G · Genpact
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $38.00
Note written ·
How this view changed
- · Rated Medium. Results, 5 November 2026: Q3 2026 ATS revenue rose 30.3% to $405 million versus the at-least-25% guide, with revenue, gross margin (38.0%) and adjusted EPS ($1.07) above guidance.
Price against the kill line
14.8% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $38.00, on record since 10 November 2026. The shares are up 30.1% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $38.00, which would sit under the 27 October 2026 close of $39.20 and erase most of the post-report gain. A cut to full-year revenue or adjusted EPS guidance, or ATS growth under 20% with Core Business Services declining, would also show the case failing.
Research onlyNot in the portfolio.
Key figures from the filings · Industrials
Quarter to 30 September 2026, filed 6 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 1,385
- Revenue, change on a year (%)
- +7.3
- Gross margin (%)
- 38.0
- Operating margin (%)
- 15.2
- Free cash flow, four quarters ($M)
- 357
- Net cash, cash less debt ($M)
- −675
- Price to earnings (×)
- 12.4
- Enterprise value to sales (×)
- 1.5
All filed numbers
What Genpact reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 1,385 | +7.3 | 38.0 | 15.2 |
| first filed | 1,343 | +7.1 | 36.5 | 14.4 |
| first filed | 1,296 | +6.7 | 36.4 | 15.3 |
| first filed | 1,319 | +5.6 | 36.6 | 14.8 |
| first filed | 1,291 | +6.6 | 36.4 | 14.8 |
| first filed | 1,254 | +6.6 | 35.9 | 14.3 |
| Pre-tax income ($M) | 197 |
| Net income ($M) four quarters: 589 | 152 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −3.7 |
| Operating cash flow ($M) | 429 |
| Capital spending ($M) | 72.2 |
| Free cash flow ($M) | 357 |
| Cash and short-term investments ($M) | 499 |
| Debt ($M) long-term debt | 1,174 |
| Net cash, cash less debt ($M) | −675 |
| Deferred revenue ($M) +33.4% on a year | 249 |
| Backlog, orders not yet delivered ($M) +33.4% on a year | 249 |
| Receivables ($M) | 1,622 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 2,709 |
| Market value ($M) | 7,293 |
| Enterprise value, market value plus net debt ($M) | 7,968 |
| Enterprise value to sales (×) | 1.5 |
| Enterprise value to operating income (×) | 10.0 |
| Price to earnings (×) | 12.4 |
| Price to book value (×) | 2.7 |
| Free-cash-flow yield (%) | 4.9 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 6.6% of shares outstanding sold short, 6.1 days of average trading to cover, +0.5% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $9.3M |
| 12 monthsfrom | $0 | $12.6M |
The thesis
Genpact's technology business is growing fast enough to lift the whole company, and the shares are more likely than not to beat the S&P 500 over the next three months. Advanced Technology Solutions (ATS) revenue rose 30.3% to $405 million in the third quarter of 2026, against guidance of at least 25%. The fourth-quarter and full-year 2026 report, expected in February 2027, shows whether that pace holds as the legacy services exits deepen.
Total revenue was $1.385 billion, up 7.3% (7.5% in constant currency), above the $1.369–$1.382 billion guided on 6 August 2026. Adjusted diluted earnings per share (EPS) were $1.07, up 10.3%, against guidance of $1.04–$1.05. Gross margin was 38.0%, against 36.6% guided (Genpact results release, Form 8-K, 5 November 2026).
ATS growth rose from 24.1% in the second quarter to 30.3% in the third. Needham, Susquehanna and Citigroup all raised price targets between 6 November 2026 and 9 November 2026. The shares closed at $43.13 on 12 November 2026, up 28.1% over three months and 11.3% below the 52-week intraday high. The published kill line has not been crossed.
Bullish and bearish views on Genpact Limited
The bull case on Genpact Limited (G), in brief: Technology growth accelerated. The bear case: legacy services are still 71% of revenue.
Bull case
- Technology growth accelerated. ATS revenue was $405 million in the third quarter of 2026, up 30.3% from a year earlier. In the second quarter it was $363 million, up 24.1%. Full-year ATS growth guidance stays at least 25% (Genpact release, 5 November 2026).
- Margin beat guidance. Gross margin was 38.0% against the 36.6% guided on 6 August 2026. The full-year outlook is a gross margin of about 36.9% and an adjusted operating margin of about 17.7% (Genpact release, 5 November 2026).
- Bookings keep building. On the 5 November 2026 call, management said 2026 agentic bookings should top $1 billion, more than five times the 2025 level. Genpact signed five large deals in the third quarter and 17 year to date, and more than half of cumulative agentic contract value came from new clients (MarketBeat call summary, 6 November 2026).
- Core services stopped shrinking. Core Business Services (CBS) revenue was flat at $980 million in the third quarter, better than the flat-to-slightly-down guide from 6 August 2026.
- Analysts raised targets after the report. Needham (Buy) raised its target to $55 on 6 November 2026. Citigroup (Neutral) raised its target to $44 on 9 November 2026. Susquehanna (Neutral) raised its target to $42 on 6 November 2026.
- Delivery footprint is expanding. Deccan Chronicle reported on 12 November 2026 that Genpact opened a Mars capability center in Hyderabad, India, with a workforce of more than 525.
