
         Currency translation adjustments........      (289,000)              --             (360,000)                 --
                                                  -------------   --------------        -------------       -------------

Comprehensive income............................. $   1,982,000   $    1,207,000        $   3,788,000       $   2,093,000       
                                                  =============   ==============        =============       =============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      -3-
<PAGE>


                       INTELLIGROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the Six Months Ended June 30, 1998 and 1997
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                                         June 30,              June 30,
                                                                                           1998                  1997    
                                                                                           ----                  ----    
<S>                                                                                   <C>                   <C>          
Cash flows from operating activities:
     Net income...................................................................... $   4,148,000         $   2,093,000
     Adjustments to reconcile net income to net cash
         used in operating activities:
         Depreciation and amortization...............................................       427,000               182,000
         Provision for doubtful accounts.............................................       610,000                75,000
         Minority interest in income of subsidiary...................................        78,000                    --
         Deferred income taxes.......................................................        32,000                    --
     Changes in operating assets and liabilities:
         Accounts receivable.........................................................    (8,956,000)           (3,284,000)
         Unbilled services...........................................................    (1,081,000)           (2,533,000)
         Other current assets........................................................    (1,092,000)             (154,000)
         Other assets................................................................      (893,000)             (217,000)
         Accounts payable............................................................     1,593,000               481,000
         Accrued payroll and related taxes...........................................     1,323,000               749,000
         Accrued expenses and other liabilities......................................     1,458,000              (385,000)
         Income taxes payable........................................................      (486,000)             (535,000)
                                                                                     --------------         --------------
             Net cash provided by (used in) operating activities.....................    (2,839,000)           (3,528,000)

Cash flows from investing activities:
     Purchase of equipment...........................................................    (3,052,000)           (1,651,000)

Cash flows from financing activities:
     Proceeds from exercise of stock options.........................................       382,000               342,000
     Principal payments under capital leases.........................................       (24,000)               (4,000)
                                                                                     --------------         -------------
             Net cash provided by financing activities...............................       358,000               338,000

     Effect of foreign currency exchange rate changes on cash........................      (360,000)                   --
                                                                                     --------------         -------------
             Net decrease in cash and cash equivalents ..............................    (5,893,000)           (4,841,000)
Cash and cash equivalents at beginning of period.....................................     8,503,000             7,479,000
                                                                                     --------------         -------------
Cash and cash equivalents at end of period........................................... $   2,610,000         $   2,638,000
                                                                                      =============         =============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      -4-
<PAGE>


                       INTELLIGROUP, INC. and SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


(1) BASIS OF PRESENTATION

     The   consolidated   financial   statements  and   accompanying   financial
information  as of June 30, 1998 and for the three and six months ended June 30,
1998 and 1997 are  unaudited  and,  in the  opinion of  management,  include all
adjustments  (consisting only of normal recurring adjustments) which the Company
considers  necessary for a fair  presentation  of the financial  position of the
Company  at such  dates  and the  operating  results  and cash  flows  for those
periods.  The  financial  statements  included  herein  have  been  prepared  in
accordance with generally accepted accounting principles and the instructions of
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and
footnote  disclosures  normally  included in  financial  statements  prepared in
accordance with generally accepted accounting  principles have been condensed or
omitted.  These  financial  statements  should be read in  conjunction  with the
Company's  audited  financial  statements  for the year ended December 31, 1997,
which were included as part of the Company's Form 10-KSB.

     Management of the Company, after consultation with its auditors, determined
that the  acquisition  of CPI  Resources  Limited in May 1998,  in a transaction
accounted  for as a pooling  of  interests,  was not  material  to prior  period
consolidated  financial  statements and thus did not restate them. However, as a
result of a subsequent SEC staff  interpretation  of materiality,  management of
the  Company  has  elected  to  restate  prior  period  consolidated   financial
statements in accordance with pooling of interests accounting.  The consolidated
financial  statements for all periods presented in this amended report have been
restated to include  the results of  operations  and  financial  position of CPI
Resources Limited.

     Results for interim periods are not  necessarily  indicative of results for
the entire year.

(2) EARNINGS PER SHARE

     In 1997, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standards  No. 128  "Earnings  per Share" ("SFAS 128")
which has  replaced  the  former  rules  for  earnings  per share  computations,
presentation and disclosure. Under the new standard, basic earnings per share is
computed by dividing  income  available to common  shareholders  by the weighted
average number of common stock outstanding for the period.  Diluted earnings per
share  reflects the  potential  dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock.

