Description
The PPT explaining about the Financial Analysis of Genpact.
Financial Analysis : EXL Services and Genpact
Highlights of EXL for the year 2007
• Employee base increased to 10,000 (2007) from around 8,200 (2006) • Business outsourcing in fields like financial Services, collection service and customer service • Currently has approximately 80 clients, of which Norwich Union and Centrica are largest together accounting for 51.7% of revenues • Enjoys Tax holiday in India till march 2009
2
Highlights of Genpact for the year 2007
• Employee base increased to 32,600 (2007) from around 26,000 (2006) • Genpact Limited was formed on 13 July 2007, prior to which holding company for all other group companies was Genpact Global Holding • Offered 17.65 million shares at a price of $14 which resulted in net proceeds of $233.5 million(August 2007) • GE accounted for approximately 58.5% of revenues in fiscal 2007 • Secured 70 new global clients since Jan 2005
3
HIGH LIGHTS OF FINANCIAL STATEMENTS
EXLS($)
Particulars
Cash Total current asset Net block Total Stockholder's equity Retained earnings Treasury stock Total Debt
Genpact (in ‘000$)
YoY % growth 19.73 27.51 17.16
2007
2006
2007
279,306 671,861 195,660
2006
35,430 242,900 157,976
YoY % growth 688.33 176.59 23.85
102,209,734 85,366,103 155,593,355 122,019,632 25,244,603 21,545,324
173,979,769 127,196,461 55,708,233 28,664,647 315,933 811,084 35,516 567,366
36.78 94.34 789.55 42.95
1,250,729 26,469 --128,692
624,695 5,978 49995 230,853
100.21 342.77 -100 -44.25
• Cash increase in Genpact due to IPO proceeds • Debt has been reduced as it has been repaid during the year
• Increase in treasury stock for EXL as shares has been bought back from Employees
4
Analysis of Cash Flow of Genpact and EXLS
Genpact (in $'000) Cash Flow From Operating Activities From Investing activities From financing activities Currency Fluctuation Opening Cash Balance Net Increase in cash Closing Balance 2006 36,568 -49,477 2,573 1,068 44,698 -10,336 35,430 2007 149,987 -115,279 181,155 28,013 35,430 215,863 279,306 YoY Change 310.16 133.00 6,940.61 2,522.94 -20.73 NA 688.33 EXLS(in $) 2006 2007 YoY Change 18.39 -25.29 -96.29 -7.42 252.16 -72.44 19.73 19,787,168 23,425,130 -12,000,516 -8,965,029 52,881,675 1,960,303 457,144 24,240,632 61,125,471 423,227 85,366,103 16,843,631
85,366,103 102,209,734
• • • •
in sales, current liability and in current assets caused major rise in cash operating profit in Genpact Cash from financing activities in EXLS as there was issue of common stock in previous year Cash from financing activities has drastically due to issue of shares Cash from operating activities is enough to meet the investing expenses this year for both Companies
5
Analysis of P&L account of EXL and Genpact
Genpact(in '000 $) 2006 Net Revenues 613,047 Cost Of Revenues 360,881 Gross Profit 252,166 EBITDA 132,837 EBIT 56,178 EBT 33,922 PAT 39,772 Net Profit for Distribution -10,568 Basic EPS -0.15 Diluted EPS -0.15 2007 YOY Growth 2006 822,684 34.20% 121,768,530 515,463 42.83% 73,837,337 307,221 21.83% 47,931,193 127,817 -3.78% 24,011,209 43,227 -23.05% 14,783,401 81,608 140.58% 16,112,870 65,065 63.59% 14,057,796 17,285 NA 13,440,467 0.13 NA 0.59 0.12 NA 0.58 EXLS($) 2007 YOY Growth 179,889,856 47.73% 113,720,195 54.01% 66,169,661 38.05% 27,719,908 15.45% 24,902,253 68.45% 29,152,751 80.93% 27,043,586 92.37% 27,043,586 101.21% 0.95 61.02% 0.93 60.34%
• EBT has
on account of Foreign Exchange Currency gain on account of New Clients
• Net Revenue
• Cost of Revenue has increase in salary
on account of increased Employee base and
•Dividends of $504,829 and $226,917 are no longer included in interest expense
6
Depreciation & Inventory Policy
?Depreciation & Amortization
• Depreciation followed on a straight line basis on a year on year basis • More of Amortization as they mostly have Intangible Assets
?Inventory Policy
• Service Sector Industry and hence they have no Inventory
Profitability ratios
42% 41% 40% 39% 38% 37% 36% 35% 34%
2007 2006
Gross Profit Ratio
•Fall in Gross profit ratio for both
Genpact EXLS
•High increase in cost of revenue •High salaries and number of employees
16% 14% 12% 10% 8% 6% 4% 2% 0%
2007 2006
