INTRODUCTION

Traces its beginnings to 1997, when under the name of GECIS; it was established as an independent business unit of GE Capital.

Genpact became an independent company in January 2005, enabling faster growth by reaching down to clients outside the GE family.

The company was listed on the NYSE in August 2007 under the trading symbol “G”.

Genpact has its head quarters at Gurgaon, Haryana, India.

Taking Business Processes to a

new level of effectiveness.

MISSION

Locations

Genpact has over 41,000 employees, has more than 35 operations in 13 countries,

and supports over 25 languages.

Genpact operates from Asia, Eastern Europe, Northern America, Australia and

most recently Africa.

Headquarters is in Gurgaon, Haryana

Solutions offered

Finance and Accounting

Procurement and Supply Chain

Collections and Customer Service

Human Resource Services

IT Infrastructure Services

Enterprise Application Services

Analytics & Research

Risk Management

Services

Reengineering

Healthcare Operational Solutions

Pharmaceutical Operational Solutions

Retail/Consumer Packaged Goods

Operational Solutions

Automotive Operational Solutions

Legal Services

GENPACT

BFSI

Healthcare Finance

Automotive HR

Retail Quality

Oil, Gas and Energy

Transition

Transport and

LogisticsLegal

Pharmaceuticals Training

Manufacturing

Electronics

Thought about in terms of back

office operations.

Business process management solutions designed to increase capital of financial institutions.

BFSI alone contributes to around 40% of the total revenues of

Genpact.

BANKING, FINANCIAL SERVICES AND INSURANCE (BFSI COE)

Solutions Offered

Retail banking

Commercial banking

Investment banking

Investment services and

wealth

Mortgage services

ORGANISATION CHART OF BFSI

Pramod Bhasin,

President & CEO

Tiger Tyagarajan,

Chief Operating Officer

Mohit Thukral

Sr. Vice President

BFSI

Abhinav Kapoor

Vice President,BFSI

Tathagupta Mallakar

Assist. Vice President

Rahul Malhotra

Assist. Vice President

Nishi Arora

Assist. Vice President

SWOT ANALYSIS

STRENGTH WEAKNESS

• Past association with GE

• Employee satisfaction

through growth

• Lowest attrition rate

• Best training provider

• Considered to be as a low

payer

• Communication gap between

superior and subordinate

• Dependence on GE

Opportunities THREATS

• SEZ areas provided by

government

• Upcoming clients

• Emergence of new

outsourcing fields

• Increase in Indian inflation

rate

• Appreciation of rupee

• Many competitors

FINANCIAL STATEMENT ANALYSIS

2009 2008 2007

Current Assets 847140 744,334 671,861

Current Liabilities 550169 854,533 492,737

Current ratio 1.54 0.87 1.36

Current Ratio In US $

Acid Test/Quick Ratio

Acid test/Quick ratio 2009 2008 2007

Current Assets 847140 744,334 671,861

Inventory 0 0 0

Prepaid Expenses 0 0 0

Quick Assets 847140 744,334 671,861

Current Liabilities 550169 854,533 492,737

Quick Ratio 1.54 0.87 1.36

In US $

Absolute liquid Ratio

Absolute Current

Ratio

2009 2008 2007

Cash 288,734 243,881 315,744

Short term

investments

132,601 146,560 75,058

Current Liabilities 550169 854,533 492,737

Absolute Current

Ratio

0.77 0.46 0.79

In US $

Debtor Turnover Ratio

Debtor Turnover Ratio 2009 2008 2007

Total Revenue 1,120,071 1,040,847 823,171

Net Receivables 309,254 297,032 222,651

Debtor Turnover Ratio 3.62 3.50 3.70

Average Collection

Period

100.78 104.16 98.73

In US $

Debt Equity Ratio

2009 2008 2007

Debt 547818 854533 492737

Equity 1199747 841793 1250729

0.46 1.02 0.39

Net Profit Ratio

2009 2008 2007

Net profit 161124 144349 81608

Total revenue 1120171 1040847 823171

14.38% 13.87% 9.91%

Trend of Revenue

2007 2008 2009

Total revenue 823171 1040847 1120171

%age Change 26.44% 7.62%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

2008 2009

%age change in Revenue

%age change in Revenue

Trend of Cost of Revenue

2007 2008 2009

Cost of revenue 482938 619231 672624

%age change in cost 28.22% 8.62%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

2008 2009

%age change in cost

%age change in cost

PART-B

RESEARCH PROJECT REPORT

BPO

Outsourcing is shifting a company’s essential operations to a third party vendor in order to gain various benefits including better services, low cost and speedy work.

Highlights of ITES – BPO performance in FY 09

According to Nasscom, the Indian ITES BPO market grew by over 18%.

Revenue totaled US $ 14.8 billion.

The ITES BPO employed 90,000 employees, the total head count now is 7.90,000.

ITES BPO revenues contributed 1% to India’s GDP and 4% of exports.

Technology and BPO generated 45% of total urban employment in India, BPO has created over a third of those jobs.

Source: Nasscom

Major BPO players in the Indian market

Genpact

WNS Global Services

Aditya Birla Minacs Worldwide

IBM Daksh

TCS BPO

Wipro BPO

First Source

Infosys BPO

HCL BPO

EXL Service Holdings

STUDY ON INFLATION TREND AND ITS IMPACT ON OVER ALL FINANCIALS OF

GENPACT

•To study the inflation trend in Indian economy.

•To analyze the effect on the cost drivers in

Genpact due to various factors.

•To know the effect on the profitability of

Genpact due to change in the total cost of the

company.

Statement of Objectives

Inflation

The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is

falling.

Measure of price inflation is the inflation rate.

The price level rises, each unit of currency buys fewer goods and services.