     The  Company has adopted  SFAS 128 and,  as required by the  standard,  has
restated all prior period  earnings per share data.  The  Company's new earnings
per share amounts as

                                      -5-
<PAGE>

calculated under SFAS 128 are not materially different from those computed under
the former accounting standard.

                                      -6-
<PAGE>

     A reconciliation of weighted average number of common shares outstanding to
weighted average common shares outstanding assuming dilution is as follows:

<TABLE>
<CAPTION>

                                                   Three Months Ended                    Six Months Ended
                                                   ------------------                    ----------------
                                                        June 30,                             June 30,
                                                        --------                             --------
                                                 1998               1997               1998             1997
                                                 ----               ----               ----             ----
<S>                                       <C>                 <C>                 <C>                <C>    
Weighted average number of common
shares                                         12,498,000          11,158,000        12,434,000       11,132,000
Common share equivalents of outstanding
stock options                                     424,000              97,000           420,000           98,000
                                          ---------------     ---------------    --------------    -------------
Weighted average number of common
shares assuming dilution                       12,922,000          11,255,000        12,854,000       11,230,000
                                          ===============     ===============    ==============    =============
</TABLE>


     Certain stock options outstanding at June 30, 1998 were not included in the
computations  of earnings  per share  assuming  dilution  because  the  options'
exercise prices were greater than the average price of the common shares.

(3) COMPREHENSIVE INCOME

     Effective  January 1, 1998, the Company  adopted the provisions of SFAS No.
130, "Reporting Comprehensive Income," which establishes standards for reporting
comprehensive income and its components.  In June 1997, the FASB issued SFAS No.
131,  "Disclosures  about  Segments of an Enterprise  and Related  Information,"
which establishes  revised  reporting and disclosure  requirements for operating
segments.  These standards increase financial reporting  disclosures and have no
impact on the Company's financial position or results from operations.

(4) ACQUISITIONS

     On May 7, 1998,  the Company  acquired  thirty  percent of the  outstanding
share capital of CPI  Consulting  Limited.  The  acquisition  of CPI  Consulting
Limited was accounted for utilizing purchase accounting.  The consideration paid
by the Company  included the issuance of 165,696 shares of the Company's  Common
Stock with a fair market value of $3.1  million,  and a future  liability to the
sellers  predicated  upon  operating  results for the balance of 1998,  which is
currently estimated at $1.2 million.  The excess of purchase price over the fair
value of the net assets acquired was attributed to intangible assets,  amounting
in the  aggregate  to  $4.5  million,  which  was  recorded  at the  time of the
purchase.

     On May 21, 1998, the Company acquired all of the outstanding  share capital
of CPI Resources Limited. The acquisition of CPI Resources Limited was accounted
for as a  pooling  of  interests.  Prior  year  results  have been  restated  in
accordance  with  pooling of interests  accounting.  As  consideration  for this
acquisition, the Company issued 371,000 shares of the Company's Common Stock. At
the time of the acquisition,  CPI Resources Limited owned seventy percent of the
outstanding  share capital of CPI Consulting  Limited.  In connection  with this
acquisition, the Company incurred one-time costs of $434,000.



                                      -7-
<PAGE>

ITEM 2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF RESULTS OF  OPERATIONS  AND
         FINANCIAL CONDITION.

GENERAL

     The  Company  provides a wide  range of  information  technology  services,
including  enterprise-wide  business process  solutions,  internet  applications
services,  systems integration and custom software  development based on leading
technologies.  The Company has grown rapidly since 1994 when it made a strategic
decision  to  diversify  its  customer  base  by  expanding  the  scope  of  its
integration  and  development  services and to utilize SAP software as a primary
tool to implement  enterprise-wide  business  process  solutions.  In 1995,  the
Company became an SAP National  Implementation Partner and also began to utilize
Oracle  products  to  diversify  its  service  offerings.  In 1997,  the Company
achieved  National Logo Partner status with SAP. The Company's  current contract
with SAP expires on December 31, 1998 and  provides  for an  automatic  one-year
renewal  period  unless  either party  provides at least six weeks prior written
notice of its intention not to renew. This agreement contains no minimum revenue
requirements or cost sharing  arrangements  and does not provide for commissions
or royalties to either party. In July 1997, the Company achieved  AcceleratedSAP
Partner Status with SAP by meeting certain performance  criteria  established by
SAP.  Also,  in 1997,  the Company began to provide  implementation  services to
PeopleSoft and Baan  licensees to further  diversify its service  offerings.  In
July 1997,  the  Company  was awarded an  implementation  partnership  status by
PeopleSoft.  In  September  1997,  the  Company  was  awarded  an  international
consulting  partnership status by Baan. The Company recently expanded its Oracle
applications implementation services practice and added upgrade services to meet
market demand of mid-size to large companies that are  implementing or upgrading
Oracle applications

