Genpact Posts 4% Rise In Q2 Profit, Lowers 2016 Revenue Outlook

New York: BPO major Genpact reported an about four per cent jump in net profit at $65.2 million for the second quarter that ended on June 30, 2016.

The US-based firm, which follows a January-December fiscal year, had posted a net profit of $62.7 million for the corresponding period a year ago, it said in a statement.

Its revenues rose 3 per cent to $630.5 million in the April-June quarter of 2016 from $609.5 million in the year-ago period.

Genpact has lowered its revenue guidance for the current fiscal year in the range of $2.59-$2.62 billion, representing a growth range of 5-6 per cent or 7-8 per cent on a constant currency basis.

This includes an assumed adverse foreign exchange impact of $41 million, almost all of which is reflected in global client revenue.

The company had earlier forecast its revenue for 2016 to be in the range of $2.62-2.66 billion, representing a constant currency growth range of 8-10 per cent.

"Genpact delivered steady second quarter results in an uncertain macro environment. Our Global Client BPO business continued to deliver strong performance," Genpact president and CEO N V Tyagarajan said.

He added that "challenging business conditions" in the investment banking and healthcare industries have led to cuts in discretionary IT spending that weighed upon its global client IT revenue in the second quarter and will impact its topline outlook for the full year.

Revenue from global clients stood at $521 million, up 5 per cent year-on-year, representing about 83 per cent of total revenues.

Revenue from GE was $109 million, down 5 per cent year-on-year, representing approximately 17 per cent of total revenues.

Total BPO revenue was $508 million, up 6 per cent on year, representing about 81 per cent of total revenues.

Cash from operations stood at $91 million in the second quarter of 2016, up 1 per cent from $90 million in the corresponding period of 2015.

For the 12-month period ended June 30, 2016, the number of client relationships generating annual revenue over $5 million increased to 104 from 102 as of June 30, 2015.

Genpact's employee attrition rate for the quarter was approximately 26 per cent, measured from the first day of employment, down from 29 per cent for the same period in 2015.