Genpact Q3 net up 2-fold; lowers 2013 revenue guidance

NEW DELHI: Genpact said sales remained flat in September quarter compared to the three months before that and lowered its growth expectation for 2013. At $534.9 million, sales barely moved from the $534.8 million that Genpact has clocked in June quarter.

The company attributed muted growth to adverse impact of foreign exchange and slower pace of some business it gets from the United States. That the company is chasing larger outsourcing contracts, which take longer to close was also a reason according to the management.

“The three main drivers behind our lower-than-expected revenues were: foreign exchange headwinds impacting our non-U.S. dollar revenues significantly more than anticipated, continued reduction in our mortgage originations business related to softness in refinancing volumes in the US, and an increase in the value and proportion of large deals in our pipeline,” NV Tyagarajan, Genpact’s president and CEO. Genpact also lowered its full year sales forecast.

The company now expects 2013 sales to be between $2.12 billion and $2.13 billion — growth of 10.7% at the upper end of the range. Earlier the sales forecast was for $2.15-$2.2 billion implying growth of between 11.5% and 13.5% during the year.

In the last financial year Genpact had grown by 18.8%, marginally above its guidance. “The revenue from GE (largest client) has gone down which is a concern. Otherwise, the numbers could have been better,” said Pratik Gandhi of IDBI Capital.