     The  Company  generates  revenue  from  professional  services  rendered to
customers.  Revenue is  recognized  as services  are  performed.  The  Company's
services   range  from  providing   customers   with  a  single   consultant  to
multi-personnel  full-scale projects. The Company provides these services to its
customers  primarily  on a time and  materials  basis and  pursuant  to  written
contracts which can be terminated  with limited  advance  notice,  typically not
more than 30 days, and without  significant  penalty,  generally limited to fees
earned and expenses incurred by the Company through the date of termination. The
Company provides its services directly to end-user  organizations or as a member
of a consulting team assembled by another information technology consulting firm
to Fortune 1000 and other large and mid-sized  companies.  The Company generally
bills its customers semi-monthly for the services provided by its consultants at
contracted rates. Where contractual provisions permit, customers also are billed
for reimbursement of expenses incurred by the Company on the customers' behalf.

     The Company has provided  services on certain  projects in which it, at the
request of the clients, offered a fixed price for its services, however, none of
these  projects is  currently  material  to the  Company's  business,  financial
condition and results of  operations.  The Company  believes that, as it pursues
its  strategy  of making  turnkey  project  management  a larger  portion of its
business,  it will continue to offer fixed price  projects.  The Company has had
limited  prior   experience  in  pricing  and   performing   under  fixed  price
arrangements and believes that there are certain risks related thereto, and thus
prices  such  arrangements  to  reflect  the  associated  risk.

                                      -8-
<PAGE>

There  can be no  assurance  that  the  Company  will be able to  complete  such
projects within the fixed price  timeframes.  The failure to perform within such
fixed price contracts,  if entered into, could have a material adverse effect on
the Company's business, financial condition and results of operations.

   
     The  Company has derived  and  believes  that it will  continue to derive a
significant  portion  of its  revenue  from a limited  number of  customers  and
projects. For the six months ended June 30, 1998 and the year ended December 31,
1997,  the  Company's  ten  largest  customers  accounted  for in the  aggregate
approximately  42% and 46% of its revenue,  respectively.  During the six months
ended  June 30,  1998,  Bristol-Myers  Squibb  accounted  for  more  than 10% of
revenue.  During the year ended  December 31, 1997,  PricewaterhouseCoopers  LLP
(formerly Price Waterhouse LLP) accounted for more than 10% of revenue.  For the
six months ended June 30, 1998 and the year ended December 31, 1997, 34% and 32%
of the  Company's  revenue was  generated  by serving as a member of  consulting
teams assembled by other information  technology  consulting firms. There can be
no assurance that such information  technology consulting firms will continue to
engage the  Company in the future at  current  levels of  retention,  if at all.
During the six months ended June 30, 1998 and the year ended  December 31, 1997,
62% and 58% of the  Company's  total  revenue was derived from projects in which
the Company  implemented  software developed by SAP. During the six months ended
June 30, 1998 and the year ended December 31, 1997, 13% and 12% of the Company's
total  revenues,  respectively,  were derived from projects in which the Company
implemented  software developed by Oracle.  During the six months ended June 30,
1998, approximately 46% of the Company's revenue was derived from engagements in
which the  Company  had  project  management  responsibilities,  compared to 28%
during the year ended December 31, 1997.
    

     The Company's most significant cost is project  personnel  expenses,  which
consist of consultant salaries, benefits and payroll-related expenses. Thus, the
Company's financial performance is based primarily upon billing margin (billable
hourly rate less the cost to the Company of a consultant on an hourly basis) and
personnel  utilization rates (billable hours divided by paid hours). The Company
believes that turnkey  project  management  assignments  typically  carry higher
margins. The Company has been shifting to such higher-margin  turnkey management
assignments  and more complex  projects by leveraging its  reputation,  existing
capabilities,  proprietary  implementation  methodology,  development  tools and
offshore development  capabilities with expanded sales and marketing efforts and
new service offerings to develop turnkey project sales  opportunities  with both
new and existing  customers.  The  Company's  inability to continue its shift to
higher-margin  turnkey  management  assignments  and more  complex  projects may
adversely impact the Company's future growth.

