Currency fluctuations coupled with the European debt crisis have taken a toll on India’s largest business process outsourcing (BPO) company, Genpact, which posted a 6.3 per cent fall in its net income for the second quarter, ended June. However, N V Tyagarajan, Chief Operating Officer, tells Kirtika Suneja that despite these challenges, the company is looking out for expansions. Edited excerpts:
How big are the currency fluctuations and European debt crisis concerns?
Some foreign exchange volatility has been reflected in our margins and we also had foreign exchange losses of $4.8 million (Rs 22.5 crore) in the quarter. As for the crisis in Europe, there has not been much of an impact, as companies in Europe are keeping a watch on the environment. That said, we have seen some softness in the IT (information technology) business in Europe. Approximately 86 per cent of our revenues come from business process services, while revenues from IT services are 14 per cent. The revenue impact is around $3 million (Rs 14 crore) on our IT business outside GE, which is driven by European clients.
How is the relationship with GE shaping?
Revenues from clients other than GE, which we call global client revenues, grew 16.9 per cent and comprise 61.7 per cent of our total revenues. The remaining 38.3 per cent of revenues come from GE and that has increased 7.3 per cent from last year.
You generated $30 million (Rs 141 crore) of cash in the quarter. How do you plan to use it?
We are looking at Brazil and the West Asia and plan to set up a delivery centre in the former in six to nine months. There is a huge market for both global clients and local Chinese and Indian companies in Brazil. As of now, we have a little presence there, in places where the Brazilian languages are not required. We are looking at Sao Paulo and Tier-II cities in Brazil to set up the centre. We will also need a centre in the West Asia at some point of time.
What about acquisitions?
We are looking for companies in the areas of healthcare, banking, insurance, platforms and analytics.
How is your India business growing?
This business contributes less than five per cent to our revenues and on this small base, it is growing more than 100 per cent. We expect it to double every year.
There are reports of changes in the leadership and succession planning.
We are on a very strong growth curve right now and it is for the Board that takes these decisions at the appropriate time.
