Genpact eyes two buyouts this year

Genpact, India’s largest business process outsourcing (BPO) firm, has guided cautiously for the year, despite its belief that the US has bounced back. Mohit Thukral, senior vice-president, Genpact, spoke with Beryl Menezes about why the company is bullish on Europe and the healthcare vertical. Excerpts from the interview:

Despite a quarter-on-quarter growth, Genpact has cut its guidance for calendar 2013...
 While we guided for 16-18% last year, our dollar revenue growth was 16.5%. This year we have slightly reduced guidance to 15.8-16.3%, mainly due to the recent Jawood acquisition, and because we are still cautious on the overall environment, which is only slightly better than last year due to the US market bouncing back.

Genpact acquired a healthcare firm Jawood at a time when the vertical is seeing some softness...
For BPOs, healthcare is expected to be the highest growth vertical, going forward. We are expecting $50 million in revenues from Jawood. During the year, we are also hoping to close two more acquisitions in healthcare/pharma or in analytics. We expect the healthcare market in the US and India to explode in the next three years, which is why we have recently got into this vertical, and are expecting revenues from this segment to double in three years.

What about your biggest vertical, BFSI?
BFSI will continue to grow as fast as the company average that we have guided for, and we are seeing no softness there.

Most BPO firms have reported better growth from Europe. Is Genpact seeing similar trend?
US will continue to be our largest market, but a considerable improvement in deal flows from Europe in the last couple of quarters makes us confident of over 25% more growth in calendar 2013, as a contribution to Genpact’s overall revenues. In the next six months, we are also looking at opening a new centre in Poland or Romania.

Do you think shift from a traditional voice BPO to a non-linear model is a challenge for a BPO today?
Yes. While for younger companies, transformation to the cloud will be easier and faster, for larger, older companies that have to convert legacy systems to non-linear models it will be a huge investment – both monetary and time. However, while they may have to incur investments of $2 -50 million in upgrading their systems to the new platforms, this will make them future-ready and in a better position to tap new opportunities. Genpact has been consistently making transformational investments in the last two years, mainly through the acquisition mode.

What are the key differentiators for  Genpact?
There are three. The first one is that we are a people-centric organisation with huge investment in employee training and domain expertise. Second, we have also invested in process-effectiveness and process-excellence, supported by analytics in order to improve customer experience. Lastly, our strong domain knowledge and verticalised business offering with higher onshore talent hired for the same helps us be in a better position to garner the lion’s share of BPO business.