SUMMER TRAINING PROJECT

PRESENTED BY:JAGMOHAN PARMARMBA 2C

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

Solutions offered

Finance and Accounting

Procurement and Supply Chain

Collections and Customer Service

Human Resource Services

IT Infrastructure Services

Enterprise Application

ServicesAnalytics & Research

Risk Management

Services

Reengineering

Healthcare Operational Solutions

Pharmaceutical Operational Solutions

Retail/Consumer Packaged

Goods Operational Solutions

Automotive Operational Solutions

Legal Services

GENPACTBFSI

HealthcareFinance

AutomotiveHR

RetailQuality

Oil, Gas and EnergyTransition

Transport and LogisticsLegal

PharmaceuticalsTraining

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 ThukralSr. Vice PresidentBFSI

Abhinav KapoorVice President,BFSI

Tathagupta MallakarAssist. Vice President

Rahul MalhotraAssist. Vice President

Nishi AroraAssist. 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%

2008 20090.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

%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%

2008 20090.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

%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

GenpactWNS Global

ServicesAditya Birla

Minacs WorldwideIBM Daksh

TCS BPO

Wipro BPO

First Source

Infosys BPO

HCL BPOEXL 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

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

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2007-08

2008-09

0

1

2

3

4

5

6

7

8

9

10

9.0

5.05.6

4.8

3.83.4

4.0

5.0

7.6

6.0

4.0

7.8

Urban Non-Manual Employees

Urban Non-Manual Em-ployees

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 expense

s are consider

ed 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 financial

s of BFSI

COE of Genpact

,.

Data analysis and Interpretation

Revenue:Production revenueTransaction based

billing

Fixed price contracts

FTE Based Billing

OthersSet 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.

2008 2009 2010

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

Production Revenue per RGFTE

Production Revenue pe...

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.

Yes No0

2

4

6

8

10

12

No. of Respondents

No. of Respondents

Figure No: 4.3: Cost line that shows maximum increase according to the team.

Salaries & Bene-

fits

IT Infra Others0

2

4

6

8

10

12

14

No. of Respondents

No. of Respondents

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

2008 2009 20100.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

Salaries per HC

Salaries per HC

Infrastructure Expenses:

• Rent• Utilities• Transport• Pantry

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

2008 2009 2010

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

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.

2008 2009 20100.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

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.

2008 2009 2010

-40.00%

-30.00%

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Other per HC

Other per HC

Figure No. 4.8: Inflation charged in the accounts.

Yes No0

2

4

6

8

10

12

14

No. of respodents

No. of respodents

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

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

0

1

2

3

4

5

6

7

No. of respondents

No. of respondents

Figure No. 4.12: Revenue, cost and inflation.

2008 2009 2010

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

RevenueCostInflation

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. 

www.genpact.com

THANK YOU