Genpact Ltd. (G), Exlservice Holdings (EXLS) and WNS (Holdings) Ltd. (WNS) currently serve the end markets with the most demand in business services through their business process management services and business analytics, leading Manish Hemrajani, Executive Director and Senior Analyst at Oppenheimer & Co. Inc., to rate all three companies “outperform” in his business service coverage.
“Additionally,” Hemrajani says of these three companies, “they have very low exposure to discretionary projects; cater to strong demand for BPO services, especially in F&A and procurement; benefit from the continued secular trend of delivery mix shifting offshore; have high recurring revenue stream; and their contracts tend to be long-term, multiyear in nature.”
Hemrajani says G, EXLS and WNS have traditionally served the BFSI verticals, but they are now moving increasing their exposure to health care, one vertical where he expects meaningful growth. He says the transition from ICD-9 to ICD-10 is expected to translate into a meaningful amount of business.
“The differences between ICD-9 and ICD-10 are significant, and none of the payers or providers in the health care industry are ready for it with a deadline set for October 1, 2014, and that’s where the BPO vendors come in. So you’re going to see a meaningful growth coming from health care in this space. Some are touting it as the Y2K of health care,” Hemrajani said.
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