UPDATE 2-Genpact sees longer sales cycles, disappointing 2011

Mon Feb 7, 2011 11:55am EST

* Q4 adj EPS $0.23 vs est $0.22

* Sees 2011 rev below expectations

* Shares up 3 pct (Recasts, adds conference call details, executive comment)

By Sayantani Ghosh

BANGALORE, Feb 7 (Reuters) - Genpact Ltd (G.N), a business process and technology services provider, said it continues to see longer client decision cycles and smaller deal sizes, and forecast 2011 revenue below expectations.

"Given the uncertain economy, companies have started breaking up large chunks of work into smaller chunks and doing it one after another to get faster payback," Chief Operating Officer N.V. "Tiger" Tyagarajan told Reuters.

Client decision timelines, especially for larger deals, have lengthened to 15 months in some instances, the firm which competes with WNS Holdings Ltd (WNS.N) and ExlService Holdings Inc (EXLS.O), said in a conference call. [ID:nWNAB9913]

The company hopes to bring down attrition levels to 25-28 percent in 2011 from 31 percent in 2010, and is planning a wage increase of 7-8 percent.

BY THE NUMBERS

For 2011, Genpact expects revenue growth of 10-13 percent, implying $1.38-$1.42 billion in revenue.

Analysts, on average, were expecting revenue of $1.43 billion for 2011, according to Thomson Reuters I/B/E/S. Fourth-quarter net income attributable to shareholders rose 33 percent to $46 million, or 20 cents per share. [ID:nASA00A4V]

Genpact was started in 1997 as the India-based business process services unit of GE Capital, General Electric Co's (GE.N) financial services business. GE, which spun off Genpact in 2005, remains Genpact's largest client and contributed 38 percent of its 2010 revenue.

The company expects GE to represent about 33-35 percent of its revenue in 2011.

Shares of Bermuda-based Genpact were up 3 percent at $15.73 in midday trade on the New York Stock Exchange. (Reporting by Sayantani Ghosh in Bangalore; Editing by Gopakumar Warrier and Joyjeet Das)

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