Good day, ladies and gentlemen, and welcome to the First Quarter 2014 Genpact Ltd. Earnings Conference Call. My name is Brittany, and I will be the coordinator for today. At this time, all participants are on a listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) At this time, I would now like to turn the presentation over to your host for today, Bharani Bobba, Head of Investor Relations at Genpact. Please proceed.

Thank you, Operator. Welcome to Genpact’s earnings call to discuss our results for the first quarter ended March 31, 2013. We hope you’ve had a chance to review our earnings release, which you’ll also find in the IR section of our website genpact.com. With me in New York today are Tiger Tyagarajan, our President and Chief Executive Officer; and Mohit Bhatia, our Chief Financial Officer. Our agenda today is as follows. Tiger will provide an overview of our results and address our progress and executing our new, more focused strategy that we reviewed at our recent Investor Day; followed by Mohit, who will discuss our financial performance in greater detail. Tiger will then have some closing comments. Finally, Tiger and Mohit will be available to take your questions. We expect the call to last about an hour. Please note that we’ve also included slides, which you can find on the webcast version of our call, and you’ll be able to download them after the call has concluded. Some of the matters we will discuss in today’s call are forward-looking. These forward-looking statements involve a number of risks and uncertainties and other factors that could cause actual results to differ materially from those in such forward-looking statements. Such risks and uncertainties include, but are not limited to, general economic conditions and those factors set forth in our press release and discussed under the Risk Factors section of our Annual Report on Form 10-K and other SEC filings. Genpact assumes no obligation to update the information presented on this conference call. In our call today, we’ll also refer to certain non-GAAP financial measures, which we believe provide additional information for investors and better reflect the way management views the operating performance of the business. You can find a reconciliation of those measures to GAAP, as well as related information, in our earnings release in the IR section of our website genpact.com. Please also refer to the investor fact sheet on the front page of the IR section of our website for further details on our results. With that, let me turn the call over to Tiger.

Thanks, Bharani. Good afternoon, everyone, and thank you for joining us on our call today. Genpact delivered growth in revenues, adjusted operating income, net income, and EPS in the first quarter of 2014. We believe the year is off to a good start with first quarter results tracking in line with our stated expectations for the full year. The quarter has been an active one as we move forward on a number of fronts. We held a well-attended Investor Day on March 6 to discuss our new more focused and concentrated investment and growth strategy. We continue to make progress and the execution of our strategy. One, we added domain and subject matter experts in our focused industry verticals, service line, and geographies. Two, we continue to add debt to our client management organization and are on track to reach our objective of investing 6% of our revenue on client-facing teams. Three, and we closed the large deal with a leading CPG client, adding domain expertise in core operations, end-to-end fulfillment, and customer management, a unique set of capability that we can leverage across the entire industry. Subsequent to the first quarter, we announced a strategic partnership with Oliver Wyman, a global leader in risk consulting, to build and take to market new end-to-end risk solutions for the increasingly regulated financial services vertical. We announced the acquisition of Pharmalink, which will add market leading domain expertise in the regulatory affairs space of life sciences another area of focus. And we successfully completed our $303 million share repurchase of approximately 17.3 million shares of Genpact stock at $17.50 per share. Other key highlights for the quarter were as follows; revenues increased 5% year-over-year and 7% in constant currency terms with Global Clients revenues increasing 7%. Four of our target verticals led…

Thank you, Tiger, and good afternoon, everyone. Today, I will review our first quarter performance, followed by a summary of key highlights on the balance sheet and statements of cash flow. We closed the first quarter of 2014 with revenues of $528.2 million, an increase of 4.8% year-over-year. Foreign exchange had an adverse impact on revenues in this quarter. Revenues increased 6.6% year-over-year in constant currency terms. First quarter revenues from Global Clients increased 7% year-over-year. Within Global Clients, business process management revenues increased 6%, while Global Clients IT services revenues increased 10%. GE revenues declined 3% as expected. Our overall business process management revenues increased 4%. Our overall IT services revenues increased 9% driven by growth in both Global Clients and GE, including the contribution from our February 2013 acquisition of JAWOOD. We continued to expand relationships with current Global Clients in 2014 across a range of our industry verticals. In the first quarter, clients representing greater than 5 million in annual revenue increased from 75 to 81 compared to last year. This include clients with greater than 15 million in revenue, increasing from 24 to 26 and clients with greater than 25 million in annual revenue increasing from 12 to 13. Adjusted income from operations totaled $86.4 million, an increase of $3.6 million from the prior year. This represents the margin of 16.4% same as the first quarter of 2013 as the impact of investments and wage inflation was offset by higher operating efficiencies and favorable foreign exchange. We expect our margins for the balance of the year to be lower than the first quarter level, as we continue to drive investments and due to the timing of our hedge risk across the quarters. Our sales and marketing expense as a percentage of revenue this quarter was approximately…

Thank you, Tiger. We would like to open it up for Q&A at this time. Operator can you give the instructions.

