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Mr Pramod Bhasin

Our Bureau

New Delhi, Feb. 18 BPO major Genpact on Wednesday posted a net income of $125.1 million for 2008, up 122 per cent over 2007, while the revenue rose 26 per cent.

The revenue growth, which took the company’s topline to $1.04 billion (against $823.2 million in 2007), is in line with the guidance given Genpact in November.

However, based on the current view of the market and feedback from its clients, the company expects the 2009 revenue to grow 10-15 per cent (lower than the 26 per cent growth notched in 2008). “We are still very optimistic about the opportunities for Genpact, both with existing clients and potential new ones, but we are taking a cautious approach to the current and anticipated environment,” the Genpact President and CEO, Mr Pramod Bhasin, said.

He said that 2008 performance came primarily on the back of the company’s ability to leverage Selling, General and Administrative expense line. “This means that while our revenue grew at a certain rate but the overheads grew at a lesser pace,” he said, pointing out that there had also been a one-off tax item during 2007. The company sees new opportunities in areas such as collections, supply chain, India and China. “Our clients are increasingly focused on cash flow and cost containment. Genpact is well-positioned with solutions to address these needs,” he added.

For the fourth quarter 2008, the NYSE-listed company registered $281.8 million in revenue, up 22 per cent year-on-year. The net income stood at $47 million, up 51 per cent over the year-ago period. The net income margin for the fourth quarter was 16.7 per cent, up from 13.5 per cent in the same period previous year, while adjusted income from operations increased 24 per cent to $58.7 million in Q4.

Elaborating on the results, Mr Bhasin said the revenue growth was driven by balanced growth with existing global clients as well as growth with GE. Revenues from clients other than GE, (referred to as global clients revenues), grew 62 per cent over 2007.

Revenue per employee in 2008 rose $30,800 from $28,200 in 2007, reflecting a combination of higher value work being done for clients and the geographic mix, the company said.

As of December 31, 2008, Genpact had about 36,200 employees globally, an increase from 32,700 at the end of 2007. “We expect a 10 per cent growth in headcount during 2009 to touch 39,000-40,000 employees,” Mr Bhasin told Business Line.

Genpact’s attrition rate for the entire year, measured from day one of employment, was 26 per cent compared to 30 per cent in 2007. Genpact’s attrition rate would be 20 per cent if measured after six months of employment.

In 2008, 42 per cent of its revenues came from BFSI clients and another 42 per cent from manufacturing clients that included aircraft, infrastructure, automotive, and pharmaceuticals businesses. The remaining 16 per cent came from clients providing healthcare, retail, transportation and logistics, media and entertainment and hospitality services.

In 2008, approximately 80 per cent of Genpact’s revenues came from business process services, up from 76 per cent in 2007, while revenues from IT services were 20 per cent, reflecting the continuing industry softness in IT spending.

Genpact has about $385 million in cash and cash equivalents, short-term investments and short term deposits with GE.

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