G - Genpact: Headcount Growth And AI Could Push The Price Up

2024-07-11 09:14:50 ET

Summary

• Genpact Limited reported a 9.7% increase in average headcount, new investments in sales and marketing, and operations in the growing global artificial intelligence market.
• The global artificial intelligence market is expected to grow at a CAGR of 36.6% from 2024 to 2030.
• In my view, with the AI target market growing, the company's net sales will most likely accelerate in the coming years.
• I think that the large deal ramp-ups and demand growth for financial crimes services could continue.
• In my opinion, the company appears to have sufficient financing to hire more employees and finance marketing campaigns to sustain future growth.

Investment Thesis

Genpact Limited ( G ) recently revealed an average headcount increase of 9.7% in the last quarter, new investments in sales and marketing to support growth, and operations in the growing global artificial intelligence market. For these reasons, and the current amount of cash in hand, I expect an acceleration in unlevered FCF from 2025 to 2029. I also think that the ongoing stock repurchases at current price levels, EPS growth expectations, and recent dividend increases could bring demand for the stock....

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