Genpact Limited's (Genpact) 3Q 09 revenues came in as expected with modest y-o-y and q-o-q growth, led by an uptick in business from non-GE clients. Top-line performance was limited by the declining y-o-y and flattish q-o-q revenue growth from GE, which is a key client. Cost control measures adopted by the company to mitigate margin pressure arising from a mute business environment led the operating margin expansion in 3Q 09. However, high tax related expenses dampened reported earnings at net level. Management retained FY 2009 revenue guidance from 2Q 09, unlike its peer WNS Holdings, which raised guidance to the upper end of the previously guided range. Both the actions signal stability in the business environment. In addition, the company expects to effectively manage costs in order to boost margin and earnings expansion and has guided for higher adjusted operating income margin. At current levels we maintain our HOLD rating for Genpact’s NYSE common stock and will reassess our rating and our estimates in our next update report in the coming weeks. We had previously rated the Genpact European stock a SELL as we anticipated a negative currency impact from the depreciation of the USD against the Euro over the next 6-12 months. Although we continue to anticipate a negative currency impact, at current levels however, we upgrade the European stock rating to a HOLD until we reassess our rating and target price in our update report in the coming weeks.

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