Genpact posts three-fold net income, ups guidance

Genpact, India’s largest business process outsourcing (BPO) company, has increased its full-year revenue guidance by 26-28 per cent, even as most Indian IT companies gave muted or lower guidance for the quarter ended June 30.

Meanwhile, high value from the re-engineering business, improved pricing and increased internal efficiencies helped Genpact record a three-time growth in net income – from $7.1 million (around Rs 30 crore) to $24.8 million (around Rs 105 crore) – in the quarter under review.
 

BUCKING THE TREND
In $ million	3-month ended June		6-month ended June
	2007	2008	2007	2008
Net revenues	200.7	253.6	376.8	488.2
Cost of revenue	120.7	147.0	229.6	293.1
Gross profit	79.9	106.4	147.2	195.0
Operational income	19.1	29.1	29.7	46.5
Net income	7.1	24.8	8.9	44.5

Its revenues from BPO services grew 26.4 per cent to $253.6 million (around Rs 1,065 crore) from $200.6 million (around Rs 845 crore) in the corresponding quarter ended June 30, 2007.

Sequentially, the net income was up 26 per cent from $19.7 million (Rs 82.7 crore) and revenue grew 8 per cent from $234.4 million (Rs 984.4 crore).

Pramod Bhasin, President and CEO, Genpact, attributed the results to “increased internal efficiencies, a shift towards higher value work and improved pricing for the value delivered. We expect our adjusted income from operations margins to improve by 80 to 100 basis points.”

The company reported forex losses of $8.8 million (around Rs 37 crore) for the quarter. Since Genpact has reclassified its foreign exchange gains/losses, the residual foreign exchange gain/losses pertaining to re-measurement of foreign currency assets are a part of income from operations. Hence, this reclassification does not affect the net income or earnings per share.

Global client revenues increased 68 per cent over the second quarter of 2007 and growth from existing clients, or organic growth, was 75 per cent. The GE revenues grew 1 per cent y-o-y. Genpact will utilise 8-10 per cent of its revenue for capital expenditure.