Higher revenue pushes Genpact profit up 8%

Company's net profit had stood at $46.7 million in the January-March quarter of 2013

Genpact, the country’s largest business process outsourcing (BPO) services firm, reported an eight per cent year-on-year increase in net profit to $50.6 million for the three months ended March.

This comes on the back of a five per cent year-on-year rise in revenue during the quarter to $503.8 million. Against the previous quarter, profit rose four per cent, even as revenue fell five per cent, primarily because of a sharp reduction in business from General Electric (GE), Genpact’s erstwhile parent and largest customer.

During the quarter, revenue from GE declined three per cent from the first quarter of 2013. GE accounts for 21 per cent of the company’s revenue; its share has been gradually declining. Excluding GE, revenue grew seven per cent over the first quarter of 2013.

N V Tyagarajan, Genpact’s president and chief executive, said the year was off to a good start. “Our pipeline continues to be healthy, with good inflows of larger, transformative deals, as we continue to invest in client-facing teams and domain experts.” In the quarter, the company bought Pharmalink Consulting, expected to enhance its domain expertise in the regulatory affairs business of life sciences.

The company has also kept its revenue forecast for the full year unchanged at $2.22-2.26 billion, with an adjusted income from operations margin at 15–15.5 per cent. The forecast excludes the Pharmalink acquisition, which is expected to close by mid-year.

BPO revenue from global clients grew six per cent in the quarter, led by growth in capital markets, consumer packaged goods, life sciences and health care verticals, the company said.