     Since  late 1994,  the  Company  has made  substantial  investments  in its
infrastructure in order to support its rapid growth.  For example,  in 1994, the
Company  established  and funded an Advanced  Development  Center (the "ADC") in
India,  and in 1995  established  a sales  office  in  Northern  California.  In
addition,  from 1994 to date,  the  Company  has  incurred  expenses  to develop
proprietary  development  tools and its proprietary  accelerated  implementation
methodology and toolset. Commencing in 1995, the Company has been increasing its
sales force and its marketing, finance, accounting and administrative staff.

                                      -9-
<PAGE>

     The Company  currently  maintains sales and operations  offices in Chicago,
Detroit,  Foster City  (California),  Reston (Virginia) and Washington,  D.C. In
addition to the ADC and sales offices in India, the Company also has offices in,
Australia,  Denmark,  Japan, New Zealand,  Singapore and the United Kingdom. The
Company  has  reviewed  the  adequacy of its leased  facilities  in light of its
expanded staff and has executed a lease for approximately 48,475 square feet, in
Edison,  New Jersey for an initial term of 10 years. The Company expects to move
its  headquarters  to such location in September 1998. The Company expects to be
able to sublet its current  headquarters  for the  remainder  of the term of its
sublease,  which  expires  November 15, 1999;  and is  currently  negotiating  a
sub-lease agreement which it expects will become effective in September.

     This Form 10-Q contains  forward-looking  statements  within the meaning of
Section 21E of the  Securities  Exchange  Act of 1934,  as  amended,  including,
without  limitation,  statements  regarding the Company's  intention to shift to
higher margin turnkey  management  assignments and more complex  projects and to
utilize its proprietary  implementation  methodology in an increasing  number of
projects.  Such  forward-looking  statements  include  risks and  uncertainties,
including,  but not limited to: (i) the substantial variability of the Company's
quarterly  operating  results caused by a variety of factors,  many of which are
not within the Company's  control,  including (a) seasonal  patterns of hardware
and  software  capital  spending  by  customers,   (b)  information   technology
outsourcing trends, (c) the timing, size and stage of projects,  (d) new service
introductions  by the Company or its  competitors  and the timing of new product
introductions by the Company's ERP partners, (e) levels of market acceptance for
the Company's services,  (f) the hiring of additional staff; (ii) changes in the
Company's billing and employee utilization rates; (iii) the Company's ability to
manage its growth  effectively,  which will  require the Company (a) to continue
developing and improving its operational,  financial and other internal systems,
as well as its business development capabilities, (b) to attract, train, retain,
motivate  and manage its  employees,  (c) to continue to maintain  high rates of
employee  utilization at profitable  billing rates and, (d) to maintain  project
quality,  particularly if the size and scope of the Company's projects increase;
(iv) the Company's ability to maintain an effective  internal control structure;
(v) the Company's limited operating history within its current line of business;
(vi) the Company's reliance on a continued relationship with SAP America and the
Company's  present  status as a SAP National Logo  Partner;  (vii) the Company's
substantial  reliance on key  customers  and large  projects;  (viii) the highly
competitive nature of the markets for the Company's services; (ix) the Company's
ability  to   successfully   address  the  continuing   changes  in  information
technology,  evolving industry  standards and changing  customer  objectives and
preferences;  (x) the Company's  reliance on the  continued  services of its key
executive officers and leading technical  personnel;  (xi) the Company's ability
to attract and retain a  sufficient  number of highly  skilled  employees in the
future;  (xii) the progress the Company may have at  continuing to diversify its
offerings,  including growth in its Oracle, Baan and PeopleSoft services; (xiii)
uncertainties  resulting  from  pending  litigation  matters and from  potential
administrative  and regulatory  immigration  and tax law matters;  and (xiv) the
Company's  ability to protect its intellectual  property  rights.  The Company's
actual  results  may  differ  materially  from  the  results  disclosed  in such
forward-looking statements.



