The Hindu Business Line : Genpact Q1 net income jumps on improved volume, pricing

NYSE-listed Genpact Ltd, which manages business processes for companies, has posted a jump in net income for the first quarter ended March 2008 at $19.7 million against $1.8 million a year-ago, primarily on the back of improved volume and pricing, as well as one-time forex gain.

Its first quarter revenues stood at $234.4 million, up 33 per cent year-on-year, driven by growth of existing global clients as well as GE. The net income margin was 8.4 per cent, up from 1.1 per cent. In absolute terms, of the total net income growth, close to $7 million was due to improvement in volume and price, while $6.7 million was one time forex gain. In addition, a portion was accounted for by the movement in interest income.

The company said the adjusted income from operations for the first quarter increased 63 per cent to $35.1 million, while the adjusted income from operations margin was 15 per cent up from 12.2 per cent a year ago.

Commenting on the performance, Mr Pramod Bhasin, Genpact’s President and CEO said, “We had an excellent quarter. We continue to grow our business with global clients and GE. We see strong demand for our services, as clients look to Genpact to provide value for their businesses, particularly in the current environment. We continue to expect revenues for the full year to grow organically by 25-27 per cent over 2007.”

Client revenue up 121%

Mr Bhasin said the company continued to derive efficiencies in operations and benefit from improved pricing. The global client revenue rose 121 per cent over the first quarter of 2007 (growth with existing clients, or organic growth, was 113 per cent), driven by Genpact’s ability to expand its existing client relationships and build new ones.

GE revenues in the first quarter grew one per cent over the first quarter of 2007. This excludes revenues from businesses divested by GE in 2007, all of which Genpact continues to serve and whose revenues are now included in global client revenues. It expects GE revenues to increase in mid-single digits in 2008 over 2007.

Annualised revenue per employee in the first quarter of 2008 was $29,000, an increase from $28,200 for the full year of 2007. As of March 31, 2008, Genpact had 34,300 employees worldwide, an increase from 32,700 at the end of 2007.

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