Net profit ratio
Genpact EXLS
•Majorly attributable to increased revenues from Advisory Services •Increase in foreign exchange gain
8
Profitability ratios
14% 12% 10% 8% 6% 4% 2% 0%
2007 2006
Operating profit ratio
•EBIT fell for Genpact high depreciation and rising costs
Genpact EXLS
•High increase in sales led to rising profit
Return On Equity
20% 15% 10% 5% 0%
2007 2006
•On similar lines with ROI •PBT for Genpact is higher than PAT due to Foreign Exchange currency fluctuation
Genpact EXLS
9
Profitability ratios
16% 14% 12% 10% 8% 6% 4% 2% 0%
2007 2006
Return on Investment
•High net profit led to high ROI in EX
Genpact EXLS
•Issue of shares led to fall in ROI for Genpact
Debt equity ratio
•EXL is a low debt company •Fell for Genpact due to issue of share capital
10
Efficiency Ratios
4
Fixed asset turnover ratios
Genpact EXLS 2007 2006
3
2
1
0
• Goodwill taken into account for calculation •EXL efficient in handling their assets
30,000 25,000 20,000 15,000
10,000 Genpact EXLS
Business per employee
•Significant ratio for a Service Company
5,000 0
2007 2006
•Increase due high increase in sales
11
Solvency ratios
3.5 3 2.5 2 1.5 1 0.5 0
2007 2006
Absolute liquid ratio
GENPACT EXLS
•Improved highly for Genpact on account of IPO proceed •For EXL on account of increase in cash from operations
6
5 4
Current Ratio
Genpact
EXLS
3
2 1
•Increase EXL on account of increase in cash • For EXL on account of increase in short term investments
0
2007 2006
12
Market Performance
39 34 29 24 19 14 9
Earning Per Share(EPS)
• Genpact had a negative EPS due to loss
Genpact EXL
•Increase in EPS for EXL due to increased profits
4
-1 2007 2006
Price Earning Ratio (PE)
31 Dec 2006 Genpact EXL NA 35.8 31 Dec 2007 101.9 24.3 4 Sep 2008 109.4 18.9
13
Market Performance
•Genpact is co varying with the market •EXLS initially followed Nasdaq but later on it dipped
Source: EDGAR online
14
REFERENCES:
• Annual Report of Genpact Limited, 2007
•Annual Report of EXL Services, 2007
• http://www.nasdaq.com
•http://www.genpact.com
•http://www.exlservice.com
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doc_392906567.ppt
The PPT explaining about the Financial Analysis of Genpact.
Financial Analysis : EXL Services and Genpact
Highlights of EXL for the year 2007
• Employee base increased to 10,000 (2007) from around 8,200 (2006) • Business outsourcing in fields like financial Services, collection service and customer service • Currently has approximately 80 clients, of which Norwich Union and Centrica are largest together accounting for 51.7% of revenues • Enjoys Tax holiday in India till march 2009
2
Highlights of Genpact for the year 2007
• Employee base increased to 32,600 (2007) from around 26,000 (2006) • Genpact Limited was formed on 13 July 2007, prior to which holding company for all other group companies was Genpact Global Holding • Offered 17.65 million shares at a price of $14 which resulted in net proceeds of $233.5 million(August 2007) • GE accounted for approximately 58.5% of revenues in fiscal 2007 • Secured 70 new global clients since Jan 2005
3
HIGH LIGHTS OF FINANCIAL STATEMENTS
EXLS($)
Particulars
Cash Total current asset Net block Total Stockholder's equity Retained earnings Treasury stock Total Debt
Genpact (in ‘000$)
YoY % growth 19.73 27.51 17.16
2007
2006
2007
279,306 671,861 195,660
2006
35,430 242,900 157,976
YoY % growth 688.33 176.59 23.85
102,209,734 85,366,103 155,593,355 122,019,632 25,244,603 21,545,324
173,979,769 127,196,461 55,708,233 28,664,647 315,933 811,084 35,516 567,366
36.78 94.34 789.55 42.95
1,250,729 26,469 --128,692
624,695 5,978 49995 230,853
100.21 342.77 -100 -44.25
• Cash increase in Genpact due to IPO proceeds • Debt has been reduced as it has been repaid during the year
• Increase in treasury stock for EXL as shares has been bought back from Employees
4
Analysis of Cash Flow of Genpact and EXLS
Genpact (in $'000) Cash Flow From Operating Activities From Investing activities From financing activities Currency Fluctuation Opening Cash Balance Net Increase in cash Closing Balance 2006 36,568 -49,477 2,573 1,068 44,698 -10,336 35,430 2007 149,987 -115,279 181,155 28,013 35,430 215,863 279,306 YoY Change 310.16 133.00 6,940.61 2,522.94 -20.73 NA 688.33 EXLS(in $) 2006 2007 YoY Change 18.39 -25.29 -96.29 -7.42 252.16 -72.44 19.73 19,787,168 23,425,130 -12,000,516 -8,965,029 52,881,675 1,960,303 457,144 24,240,632 61,125,471 423,227 85,366,103 16,843,631
