Bhasin: Search mode

New Delhi, Nov. 9: Genpact, the country’s largest BPO, is scouting the market for an acquisition.

The company plans to buy small companies in finance and accounting, supply chain management, healthcare, analytics and captives.

“Over the last two years it has been difficult to predict growth and, therefore, hard to compute valuations. With markets improving now, valuations will get accurate, but we are still looking for a good target,” Pramod Bhasin, chief executive officer of Genpact, told The Telegraph.

Apart from India, the company is scouting around the US, Europe and China.

Bhasin did not divulge the size and time frame of the deal, but sources said companies in the range of $50-400 million were on the radar.

The NYSE-listed firm is also planning to buy out Citibank’s internal technology platforms in the country that are valued between $25-50 million.

Sources said Genpact could be in discussions with Citibank already for the platforms, used for delivering equity trading and asset management services. The platforms would come bundled with outsourcing contracts worth almost $350 million.

Genpact, which posted a 5 per cent increase in revenues for the quarter ended September 30, has close to $400 million in cash and cash equivalents, short-term investments and short-term deposits.

Meanwhile, the company reaffirmed its revenue guidance of 6-9 per cent growth in 2009 over the previous year and raised the adjusted operating margin guidance to 17.5-18 per cent.

In the last quarter, the company had raised the margin guidance to 17-17.5 per cent from the initial 16-17 per cent, saying it hoped to manage costs aggressively.

Genpact is also witnessing a higher demand in sectors such as banking and finance, consumer products and manufacturing.

Overall, there were many encouraging signs in the market, with client demand reviving and the deal pipeline getting stronger. Genpact added 19 clients in the third quarter.