Thank you. (Operator Instruction) And your first question comes from the line of Joseph Foresi with Janney Montgomery Scott. Please proceed. Joseph D. Foresi – Janney Montgomery Scott LLC: Hi. My first question here is, are there any other measurable pieces on the strategy side that you’re looking at internally, you’d like to share with us, I mean outside of the sales team that points towards some of the progress that you’re making either quantitatively or qualitatively?

So, Joe, as we discussed during the Investor Day, I think one of the core metrics that we are bringing together and we’ll start sharing towards the end of the year are bookings. As you can imagine, as we bring these sales teams and domain experts together and integrate them and they start building a pipeline then ultimately it’s translation into booking is the real metric that is important, and finally, that booking is getting converted into revenue. So I would say the core metric right now is the actual investments we are making and then subsequently and we believe that will be at the end of the year, they will be bookings. Joseph D. Foresi – Janney Montgomery Scott LLC: Okay. And then out of the 21 salespeople, it sounded like some of those pieces were shifting around there. What’s your net sales team look like at this point? What’s – what did they look like before and will those 21 people have an impact in 2014?

So let me answer the second part first, which is 21 salespeople in terms of an impact on 2014, as I said, would be limited given that we typically expect salespeople to start becoming productive only after a 6-month to 9-month buildup of the pipeline. And even that productivity would be in short cycle, reengineering, consulting our analytics type of quick decision engagements. So the true impact of salespeople additions will take anywhere up to 18 months to start showing up through bookings and then subsequently into revenues. To go back to your first part of your question, that 21 salespeople are fresh hires into the company, but that’s just one part of the equation. A big part of the equation in Q4 of last year and in Q1 of this year was actually our reallocation of sales teams out of our non-focused particularly geographies, into our focused service lines, geographies, and verticals. And that about 65%, 70% of that is pretty much complete. And the other thing that we’ve done is also churned out as we brought in some of these salespeople into key client relationships and client partner roles to churn out some of the earlier people who are managing these relationships and typically these are operating people back into the operating teams. So, I think the right way to think about this is – this is a combination of net ads churns from deprioritized to prioritized areas and churn out from the sales team of people who probably rightfully now belong into the operating teams. Joseph D. Foresi – Janney Montgomery Scott LLC: Got it. Okay. And then last one for me. We’ve heard reasonably positive commentary regarding the environment from some of your competitors this quarter. Have you seen any change on the demand environment? I know you talked about large deals sort of being at the same pace they were before. But have you seen any change heading into this year?

I would say. Joe, that the change that we saw actually started more in the second half of last year, in terms of the large transformative deals that we started seeing. And we attributed that both to the macro environment in many of these areas where clients actually wanted to engage in those transformative conversations that had long-term impact in the way they run the business, as well as are getting ready and are having the right people to have those conversations. We continue to see that progress. So I would be one of the – on the same campus saying, the macro environment does seem to continue to progress in the direction of adding more such conversations and deals to the pipeline. And that spread across almost everyone of the vertical markets that we are focused on, it spread across a broad range of the service lines we’re focused on. And interestingly spread across all our chosen geographic markets and that includes Japan and Australia apart from obviously North America and Europe. Joseph D. Foresi – Janney Montgomery Scott LLC: Thank you.

Thank you.

And your next question comes from the line of Rahul Bhangare with William Blair. Please proceed. Rahul S. Bhangare – William Blair & Company L.L.C.: Hi, thanks for taking my questions. Tiger, just a follow-up on these sales hires. Where the 21 sales hires all during the quarter, if not, what time period was that over, and should we view that number as kind of halfway toward the stated goal, I believe during your investor day, of roughly 15 new hires?

So I would say it’s probably in terms of hires and remember these are hires, and these are draft hires. And then you got to take into account the fact that you actually would have churns, particularly in the early part of the year when we move people out into roles that they are better suited for, as well as churns, as I said from de-prioritized to prioritized areas. So the way I would think about these hires is probably 20% to 25% of the total hires for the year, and that’s the way we have staged this through the year. So that’s probably the right way to think about it in terms of the staging of these hires through the year. Rahul S. Bhangare – William Blair & Company L.L.C.: Okay, thanks. And then regarding and in regards to the large deal, the large CPG deal, can you give us a sense for how large it is, and how long it’s been in the pipeline, and if it was salesforced?