                                      -10-
<PAGE>

RESULTS OF OPERATIONS

     The following table sets forth for the periods  indicated certain financial
data as a percentage of revenue:

<TABLE>
<CAPTION>
   
                                                                        PERCENTAGE OF REVENUE
                                                  ------------------------------------------------------------------
                                                  THREE MONTHS ENDED JUNE 30,            SIX MONTHS ENDED JUNE 30,
                                                  ------------------------------    --------------------------------
                                                      1998               1997               1998               1997
                                                      ----               ----               ----               ----
<S>                                                  <C>                <C>                <C>                <C>   
Revenue.....................................         100.0%             100.0%             100.0%             100.0%
Cost of sales...............................          63.1               69.2               64.8               71.1
                                                   -------            -------            -------            -------
    Gross profit............................          36.9               30.8               35.2               28.9
Selling, general and administrative
expenses....................................          25.8               21.7               25.1               20.3
Acquisition expenses........................           1.3                0.0                0.7                0.0
                                                   -------            -------            -------            -------
    Operating income........................           9.8                9.1                9.4                8.6
Other income (expense)......................          (0.2)               0.1                0.0                0.3
                                                   -------            -------            -------            -------
Income before provision for income taxes....           9.6                9.2                9.4                8.9
Provision for income taxes..................           2.9                3.4                2.8                3.4
                                                   -------            -------            -------            -------
Net income .................................           6.7%               5.8%               6.6%               5.5%
                                                   =======            =======            =======            =======
</TABLE>
    

THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THREE MONTHS ENDED JUNE 30, 1997
   
     Revenue.  Revenue increased by 63.7%, or $13.2 million,  from $20.8 million
during the three  months ended June 30, 1997 to $34.0  million  during the three
months  ended  June 30,  1998.  This  increase  was  attributable  primarily  to
increased  demand  for  the  Company's  SAP-related   implementation  consulting
services and, to a lesser extent,  to increased demand for the Company's systems
integration and custom software development services.

     Gross profit.  The Company's cost of sales  includes  primarily the cost of
salaries to consultants  and related  employee  benefits and payroll taxes.  The
Company's cost of sales increased by 49.3%, or $7.1 million,  from $14.4 million
during the three  months ended June 30, 1997 to $21.5  million  during the three
months ended June 30, 1998.  The increase was due to increased  personnel  costs
resulting  from the hiring of additional  consultants to support the increase in
demand for the  Company's  services.  The  Company's  gross profit  increased by
96.0%, or $6.1 million, from $6.4 million during the three months ended June 30,
1997 to $12.5 million during the three months ended June 30, 1998.  Gross profit
margin  increased  from 30.8% of revenue  during the three months ended June 30,
1997 to 36.9% of  revenue  during the three  months  ended  June 30,  1998.  The
increase  in such  gross  profit  margin was  attributable  to the  increase  in
implementation service projects, an increase in utilization and improved billing
margins.

     Selling,  general  and  administrative   expenses.   Selling,  general  and
administrative  expenses consist  primarily of  administrative  salaries,  sales
personnel compensation,  travel and entertainment,  some of the costs associated
with the ADC and  related  development  costs and  professional  fees.  Selling,
general and administrative  expenses  increased by 94.3%, or $4.3 million,  from
$4.5 million  during the three months ended June 30, 1997 to $8.8 million during
the three months ended June 30, 1998,  and  increased as a percentage of revenue
from 21.7% to
    

                                      -11-
<PAGE>
   
25.8% of revenue.  The increases in such  expenses in absolute  dollars and as a
percentage of revenue were due primarily to the expansion of the Company's sales
and marketing activities, and increased travel and entertainment expenses due to
the growth of the business and the employee  base.  These expenses were incurred
to support the continued  revenue growth of the Company in the United States and
abroad.  In  addition,  such  expenses  increased  due to  increased  sales  and
management  recruiting costs,  support services and an increase in the provision
for doubtful accounts.
    

     Acquisition  expense.  During the three  months  ended June 30,  1998,  the
Company  incurred  costs of $434,000 in connection  with the  acquisition of CPI
Resources  Limited,  which was accounted  for as a pooling of  interests.  These
costs primarily consisted of professional fees associated with the acquisition.

     Interest  income.  Interest income has been earned on interest bearing cash
accounts and short term  investments.  In accordance with investment  guidelines
approved by the Company's  Board of Directors,  cash balances in excess of those
required to fund  operations  have been  invested in  short-term  U.S.  Treasury
securities and commercial paper with a credit rating no lower than A1/P1.

