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.

MISSION

Taking Business Processes to a new level of effectiveness.

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

Legal Services

Reengineering

Automotive Operational Solutions

Healthcare Operational Solutions

Retail/Consumer Packaged Goods Operational Solutions

Pharmaceutical Operational Solutions

BFSI Healthcare Automotive

Finance
HR Quality
Transition

Retail GENPACT
Oil, Gas and Energy Transport and Logistics Pharmaceut icals Manufacturi ng Electronics

Legal Training

BANKING, FINANCIAL SERVICES AND INSURANCE (BFSI COE)

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.

Solutions Offered
Retail banking

Mortgage services

Commercial banking

Investment services and wealth

Investment banking

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 Past association with GE Employee satisfaction through growth Lowest attrition rate Best training provider WEAKNESS Considered to be as a low payer Communication gap between superior and subordinate Dependence on GE THREATS Increase in Indian inflation rate Appreciation of rupee Many competitors

Opportunities SEZ areas provided by

government
Upcoming clients Emergence of new

outsourcing fields

FINANCIAL STATEMENT ANALYSIS

Current Ratio
2009 Current Assets 847140 2008 744,334
In US $

2007 671,861

Current Liabilities

550169

854,533

492,737

Current ratio

1.54

0.87

1.36

Acid Test/Quick Ratio

Acid test/Quick ratio Current Assets Inventory Prepaid Expenses Quick Assets Current Liabilities Quick Ratio 2009 847140 0 0 847140 550169 1.54 2008 744,334 0 0 744,334 854,533 0.87

In US $

2007 671,861 0 0 671,861 492,737 1.36

Absolute liquid Ratio

In US $ Absolute Current Ratio Cash 2009 2008 2007

288,734

243,881 146,560 854,533 0.46

315,744 75,058 492,737 0.79

Short term investments

Current Liabilities Absolute Current Ratio

132,601
550169 0.77

Debtor Turnover Ratio

In US $

Debtor Turnover Ratio Total Revenue Net Receivables Debtor Turnover Ratio

2009 1,120,071 309,254 3.62

2008 1,040,847

2007 823,171

297,032
3.50

222,651
3.70

Average Collection Period

100.78

104.16

98.73

Debt Equity Ratio

2009 Debt
Equity

2008 854533
841793 1.02

2007 492737
1250729 0.39

547818
1199747 0.46

Net Profit Ratio

2009 Net profit

Total revenue

2008 144349
1040847 13.87%

2007 81608
823171 9.91%

161124
1120171 14.38%

Trend of Revenue
2007 2008 2009

Total revenue
%age Change

823171

1040847
26.44%

1120171
7.62%

%age change in Revenue

30.00% 25.00% 20.00% 15.00% 10.00% 5.00%

%age change in Revenue

0.00%
2008 2009

Trend of Cost of Revenue

2007 Cost of revenue %age change in cost 482938 2008 619231 28.22% 2009 672624 8.62%

%age change in cost

30.00% 25.00% 20.00% 15.00% %age change in cost

10.00% 5.00%
0.00% 2008 2009

PART-B RESEARCH PROJECT REPORT

BPO

Outsourcing is shifting a companys 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 Indias 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

Statement of Objectives

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.

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

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

Measure of price inflation is the inflation rate.

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

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.

Inflation for
Urban Non-Manual Employees
10 9 9 7.6 5.6 4.8 3.8 3.4 4.0 6.0 7.8 Urban NonManual Employees 4.0

8
7 6 5 4 5.0

5.0

3
2 1 0

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

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,.

Transaction based billing Production revenue Fixed price contracts FTE Based Billing Set up fee Others Training fee

Revenue:

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.

Production Revenue per RGFTE
20.00%
15.00% 10.00% Production Revenue per 5.00% 0.00%

2008
-5.00% -10.00%

2009

2010

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.
No. of Respondents
12

10 8
6 4 2 0
Yes No
No. of Respondents

Figure No: 4.3: Cost line that shows maximum increase according to the team.
No. of Respondents
14
12 10 8 6
No. of Respondents

4
2 0

Salaries & Benefits

IT

Infra

Others

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

Salaries per HC
7.00%

6.00%
5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2008 2009 2010

Salaries per HC

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

Infra per Seat
60.00% 50.00% 40.00% 30.00% Infra per Seat 20.00%

10.00%
0.00% 2008 -10.00% 2009 2010

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.

IT per Seat
80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 2008 2009 2010 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.

Other per HC
60.00% 50.00% 40.00%

30.00%
20.00% 10.00% 0.00% -10.00% -20.00% -30.00% -40.00% 2008 2009 2010 Other per HC

Figure No. 4.8: Inflation charged in the accounts.

No. of respodents 14

12 10
8 6 4 2 0
Yes No
No. of respodents

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

No. of respondents
7 6 5

4
3 2 No. of respondents

1
0

0-5%

5-10%

10-15%

More than 15

Figure No. 4.12: Revenue, cost and inflation.

50.00% 40.00%

30.00%
20.00% 10.00% 0.00% 2008 -10.00% -20.00% 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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