Genpact Q2 net up 40% at $39 mn

BPO major Genpact today posted 40.1% jump in net income at $39 million for the quarter ended June 30.

The net income attributable to Genpact shareholders stood at $27.8 million in the second quarter of 2010, Genpact said in a statement.

"Genpact delivered a great second quarter, with strong growth in revenues, adjusted operating income, earnings per share and cash flows. Genpact stand-alone revenues, excluding Headstrong revenues, grew 15% over the prior year quarter," Genpact President and CEO NV Tyagarajan said.

Revenues stood at $397.6 million for Q2 of 2011, up 29.3% from $307.6 million in Q2 of 2010.

For the year ahead, Tyagarajan remained confident of continuing its growth despite ongoing concerns in the global economy.

"We continue to expect full year revenue growth of 23-25% and our adjusted income from operations margin to be in the range of 16-16.5%...Despite ongoing concerns in the global economy we now expect to be at the higher end of both ranges," he said.

Revenues from clients other than GE, referred to as global client revenues (contributing about 69.2% to Genpact's revenues) grew 44.1%.

About 78.1% of Genpact's revenues for Q2 FY11 came from business process management services, compared to 85.9% for the second quarter of 2010.

Revenues from IT services were about 21.9% of total revenues for the second quarter of 2011, up from 14.1% for the second quarter of 2010, including IT services revenues attributable to Headstrong.

Earlier this year, Genpact acquired consulting and IT services firm Headstrong Corporation for $550 million.

"Integration of the Headstrong acquisition, which closed on May 3, is going well. This quarter we increased the number of clients contributing $1-5 million in annual revenues to 103 [including 25 from Headstrong], from 52 in the prior-year quarter, giving us a great runway for future growth," Tyagarajan said.

Genpact generated $60.9 million of cash from operations in Q2 of 2011, up from $30 million in Q2 of 2010. It had about $336.4 million in cash and cash equivalents as of June 30, 2011.

The Nasdaq-listed company had about 51,300 employees worldwide as on June 30, 2011, an increase from about 42,500 people (as on June 30, 2010).

Genpact's employee attrition rate for the six months ended June 30, 2011 was 29% (measured from day one of employment), up from 26% for the same period in 2010.