It is broadly salesforced, yes. It was a conversation that started 18 months back. There is a conversation that has teed up for us. And that is the nature of a number of these deals that are transformative in our chosen areas. We would count this as one of the largest deals we’ve done. When fully ramped up, it will add at least 1% to the revenue of the company. Rahul S. Bhangare – William Blair & Company L.L.C.: Great. Thank you.

Yep.

The next question comes from the line Bryan Keane with Deutsche Bank. Please proceed. Bryan C. Keane – Deutsche Bank Securities, Inc.: Hi, guys, just a follow-up on that. When does the CPG deal start and then when does it ramp up to its full utilization, full capability?

Bryan, it will ramp up through this year, most large deals don’t ramp up in a short timeframe, this one actually does. But remember, this one we’ve been working on and actually we had expected to close this last year and for a variety of reasons and given the complexity of the deal itself, it took longer to close. So we had assumed and we had planned for its closure in the first quarter and we actually are glad that it did. So to ramp up during the scale itself, normally a deal of this size and this complexity, once closed we will take at least 18 months to ramp up. Bryan C. Keane – Deutsche Bank Securities, Inc.: And when does it start, has it started already?

It has started, yes. Bryan C. Keane – Deutsche Bank Securities, Inc.: And just thinking about the revenue, it kind of came in right in the middle of your guidance for the full year. Should it be pretty balanced, the growth rates throughout the year, or should we see any drop or pick up in growth rates as we go into Q2 and Q3 and beyond?

I think it will be broadly balanced through the year. But like most of the years, the second half will be a little better than the first half. Also, if you remember, part of the first half headwind that we are working against is the mortgage headwind that is more acute in the first half and emerging market Forex headwind, which is also more acute. As we get to the second half, that stops becoming much lesser, and so we will see a little bit of a higher growth rate in the second half and in the first half. Bryan C. Keane – Deutsche Bank Securities, Inc.: And then just looking at the margins, I think you guys did 16.4% adjusted operating margin, and we were expecting something kind of more in the range of the full year guidance. I guess the first question was, did you expect it to be ahead to start, and then the second question is, if you could just break out and quantify the impact from investments and wage inflation and any kind of hedgings or FX on the margin?

Well, so let me answer the first part Bryan, and then I’m going to turn it to Mohit. This is actually exactly as we had expected. We had expected margins to start off around this mark, and then as we go through the year, we expect the margins to come down as we ramp up investments. The sales investments you talked about the client-facing investments, the domain expert investments, as well as, as some of the large deals begin their ramp up journey, all of that put together would lead us to have a margin trajectory that is downward sloping in order to lead us to the 15 and 15.5. Mohit, you want to answer the second part?

Yes. So operating efficiencies and favorable foreign exchange also contributed to the 15.4% that we reported. However, it was an expected. As you are aware, we hedge mid to long-term, so we have – we know proactively what our hedges are going to be in a certain quarter as we did for the first quarter of 2014. And because these hedges were better in the first quarter of last year, there was a favorable contribution apart that we had already planned for an expected. We do not disclose our hedge rates for competitive reasons we never have, so why I can’t help you quantify the impact of foreign exchange. You asked about wage inflation, wage inflation was normal in the range of approximately 6%, and that will again as planned and taken into account for the 16.4% in the quarter. Bryan C. Keane – Deutsche Bank Securities, Inc.: And then just lastly on investments, is there way to quantify that?

The investments – we spoke about investing about $45 million across the year. In the first quarter, we had not planned to spend a whole lot of that $45 million. The investments are going to pickup sequentially with every quarter. In the first quarter, we made the investments as planned, and quarter two, quarter three, and quarter four, we will see a sequential increase in these investments through the course of the year. We still expect to meet the $45 million annual investment that we have stated earlier.

Yes. And Bryan, two other points to that as we invest in these client-facing leaders in the markets, as well as domain experts, the investments that we make in the first quarter then stays with us as investment through the year. So, by definition, if you look quarter-by-quarter, every quarter will be a build-up on the previous quarter automatically. Second, there are few investments that are not people investments and example would be technology licenses, marketing expenses and those tend to more event-based, and those are more in the later part of the year then on the first part of the year particularly marketing, which tends to be a very low first quarter always. Bryan C. Keane – Deutsche Bank Securities, Inc.: Okay, thanks for the details.