85,366,103 102,209,734
• • • •
in sales, current liability and in current assets caused major rise in cash operating profit in Genpact Cash from financing activities in EXLS as there was issue of common stock in previous year Cash from financing activities has drastically due to issue of shares Cash from operating activities is enough to meet the investing expenses this year for both Companies
5
Analysis of P&L account of EXL and Genpact
Genpact(in '000 $) 2006 Net Revenues 613,047 Cost Of Revenues 360,881 Gross Profit 252,166 EBITDA 132,837 EBIT 56,178 EBT 33,922 PAT 39,772 Net Profit for Distribution -10,568 Basic EPS -0.15 Diluted EPS -0.15 2007 YOY Growth 2006 822,684 34.20% 121,768,530 515,463 42.83% 73,837,337 307,221 21.83% 47,931,193 127,817 -3.78% 24,011,209 43,227 -23.05% 14,783,401 81,608 140.58% 16,112,870 65,065 63.59% 14,057,796 17,285 NA 13,440,467 0.13 NA 0.59 0.12 NA 0.58 EXLS($) 2007 YOY Growth 179,889,856 47.73% 113,720,195 54.01% 66,169,661 38.05% 27,719,908 15.45% 24,902,253 68.45% 29,152,751 80.93% 27,043,586 92.37% 27,043,586 101.21% 0.95 61.02% 0.93 60.34%
• EBT has
on account of Foreign Exchange Currency gain on account of New Clients
• Net Revenue
• Cost of Revenue has increase in salary
on account of increased Employee base and
•Dividends of $504,829 and $226,917 are no longer included in interest expense
6
Depreciation & Inventory Policy
?Depreciation & Amortization
• Depreciation followed on a straight line basis on a year on year basis • More of Amortization as they mostly have Intangible Assets
?Inventory Policy
• Service Sector Industry and hence they have no Inventory
Profitability ratios
42% 41% 40% 39% 38% 37% 36% 35% 34%
2007 2006
Gross Profit Ratio
•Fall in Gross profit ratio for both
Genpact EXLS
•High increase in cost of revenue •High salaries and number of employees
16% 14% 12% 10% 8% 6% 4% 2% 0%
2007 2006
Net profit ratio
Genpact EXLS
•Majorly attributable to increased revenues from Advisory Services •Increase in foreign exchange gain
8
Profitability ratios
14% 12% 10% 8% 6% 4% 2% 0%
2007 2006
Operating profit ratio
•EBIT fell for Genpact high depreciation and rising costs
Genpact EXLS
•High increase in sales led to rising profit
Return On Equity
20% 15% 10% 5% 0%
2007 2006
•On similar lines with ROI •PBT for Genpact is higher than PAT due to Foreign Exchange currency fluctuation
Genpact EXLS
9
Profitability ratios
16% 14% 12% 10% 8% 6% 4% 2% 0%
2007 2006
Return on Investment
•High net profit led to high ROI in EX
Genpact EXLS
•Issue of shares led to fall in ROI for Genpact
Debt equity ratio
•EXL is a low debt company •Fell for Genpact due to issue of share capital
10
Efficiency Ratios
4
Fixed asset turnover ratios
Genpact EXLS 2007 2006
3
2
1
0
• Goodwill taken into account for calculation •EXL efficient in handling their assets
30,000 25,000 20,000 15,000
10,000 Genpact EXLS
Business per employee
•Significant ratio for a Service Company
5,000 0
2007 2006
•Increase due high increase in sales
11
Solvency ratios
3.5 3 2.5 2 1.5 1 0.5 0
2007 2006
Absolute liquid ratio
GENPACT EXLS
•Improved highly for Genpact on account of IPO proceed •For EXL on account of increase in cash from operations
6
5 4
Current Ratio
Genpact
EXLS
3
2 1
•Increase EXL on account of increase in cash • For EXL on account of increase in short term investments
0
2007 2006
12
Market Performance
39 34 29 24 19 14 9
Earning Per Share(EPS)
• Genpact had a negative EPS due to loss
Genpact EXL
•Increase in EPS for EXL due to increased profits
4
-1 2007 2006
Price Earning Ratio (PE)
31 Dec 2006 Genpact EXL NA 35.8 31 Dec 2007 101.9 24.3 4 Sep 2008 109.4 18.9
13
Market Performance
•Genpact is co varying with the market •EXLS initially followed Nasdaq but later on it dipped
Source: EDGAR online
14
REFERENCES:
• Annual Report of Genpact Limited, 2007
•Annual Report of EXL Services, 2007
• http://www.nasdaq.com
•http://www.genpact.com
•http://www.exlservice.com
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doc_392906567.ppt