Bear case
- Legacy services are still 71% of revenue. CBS was $980 million of the $1.385 billion in the third quarter, with no growth. Management said the dollar impact of the portfolio exit should be modestly larger in 2027 than in 2026 (call, 5 November 2026).
- Fourth-quarter growth slows. Management guided fourth-quarter revenue growth to about 7%, including more than 3 points of drag from the portfolio exit. Full-year revenue growth guidance stays at least 7%, so the report did not lift the revenue outlook (MarketBeat call summary, 6 November 2026).
- Cash conversion lags. Third-quarter operating cash flow was $93 million, held back by delayed invoicing and collections tied to an enterprise resource planning (ERP) system rollout. First-half 2026 operating cash flow was $48.9 million against net income of $293.7 million (Form 10-Q, 7 August 2026). Year-to-date buybacks and dividends total about $246 million.
- Price targets sit at the share price. Citigroup's $44 and Susquehanna's $42 targets bracket the $43.13 close on 12 November 2026. Both firms rate the shares Neutral.
- Insiders have sold into the rally. Director Carol Lindstrom sold 2,364 shares at $42.56 on 9 November 2026, and CEO Balkrishan Kalra sold 10,000 shares at $36.79 on 14 September 2026 (SEC Form 4 filings). Two senior vice presidents also sold in August. The sample is too small to support a conclusion.
Price setup
The shares closed at $43.13 on 12 November 2026, after a close of $43.60 on 11 November 2026. The close was $41.10 on 5 November 2026, the day of the report, and $33.86 on 14 August 2026, the three-month reference date. The 52-week intraday high is $48.64, set on 22 December 2025. The 52-week closing low is $27.50, set on 30 June 2026.
As of the 12 November 2026 close, the 50-day average is $36.94 and the 200-day average is $35.10 (adjusted closes). The shares trade well above both. A close above the 52-week high of $48.64 would show the market rewarding the faster ATS growth.
Catalysts ahead
- ~24 December 2026 (est.): Next quarterly dividend payment ($0.1875 last paid 24 September 2026). Tests whether cash flow and shareholder returns stay in balance after the ERP-related collection delays.
- ~12 February 2027 (est.): Fourth-quarter and full-year 2026 results. Tests the roughly 7% fourth-quarter growth guide and whether ATS growth holds above 25%; first look at the 2027 exit drag.
What would change the view
A daily close below $38.00, which would sit under the 27 October 2026 close of $39.20 and erase most of the post-report gain. A cut to full-year revenue or adjusted EPS guidance, or ATS growth under 20% with Core Business Services declining, would also show the case failing.
The risks this note tracks, each with what would confirm it:
- Technology growth fails to offset stagnant legacy services as portfolio exits deepen. Confirmed by: ATS growth below 20% in a quarterly report while Core Business Services revenue declines from a year earlier.
- Revenue growth slows as exits weigh more heavily in the fourth quarter and in 2027. Confirmed by: full-year 2026 revenue growth guidance cut below the at-least-7% outlook, or 2027 guidance showing larger exit drag than 2026.
- Cash flow fails to cover dividends and buybacks. Confirmed by: operating cash flow in the next two quarters stays far below net income after the ERP-related collection delays.
- The report is already priced in, with analyst targets clustered near the share price. Confirmed by: a fourth-quarter report with revenue growth at or below about 7% and ATS growth below 25%.
What it trades with
Genpact trades with business-process and IT-services peers and with software names exposed to AI-automation sentiment. Delivery is weighted to India, so the rupee-dollar rate and Indian tax rules affect reported margin. The shares' 52-week closing low of $27.50 on 30 June 2026 sits 36% below the current close, which marks how far the shares have moved since mid-year.
The evidence, claim by claim (8)
- Third-quarter 2026 revenue was $1.385 billion, up 7.3%; Advanced Technology Solutions revenue $405 million, up 30.3%; Core Business Services $980 million, flat. Genpact Q3 2026 results release (Form 8-K) · as of
- Third-quarter gross margin was 38.0% and adjusted diluted EPS $1.07, up 10.3%. Genpact Q3 2026 results release (Form 8-K) · as of
- Full-year 2026 outlook: revenue growth at least 7%, ATS growth at least 25%, gross margin about 36.9%, adjusted operating margin about 17.7%, adjusted EPS growth at least 13%. Genpact Q3 2026 results release (Form 8-K) · as of
- Third-quarter operating cash flow was $93 million, held back by delayed invoicing and collections tied to an ERP implementation; year-to-date buybacks and dividends about $246 million. Genpact Q3 2026 results release; MarketBeat call summary · as of
- Fourth-quarter 2026 revenue growth guided to about 7%, including more than 3 points from the portfolio exit; 2026 agentic bookings expected above $1 billion. MarketBeat Q3 call highlights · as of
- Needham (Buy) raised its target to $55 and Susquehanna (Neutral) to $42 on 6 November 2026; Citigroup (Neutral) raised to $44 on 9 November 2026. Benzinga analyst headlines · as of
- Director Carol Lindstrom sold 2,364 shares at $42.56 on 9 November 2026. SEC Form 4, filed 12 November 2026 · as of
- Form 10-Q for the quarter ended 30 September 2026 showed quarterly revenue of $1.39 billion against $1.29 billion a year earlier. SEC XBRL, Form 10-Q filed 6 November 2026 · as of
Sources
- SEC EDGAR
- MarketBeat ·
- Genpact Reports Third Quarter 2026 Results · finviz.com
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