Thank you.

And your next question comes from the line Tien-Tsin Huang with JP Morgan. Vineet Seth – JPMorgan Chase & Co.: Hi, this is Vineet filling in for Tien-Tsin. Tiger, could you comment on pricing environment, some concerns over pricing and industry. Have you seen any impact from currency on prices?

Vineet, pricing is competitive, it’s a no-brainer. It is competitive. On large deals, while it continues to be competitive, given the nature of those large deals. The reality is that they’re only a few competitors, who could play in the complex global large deal transformative arena. So, it does make it a little difference. On foreign exchange look when a contract comes up for renewal, obviously that is one of the variable that’s get discussed. As you know and our clients know, when we sign contracts, we hedge our contracts for the long-term of that contract. So, with that extent it’s really become the discussion when the contract comes up for renewal. And I think it’s a fair discussion, so it’s competitive, it obviously means we have to continue to find ways regard productivity and value for our clients, but it’s not that different from what it’s be. Vineet Seth – JPMorgan Chase & Co.: Understood. And given you had many of such large deals the late last year, but the pipeline was strong. So, should we expect more of those deals coming through this year or will have to replenish your pipeline?

We are replenishing the pipeline as I given, we have to keep replenishing our pipeline as the deals continue through the pipeline and decisions get taken and we win a fair share of them. We expect as we go through the year to continue to win a fair share of these big deals. We resume that and that’s our plan. But as we win them, as I said most of these big deals would lead to ramp up over the subsequent 18 odd months and that’s the nature of these big deals and that’s why they are complex. There are a few exceptions and I think the exception of the first deal that we closed in the first quarter that I talked about, but otherwise most of them would be a long ramp. Vineet Seth – JPMorgan Chase & Co.: And housekeeping question for Mohit. Did you talk about growth rate in small business services?

No, we didn’t touch on the growth rate for small business services, but I can give you some color right now. So, our total growth on SBS was approximately 9.5% this quarter, which was close to 11% of those clients. Vineet Seth – JPMorgan Chase & Co.: Thanks.

And your next question comes from the line of Ashwin Shirvaikar with Citibank. Please proceed. Ashwin Shirvaikar – Citigroup Global Markets Inc.: Thanks. Hi, Tiger, hi, Mohit.

Yes, hello Ashwin Shirvaikar – Citigroup Global Markets Inc.: So, I guess I wanted to start with talking about GE down 3%. Was that at least based on your comments, was better than I expect, is looking for more like down 5%, is it supposed to get worse as the year progresses, particularly with GE, you tend to give your productivity upfront, and then get volumes afterwards, is there something different for GE going through this year?

So, I certainly, this is more little bit of one quarter versus another, so I don’t think we should read too much into this. We still think the year looks like the way we are characterize it for the full year. Also part of the discussion we had on GE was the fact that we serve a number of the GE capital businesses and as those businesses continue to re-orient themselves in terms of total size, the amount of work that we do will get resized and that’s the plan for the full year and that’s how the year’s plan has been worked out We think the first quarter number is exactly what we kind of thought it would be in order to lead us to the full year number. Ashwin Shirvaikar – Citigroup Global Markets Inc.: Okay. And as I think of, you obviously laid out what looks like from this point on low single-digit sequential growth in revenues, it looks like, and margins going down. The endpoint for margins has got to be obviously below that 15%, 15.5% range, right? In order to get mathematically to the numbers. So I’m kind of wondering when do you expect that low point to be reached?

That’s a very specific question Ashwin on a quarter-by-quarter basis. I think the lots of puts and takes that happened on a quarter-by-quarter. I would say that investments will ramp through the year and will pick in the fourth quarter. Having said that, obviously our revenue also continues to grow, as we go through from the first quarter to the fourth quarter. So, I think there are lots of puts and takes that can happen, specifically from one quarter to another. And as you know in this business, one quarter versus another quarter is not necessarily the right way to think about this business it is a long cycle business. So, but I would say – it will be investment trajectory will be a ramp the year that’s probably the best and the most specific answer that I can give. Ashwin Shirvaikar – Citigroup Global Markets Inc.: How about if you were to look a little bit beyond this year? Would you expect that cycle to be the worst next year basically?