Inflation is a rise in the general level of prices of goods and services.

For example: As inflation rises, every rupee will buy a smaller percentage of a good. For example, if the inflation rate

is 2%, then a Re.1 pack of gum will cost Re.1.02 in a year.

Inflation Dynamics

In short-run inflation dynamics is largely dependent on supply and demand conditions.

Monetary expansion influences inflationary condition in the long-run.

Monetary expansion could be caused by persistence of high fiscal deficit.

High monetary growth could lead to continued excess demand for a prolonged period without matching increase in output and productivity.

Source: Central statistical Organization, Ministry of Statistics and Programme Implementation, Government of India

9

5.05.6

4.8

3.83.4

4.0

5.0

7.6

6.0

4.0

7.8

0

1

2

3

4

5

6

7

8

9

10

Urban Non-Manual Employees

Urban Non-ManualEmployees

Inflation for

Source: Macroeconomic and Monetary Developments - First Quarter Review 2009-10, Reserve Bank of India

Research Methodology

•Scope of Research: The research has been conducted in

Gurgaon at Genpact India and it includes all the members of

Financial Planning & Analysis team.

•Universe: The people dealing in the finance support team of

various BPO companies.

•Population : Total number of employees working in the

Finance Planning and Analysis team in BFSI in Genpact India.

•Research Design : Descriptive

•Sampling Frame: all the employees working in the

Finance Planning and Analysis (FP and A) team in BFSI

in Genpact India.

•Sample size: The number of elements considered and

included in the study is 15.

•Data Collection:

Primary data

Secondary data

Limitations of the Research

Only selected expenses are considered

for the study.

For year 2010, the data was converted on proportionate

basis to 12 months in

order to reach down to a

yearly figure.

The study considered

only the financials of BFSI COE of

Genpact,.

Revenue:

Production revenue

Transaction based billing

Fixed price contracts

FTE Based Billing

Others

Set up fee

Training fee

REALIZATION PER RGFTE: In simple words, it can

be defined as the contribution made to the total revenue by

each RGFTE employed by the company.

Realization per RGFTE = Production revenue

Production RGFTE Head count

Figure No. 4.1:- Trend of revenue per RGFTE.

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

2008 2009 2010

Production Revenue per RGFTE

Production Revenue per…

Expenses

SALARIES AND BENEFITS: While calculating salaries and

benefits, total of all kinds of salaries paid during the year is taken.

Cost Driver for salaries and benefits is the total Head Count of

the COE.

Salaries & Benefits per RGFTE = Total Salaries & Benefits

Total Head Count

Figure No. 4.2: Any significant deviation seen in the

cost during the contract period.

0

2

4

6

8

10

12

Yes No

No. of Respondents

No. of Respondents

Figure No: 4.3: Cost line that shows maximum

increase according to the team.

0

2

4

6

8

10

12

14

Salaries &Benefits

IT Infra Others

No. of Respondents

No. of Respondents

Figure No. 4.4: Trend for salaries per Head Count.

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

2008 2009 2010

Salaries per HC

Salaries per HC

Figure No. 4.5: Trend for Infra Expenses per seat.

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

2008 2009 2010

Infra per Seat

Infra per Seat

IT EXPENSES

Cost driver for IT expenses taken is SU, i.e. total number

of work stations being used at one time.

IT Expenses per SU = Total IT Expenses

Total Work Stations

Figure No. 4.6: Trend of IT Expenses per seat.

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

2008 2009 2010

IT per Seat

IT per Seat

OTHER EMPLOYEE COSTS:

1. Training

Recruitment

2. Other expenses

Cost Driver for other expenses taken is HC. Total of HC up to band 4

and band 5 is taken into consideration.

Other expenses per HC = Total Cost

Total HC (Band 4 & 5)

Figure No.4.7: Trend of other expenses per head count.

-40.00%

-30.00%

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

2008 2009 2010

Other per HC

Other per HC

Figure No. 4.8: Inflation charged in the accounts.

0

2

4

6

8

10

12

14

Yes No

No. of respodents

No. of respodents

Figure No. 4.9: Percentage of inflation charged in the accounts.

0

1

2

3

4

5

6

7

0-5% 5-10% 10-15% More than 15

No. of respondents

No. of respondents

Figure No. 4.12: Revenue, cost and inflation.

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

2008 2009 2010

Revenue

Cost

Inflation

FINDINGS

•The cost line that is majorly affected by the change in the

rate of inflation is salary and benefits that constitute around

60-65% of the total cost of the company.

•On an average company has inflation clause in nearly all

its accounts.

•Company is charging on an average an inflation rate of 5%

on fixed rate basis from its clients.

•The Company is doing fairly enough as far as overcoming

inflation is concerned by offsetting the overall effect of

inflation by deflating other cost lines such as infra expenses

and It expenses etc.

•There has been a decline in the revenue by 10% and the

cost has increased by 3.50%. Therefore, reducing the

overall EBIT earned by the company in 2010.

•India contributes 72% in the total operations carried on the

company as a whole.

If the inflation continues to rise at the same pace and

company continues to apply the cost cutting at the same

rate, the profitability of company has a huge possibility to

decline in the future.

SUGGESTIONS

•The company should try to control the attrition rate as

that lead to hiring of new employees at the market rate.

•There are some accounts where no inflation clause is

charged. Company should try to negotiate with the

clients in order to introduce an inflation clause.

•If possible, negotiations should be made that during the

contract period with completion of every year there

should be some increment in the inflation rate provided

to the company by its clients.

For example – if inflation for 1st year is 4% then for 2nd year

the rate should be increased to 4.5% or 4.25% or so.

•Company should try to control its internal cost such as cost

on infrastructure, information technology and so on.

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