   
     Provision  for Income Taxes.  The Company's  effective tax rate was 31% and
37% for the three months ended June 30, 1998,  and June 30, 1997,  respectively.
In 1996,  the Company  elected a five year tax holiday in India,  in  accordance
with a local tax  incentive  program  whereby  no income tax will be due in such
period.  For the three  months ended June 30,  1998,  the tax holiday  favorably
impacted the Company's effective tax rate by approximately 11%, while the effect
was not significant in the three months ended June 30, 1997.
    

SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE 30, 1997

   
     Revenue.  Revenue increased by 65.4%, or $24.9 million,  from $37.9 million
during the six months ended June 30, 1997 to $62.8 million during the six months
ended June 30,  1998.  This  increase  was  attributable  primarily to increased
demand for the Company's SAP-related  implementation consulting services and, to
a lesser extent, to increased demand for the Company's  systems  integration and
custom software development services.

     Gross profit.  The  Company's  cost of sales  increased by 50.8%,  or $13.7
million,  from $27.0 million  during the six months ended June 30, 1997 to $40.7
million  during the six months  ended June 30,  1998.  The  increase  was due to
increased personnel costs resulting from the hiring of additional consultants to
support the increase in demand for the Company's  services.  The Company's gross
profit  increased by 101.3% or $11.1 million,  from $11.0 million during the six
months ended June 30, 1997 to $22.1 million during the six months ended June 30,
1998.  Gross profit margin increased from 28.9% of revenue during the six months
ended  June 30,  1997 to 35.2% of revenue  during the six months  ended June 30,
1998. The increase in such gross profit margin was  attributable to the increase
in  implementation  service  projects,  an increase in utilization  and improved
billing margins.
    

                                      -12-
<PAGE>

   
     Selling,  general  and  administrative   expenses.   Selling,  general  and
administrative  expenses increased by 104.6% or $8.1 million,  from $7.7 million
during the six months ended June 30, 1997 to $15.8 million during the six months
ended June 30, 1998,  and  increased  as a  percentage  of revenue from 20.3% to
25.1% of revenue.  The increases in such  expenses in absolute  dollars and as a
percentage of revenue were due primarily to the expansion of the Company's sales
and marketing activities, and increased travel and entertainment expenses due to
the growth of the business and the employee  base.  These expenses were incurred
to support the continued  revenue growth of the Company in the United States and
abroad.  In  addition,  such  expenses  increased  due to  increased  sales  and
management  recruiting costs,  support services and an increase in the provision
for doubtful accounts.
    

     Acquisition expense. During the six months ended June 30, 1998, the Company
incurred costs of $434,000 in connection  with the  acquisition of CPI Resources
Limited,  which  was  accounted  for as a  pooling  of  interests.  These  costs
primarily consisted of professional fees associated with the acquisition.

     Interest  income.  Interest income has been earned on interest bearing cash
accounts and short term  investments.  In accordance with investment  guidelines
approved by the Company's  Board of Directors,  cash balances in excess of those
required to fund  operations  have been  invested in  short-term  U.S.  Treasury
securities and commercial paper with a credit rating no lower than A1/P1.

   
     Provision  for Income Taxes.  The Company's  effective tax rate was 30% and
38% for the six months ended June 30, 1998, and June 30, 1997, respectively.  In
1996, the Company elected a five year tax holiday in India, in accordance with a
local tax  incentive  program  whereby no income tax will be due in such period.
For the six months ended June 30, 1998, the tax holiday  favorably  impacted the
Company's  effective  tax rate by  approximately  12%,  while the effect was not
significant in the six months ended June 30, 1997.
    

BACKLOG

     The Company  normally  enters into written  contracts with its customers at
the time it commences work on a project. These written contracts contain varying
terms  and  conditions  and  the  Company  does  not  generally  believe  it  is
appropriate  to  characterize  such written  contracts as creating  backlog.  In
addition, because these written contracts often provide that the arrangement can
be terminated with limited advance notice and without significant  penalty,  the
Company does not believe that projects in process at any one time are a reliable
indicator or measure of expected  future  revenue.  In the event that a customer
terminates  a project,  the  customer  remains  obligated to pay the Company for
services performed by it through the date of termination.

