Genpact Limited’s Review by Deutsche Bank

Deutsche Bank analysts provided their views on Genpact Limited (NYSE:G), noting that the company’s management believes that Genpact’s resilient business model will shine in an economic downturn.

Over the last 3 months, the IT Services environment has made a remarkable pivot with the Fortune 500 becoming more cautious and focused on cost control vs taking down growth initiative budgets. Genpact’s softer Q4/22 revenue guidance of mid-single digits does not seem overly conservative given the lack of budget flush or license reseller work, but given Genpact’s visibility and bookings momentum, the analysts believe 7-9% total revenue growth is achievable in fiscal 2023 (even in a weaker economic environment).

Additionally, the company is confident it should still be able to achieve margin expansion in 2023 and 2024 and, as a result, the analysts raise their adjusted operating margins by 20bps year-over-year in both years, resulting in higher EPS in 2023 by $0.02 (to $3.00) and 2024 by $0.06 (to $3.35).