GlaxoSmithKline plc (NYSE:GSK), one of the leading pharmaceutical companies worldwide, extended the contract of Genpact Limited (NYSE:G) for five more years, to provide finance and accounting services.
Under the agreement, Genpact Limited (NYSE:G) will continue to provide business process management services, including accounts payable, record-to-report, and order-to-cash to support GlaxoSmithKline plc (NYSE:GSK)’s objective in implementing a standard core business process and services globally.
Paul Fry, senior vice president of Finance Service of GlaxoSmithKline plc (NYSE:GSK), stated that the company’s partnership with Genpact is a key element to achieving its goal to deliver simple, efficient and standardized business processes.
On the other hand, BK Kalra, senior vice president and business leader of Life Sciences for Genpact said, “Over the last six years, the partnership between Genpact and GSK has been able to address GSK’s growing global business and the unique challenges within the pharmaceutical market, while improving the outcomes of these end-to-end processes…”
In a research note to investors, analysts from Oppenheimer Equity Research noted that Genpact did not reveal the amount of its transaction with GlaxoSmithKline plc (NYSE:GSK), but they were encouraged the deal would provide positive results as the company demonstrated momentum in customer wins and renewals.
The analyst cited that Genpact has 600 clients including General Electric Company (NYSE:GE). According to the analysts, “Cross selling and growth from existing customers are the key growth drivers for the company. [Its] Top five clients accounted for just 13.5 percent of revenues in 3Q12, indicating a well-diversified and flattened client base.”
The research firm reiterated its outperform rating and $20 price target for Genpact due to the following reasons: improving growth/outlook profile with headstrong in the mix; strong global client momentum particularly in the $1-25M range; low discretionary contribution (~15-20%), and delivery mix shifting offshore.
The shares of GlaxoSmithKline (NYSE:GSK) were down 0.72 percent to $43.94 per share while Genpact Limited (NYSE:G) shares were up by 0.61 percent to $16.59 a shares after trading hours on Tuesday, January 15.