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INVESTMENT CONCLUSION:
We caught up with BPO industry analysts NelsonHall. First half 2012, BPO deal conversion rates have been hampered by macro factors and risk aversion following a strong 2011, potentially leading to pent up demand. There is an increasing focus on domain expertise, which translates into a Race Up the Value Chain. The pricing environment remains disciplined. If slower conversion rates persist (there have been encouraging signs in recent months), it could impact 2013 as vendors are working through a healthy 2011 backlog in 2012. The Race Up the Value Chain favors those with consulting (front end) capabilities such as Accenture, IBM, and to some extent Cognizant. Our BUY rated names are IBM, Accenture, Cognizant, Syntel, Virtusa, Genpact, WNS, and EXLService.
For more information, please contact:
Joseph D. Foresi
617-557-2972
