Genpact Ltd. (G) is a Business Process Services provider—providing business process outsourcing (BPO) and IT services—mainly to financial services and manufacturing industries.  Its focus is on analytics, data management, and risk management services. Genpact began as a unit of GE in 1997, was spun-off in 2005 and listed on the NYSE in 2007.

Headquartered in New York, the company now has ~68,000 employees worldwide and global operations in 25 countries. With more than 800 clients, including more than 25% of Fortune Global 500, Genpact is one of largest analytics providers in their industry.

Solid Second Quarter Results and Upbeat Guidance

The company reported its second quarter results on August 5. Total revenue for the quarter came in at $609.5 million, up 9% year over year and up 11% on a constant currency basis. Adjusted income from operations was $100.6 million, up 15% from the same quarter a year ago.
 
Adjusted earnings were $0.30 per share (per Zacks calculations), beating the Zacks Consensus Estimate of $0.26 per share.
 
The management now expects 2015 total revenue to be in the range of $2.46 to $2.50 billion and adjusted income from operations margin to be in the range of 15.0% to 15.2%, a slight improvement from the initial outlook of approximately 15%.
 
Returning Cash to Shareholders
 
During the quarter, Genpact repurchased its common shares for a total of $68.1 million under its $250 million share repurchase program.
 
Industry Outlook Remains Strong
 
According to Genpact, Business Process Services industry is expected to continue to grow in low teens and reach ~$430 billion TAM (total addressable market) by 2019. The market has low penetration currently with no single market leader. They plan to capture high value opportunities through strategic investing in order to grow their market leadership.

Estimates Rising

As a result of continued solid performance, the Zacks Consensus Estimates for 2015 and 2016 have increased to $1.09 per share and $1.28 per share, up from $1.06 per share and $1.20 per share, 30 days ago.

Rising earnings estimates sent the stock to a Zacks Rank # 1 (Strong Buy).

The Bottom Line

In the current era of unprecedented market disruption, increasing regulatory oversight and all-time high shareholder activism, companies need to be nimble to transform and leverage new technology. This has created an opportunity for Genpact to grow their market leadership using their domain expertise.With a diversified client base of blue chip companies and favorable industry trends, the company seems to be well positioned to reward its investors.