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Genpact (G)

Genpact (G)
Programmers cooperating at information technology company

Genpact got its start in 1997 as a business unit of General Electric (GE). In 2005, Genpact was hived off from GE. Two years later, it became a public company. And in 15 years, it’s grown its revenues from less than $500 million to $3.7 billion at the end of 2020. As a whole, business was good in 2020, with revenues up 6% excluding currency, and adjusted operating income rose 5% on the year.

Genpact Limited provides business process outsourcing and information technology (IT) services in North and Latin America, India, Asia, and Europe. It operates in three segments: Banking, Capital Markets and Insurance; Consumer Goods, Retail, Life Sciences, and Healthcare; and High Tech, Manufacturing and Services. The company also offers IT services, including end-user computing support, infrastructure management, application production support, database management services, and transformation services that include digital solutions, consulting services, and analytics services and solutions.

The stock plunged 7.1% since the earnings release on May 10, as the company‘s earnings guidance for 2021 was weak. For the full year, adjusted earnings per share are (EPS) currently anticipated in the range of $2.27-2.30 per share (previous guidance: $2.26-2.29 per share). Revenues for 2021 are expected to be between $3.93 and $3.99 billion.

The company generated $77.2 million of cash from operating activities, and capex was $12 million. Genpact returned $89.8 million to shareholders through share repurchases and $20 million through dividends in the quarter. You won’t get rich owning Genpact, but it will deliver reasonably consistent returns over the long haul.

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