                                      -13-
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     The Company funds its  operations  primarily  from cash flow generated from
operations,  and to a lesser  extent,  from  cash  balances  generated  from the
Company's initial and follow-on public offerings consummated in October 1996 and
July 1997, respectively.

   
     The Company had cash and cash equivalents of $2.6 million at June 30, 1998,
and $8.5 million at December 31, 1997. The Company had working  capital of $28.5
million at June 30, 1998, and $29.3 million at December 31, 1997.

     Cash used in operating  activities  was $2.8 million  during the six months
ended June 30, 1998,  resulting primarily from the growth in accounts receivable
and  unbilled  services.  Cash used in operating  activities  for the six months
ended June 30, 1997 was $3.5 million.

     The Company  invested  $3.1 million and $1.7 million in computer  equipment
and furniture during the six months ended June 30, 1998 and 1997,  respectively.
The Company has outstanding  commitments of  approximately  $882,000  related to
furniture  and  fixtures for the new  headquarters  in Edison,  New Jersey.  The
Company made advance  payments of $283,000  during the six months ended June 30,
1998 toward these commitments, which is presented in other current assets on the
June 30, 1998 balance sheet.
    

     In January  1997,  and as later  amended on August 18,  1997,  the  Company
entered into a two-year  credit  agreement with a bank (the "Bank").  The credit
facility with the Bank has two  components  comprised of (i) a revolving line of
credit pursuant to which the Company may borrow up to $7.5 million either at the
Bank's prime rate per annum or the EuroRate plus 2% (at the  Company's  option),
and (ii)  equipment term loans pursuant to which the Company may borrow up to an
aggregate  of  $350,000  (at the Bank's  prime rate plus 1/4 of 1% per annum) to
purchase  equipment.  The credit agreement  contains covenants which require the
Company to (i) maintain its working  capital during the year at no less than 90%
of the working capital at the end of the immediately  preceding  fiscal year and
at the end of each fiscal  year at no less than 105% of its  working  capital at
the end of the immediately preceding fiscal year; and (ii) maintain its tangible
net worth  during the year at no less than 95% of its  tangible net worth at the
end of the immediately  preceding fiscal year and at the end of each fiscal year
at no less  than  108%  of  tangible  net  worth  at the end of the  immediately
preceding  fiscal year. As of June 30, 1998,  the Company is in compliance  with
all debt covenants.  The Company's  obligations  under the credit  agreement are
collateralized  by  substantially  all of the  Company's  assets,  including its
accounts receivable and intellectual  property.  The Company's obligations under
the credit  facility are payable at the  expiration  of such facility on January
22, 1999. These terms are subject to the Company  maintaining an  unsubordinated
debt to tangible  net worth ratio of no greater  than one to one and an earnings
before  interest  and taxes to interest  expense  ratio of no less than three to
one.

     As of June 30, 1998, there were no amounts  outstanding under the revolving
line of credit and no equipment term loans outstanding.

                                      -14-
<PAGE>

     The Company believes that its available funds, together with current credit
arrangements and the cash flows expected to be generated from  operations,  will
be adequate to satisfy its current and planned  operations  through at least the
next 12 months.


                                      -15-
<PAGE>


Item 6. Exhibits and Reports on Form 8-K.

     (a)  Exhibits.

   
          27.1  Restated Financial Data  Schedule for the  period ended June 30,
                1998.
          27.2  Restated Financial Data Schedule for the year ended December 31,
                1997.
          27.3  Restated Financial Data  Schedule for the  period ended June 30,
                1997.
    

     (b)  Reports on Form 8-K.

          On May 4, 1998,  the  Company  filed a report on Form 8-K to  disclose
          certain management changes.

          On May 27,  1998,  the Company  filed a report on Form 8-K to disclose
          the  acquisitions  of CPI  Consulting  Limited  (No.  3316554) and CPI
          Resources Limited (No. 2080824).



                                      -16-
<PAGE>

                                   SIGNATURES


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                    Intelligroup, Inc.


DATE: March 26, 1999                By: /s/ Stephen A. Carns
                                        -----------------------
                                    Stephen A. Carns,
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)


DATE:  March 26, 1999               By: /s/ Gerard E. Dorsey 
                                        ------------------------
                                    Gerard E. Dorsey,
                                    Senior Vice President - Finance and Chief
                                    Financial Officer
                                    (Principal Financial and Accounting Officer)


                                      -17-