Increased revenues from its global clients made India?s largest business process outsourcing (BPO) company Genpact exit the second quarter of 2011 with a 40% rise in its net income and 29% increase in the revenues. In an interview with FE?s Kirtika Suneja and Diksha Dutta, the BPO’s new CEO and president NV Tyagarajan explained that a combination of factors made this happen as all engines have fired.
What were the growth drivers this quarter?
Besides global client revenues, smart decision services including re-engineering, analytics, business consulting and enterprise risk consulting businesses and the acquisition of Headstrong made all the engines fire. Among the verticals, insurance, retail, pharmaceuticals and capital markets have performed well. A combination of all these led to the increase in revenues and net income.
How are the other verticals performing? Any plans of diversifying into newer verticals?
We just entered capital markets through Headstrong and there are almost 50 deals in the pipeline but it will take us 9-12 months to decide. We are sharpening the other verticals but healthcare is a strategic vertical for us. We are focussing on it by investing new talent and expertise there and building new client relationships.
With $336 million of cash, what are your inorganic growth plans?
We are looking at opportunities in all new verticals, risk analytics and smart decision services. We are very careful and methodical and will do an acquisition which has a good cultural fit with us.
You are investing in hiring top-level management for business development and other verticals. Will this effect your margins in the long term?
In the mid-term, we will continue to hire people and invest at the front-end in client markets. This will keep our margins flat at 16.5% for the same period. But, we are more focused at adding people to our thought leadership team. We have added 25 people at middle and top level, and will add another 30 people at the front-end. Even at the bottom of the pyramid, we have hired 9,000 people last year.
When you expand into different geographies, what proportion of locals do you hire?
We hire 99% local talent in other countries like the US, Europe, China etc. These employees also go through a global rotation process and get a chance to work in other countries as well. We believe in the local leadership model in various countries.
