Back to top

Image: Bigstock

AI Product Portfolio Aids Genpact (G) Amid Rising Talent Costs

Read MoreHide Full Article

Genpact (G - Free Report) is poised to capitalize on AI growth opportunities. The company is conducting acquisitions conducive to expanding its AI product portfolio. A decreasing current ratio and rising talent remain as concerns

Greported impressive first-quarter 2024 results. Quarterly EPS of 73 cents surpassed the consensus estimate by 5.8% and grew 7.4% year over year. Revenues of $1.13 billion beat the consensus mark by 2.1% and increased 3.9% from the year-ago quarter.

How is Genpact Doing?

The company is a pioneer in the BPO services market based on domain expertise in business analytics, and digital and consulting services. It is a leading provider of industry-specific solutions for the Industrial Internet of Things, user experience, order and supply chain management, data engineering, digital content management and risk management, and many more.

Genpact’s focus on integrating process, analytics and digital technologies, coupled with its deep domain expertise, helps it acquire customers regularly. We anticipate customer base expansion, strict cost-control policies, strategic acquisitions and aggressive share repurchase strategy to drive positive results in the long term.

The company witnesses significant growth opportunities on the AI front. Its Digital Smart Enterprise Processes (Digital SEPs) improve clients’ business process performances. AI, advanced domain-specific digital technologies, Lean Six Sigma methodologies, and experience-centric principles support Digital SEPs to reduce inefficiency and improve process quality.

Moreover, Genpact Cora, an automation to AI-based platform, combines the company’s proprietary automation, analytics and AI technologies under a single umbrella, and boosts clients’ digital transformations. Acquisitions like Rage Framework and Tandem Seven, have also expanded the AI product portfolio of the company.

In 2023, 2022, and 2021, Genpact repurchased shares worth $225.4 million, $214.1 million and $298.2 million, respectively. The company paid out $100 million, $91.8 million and $80.5 million in dividends to its shareholders in 2023, 2022 and 2021, respectively. Such shareholder-friendly moves point toward the company’s commitment to create value for shareholders and underline its confidence in its business.

Genpact's current ratio (a measure of liquidity) at the end of first-quarter 2024 was pegged at 1.54, lower than the year-ago quarter’s 1.84. A decreasing current ratio does not bode well.

Rising talent costs due to rising competition can pose a significant challenge to the industry’s growth. Genpact, being one of the leading companies in the industry, is expected to face negative consequences from such a rise.

Zacks Rank & Stocks to Consider

Genpact currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are Steelcase (SCS - Free Report) and Block (SQ - Free Report) .

Steelcase currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SCS has a long-term earnings growth expectation of 10%. It delivered a trailing four-quarter earnings surprise of 57.1%, on average.

Block presently flaunts a Zacks Rank of 1. It has a long-term earnings growth expectation of 33.4%.

SQ delivered a trailing four-quarter earnings surprise of 12.8%, on average.


See More Zacks Research for These Tickers


Pick one free report - opportunity may be withdrawn at any time


Genpact Limited (G) - free report >>

Steelcase Inc. (SCS) - free report >>

Block, Inc. (SQ) - free report >>

Published in