The rating on Genpact Ltd. reflects our view of the company's exposure to the highly fragmented and increasingly competitive business process outsourcing (BPO) industry. It also reflects Genpact's significant segment concentration and high exposure to U.S.-based clients, whose outsourcing budgets and spending remain uncertain. In addition, we view a change in the company's financial policies to increase its leverage in an asset-light industry as a rating weakness. Genpact's good market position in finance and accounting services, higher value-added offerings, and stronger EBITDA margins compared with most peers' moderate these weaknesses. Intensifying competition in an already fragmented market characterizes the BPO industry. Competition comes from both domestic and international BPO service providers and larger integrated information technology (IT) players with growing
