India-centric BP/IT services player, Genpact, signalled it is on track to grow revenues by 23-25% this year, after hitting 29% growth in Q2 (to 30th June). Mind you, almost half this growth came from its recent acquisition of US-based capital markets business process services (BPS) specialist, Headstrong (see Genpact takes Headstrong move to grow BFSI business), which was “neutral to adjusted operating margins” in the quarter. As such, ‘real’ operating margins were actually a tad higher yoy, at 12.8%.
Genpact is a classic example of a ‘BPO pure-play’ making the transition to full-line BPS. Recent acquisitions (see Genpact buys again) seem targeted to boosting its vertical-specialised platform-based propositions, which we see as the future of BPO. Indeed, ‘BPO pure-plays’ that don’t make this move will become increasingly irrelevant in the market, ceding share to the full line IT/BP services companies that can deliver a ‘transformational’ business process service top to toe. Our John O’Brien goes into more detail in his recent Business Process Services: UK Market Trends & Forecasts 2011 report.
By the way, Genapct has just opened its first South American operation in – you guessed it – Brazil. Initially a ‘follow-the-client’ jobbie for Astra-Zeneca, the Sao Paulo-based operation will serve as Genpact’s anchor point for other global clients’ Brazilian businesses and (nota bene) “the burgeoning Brazil-to-Brazil market”. As I keep on saying (see Brazil: Opportunity for some!), Brazil is all about the domestic market – it is not an ‘offshore/nearshore’ hot-spot.