Genpact will spend $ 45 million this year on strategic investments and client-facing teams to add capabilities to help accelerate long-term growth of the US-based outsourcing services major.
During the January-March 2014 period, Genpact’s capital expenditure stood at about 2.2 per cent of the quarter’s revenues ($528.2 million). “We are positioning Genpact for accelerated long-term growth in the best way possible and we are making strategic investments through the four pillars of our strategy. These investments are expected to be approximately $45 million, or 2 per cent, of revenue in 2014,” Genpact President and CEO N V Tyagarajan said in an analyst conference call.
He added that approximately two-thirds of this is expected to be spent on client-facing teams, representing an increase from 4.7 per cent of revenue in 2013 to about six per cent in 2014. Tyagarajan said the four pillars of the firm’s strategy are to concentrate Genpact’s investments on specific market leadership opportunities, to enhance its domain expertise, to further differentiate its solutions and to deepen its client relationships.
“We are investing the remainder to bring key service line of capabilities. We expect these investments to ramp over the course of the year. We are funding a portion of these investments through productivity and cost discipline,” he said.Tyagarajan said these investments would continue through 2016 with diminishing impact on margins as revenue growth accelerates.
“We firmly believe these investments are the key to best position us for long-term accelerated growth. Thus, we continue to expect 2014 to be a pivotal year for Genpact,” he added.