Genpact ups the ante on 2009 growth

(By Anthony Miller). I didn’t know there was a contest as to who could guide for highest growth this year, but Genpact appears to think there is, trumping Cognizant’s guidance (see Cognizant signals 10% growth in 2009) with their bid for 10%-15%. Apparently, even this failed to meet market expectations, though it hasn’t affected Genpact’s stock, which is up 6% as I write.

It’s the core BPO side of the business (now 80% of total revenues) which is driving Genpact’s growth, with IT services hardest hit by the downturn. Nonetheless, CEO Pramod Bhasin is resolute in keeping IT services as part of the Genpact proposition, and we wholeheartedly agree. You just can’t do ‘transformational BPO’ without transforming the IT part of the process, so why give that bit to a partner if you don’t really have to?

On the local front, Genpact is rather coy about how much business it gets from Europe, but we think it’s around 10-15% of its now $1bn annual revenues, probably most from the UK. Europe is growing much faster than the rest of Genpact’s business – 35% last year vs 26% for the group. On that basis, their guidance suggests they expect to grow 20-25% in Europe this year, which would be a heck of a result, especially as we expect the UK BPO market – the most mature in Europe – ‘only’ to grow 8%. Clearly another offshore player to watch.