Genpact signs multi-year China deal

Even as it signed another deal in this regard, Genpact, India’s largest business process outsourcing (BPO) company, said it was bullish on its China-to-China business and expected this to grow around 30 per cent in the long term.

The China-to-China business currently contributes less than two per cent to the BPO’s total revenues, which stood at $296.9 million (Rs 1,365 crore) for the quarter ended 31 December, 2009. Genpact today signed a multi-year deal with China’s Hello Communications, a 100 per cent subsidiary of Hikari Tsushin, to provide the latter with customer service and finance and accounting to information technology infrastructure support and back office processing from its delivery centres in China.

“This deal is for a period of three-five years, involving 100-200 people initially. It will give us access into the China and Japan markets. It is a strategic deal,” said Pramod Bhasin, Genpact’s president and CEO.

Explained Alok Shende, principal analyst and founder director of consulting firm Ascentius, “Assuming the cost per seat at $12 for 200 people, the revenue for three years is around $20 million (Rs 90 crore) and for five years, the revenue is $40 million (Rs 180 crore).”

Genpact currently has a headcount of 3,500 at its three centres in China. It expects to add at least one centre by the end of this year, employing another 500 people.

Bhasin, when asked, denied reports of listing in India.

The BPO is also looking for acquisitions. “We are looking hard and though nothing is on the table, the ideal kind of size will be similar to that of Symphony Marketing Solutions (SMS),” added Bhasin. Analysts peg the SMS deal to be Rs 450-500 crore and SMS’ revenue to be around Rs 300 crore.

Recently, Genpact saw General Electric, General Atlantic, Oak Hill Capital Partners and Wells Fargo & Company offload their stake in it, which Bhasin said would increase the float of the company, besides allowing other investors to come in.