Genpact net dips 6.3%, maintains guidance

Higher taxes and incremental working capital related to the acquisition of Symphony Marketing Solutions pulled down the net income of Genpact, India’s largest business process outsourcing (BPO) company, by 6.01 per cent for the first quarter ended March 31, 2010. Net income stood at $28.1 million (Rs 125 crore) against $29.9 million (Rs 133 crore) in the year-ago period.

Total net revenue was $288.2 million (Rs 1,282 crore), up by 8.46 per cent from $265.8 million (Rs 1,182 crore) in the corresponding quarter last year.

Genpact completed a successful $580 million (Rs 2,581 crore) secondary offering for selling shareholders this quarter. Revenues from clients other than GE, which Genpact refers to as global client revenues, grew 13.7 per cent and represent approximately 60.7 per cent of Genpact’s total revenues, with the remaining 39.3 per cent coming from GE.

On a sequential basis, net income fell 18 per cent from $34.6 million (Rs 154 crore) in the previous quarter, while revenue fell 3 per cent from $296.9 million (Rs 1,321 crore). Genpact stuck to its revenue guidance of 14-17 per cent for 2010.

“Our outlook for the longer term, particularly with respect to business process management where we are a market leader, is optimistic. We continue to expect revenue growth in 2010 of 14- 17 per cent and adjusted income from operations margin of 17- 18 per cent,” said Pramod Bhasin, Genpact’s president and CEO.

Genpact posted a foreign exchange loss of $0.7 million (Rs 3.1 crore) in the quarter. It has cash and cash equivalents of $340 million (Rs 1,513 crore).