Genpact (G) up on strong customer base and acquisitions, Debt Ails – November 22, 2021

Genpact Limited‘s (g Free Report) have gained 14.4% in the past six months, outperforming the 12.4% increase in the Zacks S&P 500 composite. The company is currently capitalizing on its dominant presence in the BPO services market, its strong customer base and its strategic acquisitions.

Genpact recently released adjusted EPS of 66 cents for the third quarter of 2021, beating Zacks’ consensus estimate by 15.8% and up 18% year-over-year. Revenue was $ 1.02 billion, which topped the consensus estimate of 0.4% and increased 9% year-over-year.

How is Genpact doing?

Genpact is a dominant name in the BPO services market based on expertise in business analysis, digital services and consulting. The company is a leading provider of industry-specific solutions for the Industrial Internet of Things (IIoT), user experience, order and supply chain management, data engineering, digital content management and risk management, direct procurement and logistics services, after-sales service support, industrial asset optimization and engineering services. Genpact’s focus on integrating processes, analytics and digital technologies, along with its deep domain expertise, helps it win regular customers. We expect a growing customer base, tight cost control, strategic acquisitions and aggressive share buybacks to drive Genpact’s overall results over the long term.

Artificial intelligence (AI) presents a significant growth opportunity for Genpact. The Company’s Intelligent Digital Business Processes (Digital SEPs) are a patented approach to improving the performance of customers’ business processes. Digital SEPs reduce inefficiency and improve process quality using AI, advanced domain-specific digital technologies, Lean Six Sigma methodologies, and experience-centric principles. In addition, Genpact Cora is an automation-to-AI platform that combines the company’s proprietary automation, analytics and AI technologies into a single common platform and accelerates digital transformations of businesses. clients. Acquisitions such as Rage Framework and design thinking-based companies such as Tandem Seven have also expanded Genpact’s AI product portfolio. We believe Genpact is well positioned to take advantage of future improvements in AI.

Genpact enjoys a strong customer base all over the world. The company serves nearly a quarter of the Global Fortune 500, including big names such as AstraZeneca, Novartis, Bayer, Dentsu, AXA, Hitachi, Konica Minolta, Heineken, Santander, Synchrony Financial and Sysco. The company’s global customer base has improved rapidly over the past five years (2015-2020) with revenues growing at a healthy 10% CAGR to reach $ 3.3 billion in 2020. Global customers, as a percentage of total income, increased by about 81%. in 2015 to approximately 88% in 2020. We believe that Genpact’s expertise in providing BPO services will continue to expand the customer base in the long term.

Genpact’s cash and cash equivalents balance of $ 922 million at the end of the third quarter of 2021 was well below the long-term debt level of $ 1.3 billion, which highlights that the company is not not have enough liquidity to meet this debt burden. However, the cash level can cover the short-term debt of $ 383 million.

Zacks rank and actions to consider

Genpact currently wears a Zacks Rank # 3 (Hold).

You can see the full list of today’s Zacks # 1 Rank (Strong buy) stocks here.

Some top-ranked stocks in the broader business services sector are Budget Notice (AUTO Free report) and Cross Country Health Care (CCRN Free Report) with a Zacks Rank # 1, and Charles River Partners (CRA Free Report), carrying a Zacks Rank # 2 (Buy).

Avis Budget has an expected profit growth rate of 398.1% for the current year. The company has a surprise earnings for the last four quarters of 76.9% on average.

Avis Budget shares have jumped 673.8% in the past year. The company shows long-term profit growth of 27.5%.

Cross Country Healthcare has an expected profit growth rate of 397.8% for the current year. The company has a surprise of 75% on average over the last four quarters.

Shares of Cross Country Healthcare have jumped 236.9% in the past year. The company shows long-term profit growth of 21.5%.

Charles River Associates has an expected earnings growth rate of 61.2% for the current year. The company has a surprise earnings for the last four quarters of 51%, on average.

Charles River shares have jumped 135.7% in the past year. The company shows long-term profit growth of 15.5%.


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