Genpact net grows 6.7%, raises annual revenue guidance

Genpact, India’s largest business process outsourcing services company, on Wednesday reported a 6.7 per cent rise in its March quarter net profit at $38.5 million, compared to a year earlier. Revenue for the first quarter rose 32 per cent to $435.5 million.

On a quarter-on-quarter basis, net profit fell by 36.9 per cent and revenue was down by 1.6 per cent. Despite posting a sequential decline in net profit, the NYSE-listed company sounded upbeat about the demand environment. It revised its annual revenue outlook upwards to $1.86-1.90 billion, from $1.84-1.88 billion, buoyed by new business wins and recent acquisitions.

Last month, Genpact had announced the acquisition of Accounting Plaza, a provider of finance and accounting and human resources services.

“The market environment overall is stable, with increasing interest in long-term, transformative business process management engagements. We are seeing continued strong demand for our smart decision services offerings and accelerating demand for our IT (information technology) services. Our pipeline remains healthy, reflecting both the investments we have been making in the front-end and the slow recovery in global markets,” said N V Tyagarajan, president and chief executive of Genpact.

Genpact said revenue from global clients, which accounted 73.4 per cent of its total revenue, grew by 46.6 per cent. The remaining 26.6 per cent of its revenue came from GE.

Around 76 per cent of Genpact’s revenue came from business process management services, compared to 87 per cent in the first quarter of 2011. IT services accounted 24 per cent of the total revenue, up from 12.8 per cent in the first quarter of 2011.

Genpact generated $4.9 million of cash from operations in the first quarter of 2012, compared to $21.1 million in the year-ago quarter. The decline reflects increased working capital requirements and cash tax payments. The company had $412 million in cash and cash equivalents and short-term deposits as of March 31, 2012.

Genpact’s total headcount stood at 56,500, up from 45,500 as on March 31, 2011. The employee attrition rate came down to 23 per cent, from 29 per cent in the same period last year.