Too early to say now, Ashwin. All I can say is that as we continue our journey into next year, we expect Global Clients revenue to continue to move up. And as that moves up, our investment in terms of its impact on margins will reduced. And therefore our margins should start moving backup, but I would hesitate to actually put a number right now just at the beginning of this year itself. Ashwin Shirvaikar – Citigroup Global Markets Inc.: Okay, got it. Thanks.

Thanks, Ashwin.

And your next question comes from the line of Edward Caso with Wells Fargo. Please proceed. Edward S. Caso – Wells Fargo Securities LLC: Thanks. Can we categorize the CPG transaction as a captive buy in a way? Are you just taking over operations? Is that why you’re able to ramp it quicker?

You got it right Ed, it is a good way to characterize it so, but it has many other elements to it, but that is one portion of it, which is a very important portion. Edward S. Caso – Wells Fargo Securities LLC: On a bigger picture basis, are you getting more pressure from your clients to do more with technology and automation and tools, and less with just throwing talented but inexpensive bodies at the equation? Is there a stepped-up pressure there, whether it’s from the client or whether it’s just necessary from a price point to do that?

I would say, Ed, it’s actually that one is a great question. I would say we often tee it up ourselves. We often go to a client. And I’m part of some of these discussions, where we put on the table a different way to think about their journey that they’re thinking about and that includes automation, new tools, going to the cloud directly in processes that they should be comfortable to get that. Convincing them that actually it is perfectly fine to run specific processes they’re talking about on the cloud, often a private cloud. So, automation, robotics taking processes to the cloud and building analytics around those processes in the cloud that becomes bigger idea on the globe. I would say client pressure is one way to think about it, but smart providers are those that actually take those conversations to the client even before the client brings it up. Edward S. Caso – Wells Fargo Securities LLC: Great. Last question. I see the non-cash stock comp is down both quarter on quarter, meaningfully so, but also year over year. How should we interpret that?

: Edward S. Caso – Wells Fargo Securities LLC: And the expectation for the full year and non-cash stock comp?

The full year estimate should be $28 million and 29 million. Edward S. Caso – Wells Fargo Securities LLC: Thank you very much.

And your next question comes from the line of George Tong with Piper Jaffray. Please proceed. George K. F. Tong – Piper Jaffray & Co: Hi, thanks for taking my questions. I would like to get a sense for what the average deal size is in your pipeline, whether you’re seeing larger deals on a year-over-year basis from the year ago period. Along similar lines, any qualitative observations of recent bookings, are they more strategic? You talked about your transformative engagement in the consumer package goods in the vertical. Any others that you would highlight?

So, George, average deal sizes is not the way we would look at our deals in the pipeline, and the reason for that is average is hide a lot, as we all know. So, we would tend to look at for different types of services in different industries or those deal size is changing and are those averages going up. So, as an example our typical finance and accounting transaction and that transformative engagement with a set of plans and a set of verticals of a certain size is that going up and the answer is yes. Our typical back offices of financial services are those bit large financial institutions and insurance companies are those going up. The answer is yes. On the other hand, our analytics deals on those prices also going up. The answer is yes, but those deals are actually much smaller, but they are going up inside as well. My thought of that is also because we are bundling them more into our services, bundling it with technology et cetera. So, we would think about average more in the context of specific types of deals, and by definition, because we have many more transformative deals in our pipeline, the overall average will be does go up and as gone up. George K. F. Tong – Piper Jaffray & Co: That’s very helpful. And then could you help provide some numbers around your recent strategic partnership with Oliver Wyman, and how much revenue contributions you expect from that?

So, George it’s too early to put a number for this year. It’s a long-term strategic partnership and the idea is to actually build end-to-end risk solutions that start with design, and architecting and consulting on very complex risk issues that the banks and financial institutions are dealing with across the globe, right through to the end of actually delivering it on a day-to-day basis, delivering analytics so on and so forth. Something we’ve done in our history a lot. This is much more of the longer term play in a service that we think is going to be very, very critical for the long-term and hugely under penetrated on a demand that is going to keep increasing overtime. We think that market is anywhere from $2 billion to $4 billion in size and that’s going to keep increasing, given all the regulatory stuff that’s happening across the globe. This could be a mini F&A finance and accounting 5-year to 10-year horizon. that’s the way he would think about it. George K. F. Tong – Piper Jaffray & Co: That’s very helpful, thank you.

Thanks, George.

And there are no further questions in the queue at this time sir.

Thanks, everyone for joining us on the call today and as always Tiger, Mohit and I’ll be able to further questions post the conclusion of this call. Thanks again.