Genpact Limited (G) has reported a 19.71 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $77.11 million, or $0.38 a share in the quarter, compared with $64.41 million, or $0.30 a share for the same period last year. On an adjusted basis, earnings per share were at $0.43 for the quarter compared with $0.34 in the same period last year.
Revenue during the quarter grew 5.45 percent to $681.75 million from $646.53 million in the previous year period. Gross margin for the quarter expanded 143 basis points over the previous year period to 40.50 percent. Total expenses were 85.61 percent of quarterly revenues, down from 87.09 percent for the same period last year. This has led to an improvement of 148 basis points in operating margin to 14.39 percent.
Operating income for the quarter was $98.09 million, compared with $83.45 million in the previous year period.
However, the adjusted operating income for the quarter stood at $113.61 million compared to $95.62 million in the prior year period. At the same time, adjusted operating margin improved 187 basis points in the quarter to 16.67 percent from 14.79 percent in the last year period.
“We are pleased with our full year 2016 results, as we delivered strong Global Client BPO growth, expanded our adjusted operating margin and significantly grew our adjusted earnings per share,” said N.V. “Tiger” Tyagarajan, Genpact’s president and chief executive officer. “With that said, we are seeing heightened levels of volatility and uncertainty in the global environment. Now more than ever, enterprises need to be nimble and react quickly to compete in their respective markets. We believe our digital transformational services uniquely position us to drive value for clients. These consulting, digital and analytics services now account for approximately 20% of our Global Client revenues and collectively are growing significantly above our Global Client revenue growth rate.”
Genpact projects revenue to be in the range of $2,610 million to $2,680 million for financial year 2017. For fiscal year 2017, the company projects operating income to grow at 13.50 percent. For fiscal year 2017, the company projects adjusted operating income to grow at 15.70 percent. For financial year 2017, the company forecasts diluted earnings per share to be in the range of $1.32 to $1.36. For financial year 2017, the company forecasts diluted earnings per share to be in the range of $1.53 to $1.57 on adjusted basis.
Operating cash flow improves
Genpact Limited has generated cash of $345.77 million from operating activities during the year, up 5.60 percent or $18.33 million, when compared with the last year.
The company has spent $125.76 million cash to meet investing activities during the year as against cash outgo of $100.47 million in the last year. It has incurred net capital expenditure of $88.23 million on net basis during the year, up 45.38 percent or $27.54 million from year ago.
The company has spent $232.80 million cash to carry out financing activities during the year as against cash outgo of $218.88 million in the last year period.
Cash and cash equivalents stood at $422.62 million as on Dec. 31, 2016, down 6.27 percent or $28.28 million from $450.91 million on Dec. 31, 2015.
Working capital declines
Genpact Limited has witnessed a decline in the working capital over the last year. It stood at $495.68 million as at Dec. 31, 2016, down 17.47 percent or $104.91 million from $600.59 million on Dec. 31, 2015. Current ratio was at 1.68 as on Dec. 31, 2016, down from 2.01 on Dec. 31, 2015.
Debt moves up
Genpact Limited has witnessed an increase in total debt over the last one year. It stood at $897.33 million as on Dec. 31, 2016, up 12.45 percent or $99.37 million from $797.97 million on Dec. 31, 2015. Total debt was 31.09 percent of total assets as on Dec. 31, 2016, compared with 28.57 percent on Dec. 31, 2015. Debt to equity ratio was at 0.70 as on Dec. 31, 2016, up from 0.61 as on Dec. 31, 2015.
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