Does Genpact (G) Have a Long Runway for Growth?

Artisan Partners, an investment management company, released its “Artisan Mid Cap Value Fund” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The growth stock trade that had driven U.S. stocks higher since late 2022 came undone in the first quarter of 2025. In the quarter, the fund’s Investor Class fund ARTQX returned -1.03%, Advisor Class fund APDQX posted a return of – 0.97%, and Institutional Class fund APHQX returned -0.97%, compared to a -2.11% return for the Russell Midcap Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Artisan Mid Cap Value Fund highlighted stocks such as Genpact Limited (NYSE:G). Genpact Limited (NYSE:G) offers business process outsourcing and information technology services. The one-month return of Genpact Limited (NYSE:G) was 1.67%, and its shares gained 28.54% of their value over the last 52 weeks. On June 3, 2025, Genpact Limited (NYSE:G) stock closed at $42.74 per share, with a market capitalization of $7.47 billion.

Artisan Mid Cap Value Fund stated the following regarding Genpact Limited (NYSE:G) in its Q1 2025 investor letter:

“Our top individual contributors were a varied group that included Genpact Limited (NYSE:G), Baxter International and Dollar General. Genpact, a business process outsourcing company, reported 8.7% year-over-year revenue growth in Q4, which was better than expectations and marked an acceleration from the prior quarter. The company experienced solid growth across verticals and geographies, as well as momentum in its Data-Tech-AI segment (12% Y/Y revenue growth) on strong demand for AI-based solutions. Continuing its prudent and shareholder-friendly capital allocation, Genpact also announced an 11% increase in its quarterly dividend and upped its stock buyback authorization by $500 million. Genpact is one of our more recent new positions—added to the portfolio in 2024. At the stock’s all-time highs in early 2022, Genpact was selling in the low $50s at around 22XFY1earnings. When we initiated our position, Genpact was selling in the low $30s at a 10X multiple. Though the business had performed well—continuing to generate free cash flow and grow earnings—the market had become concerned about the risk posed by AI to a labor-intensive outsourcing business. However, technological-driven automation isn’t new to this industry. Technology has been continually replacing low-value work. Also, Genpact is not a commoditized body shop. The company has domain expertise, its contracts are long term in nature, it provides services that are essential, and the tailwind of specialization via outsourcing appears to have a long runway.”

Genpact Limited (NYSE:G) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held Genpact Limited (NYSE:G) at the end of the first quarter, which was 32 in the previous quarter. In the first quarter of 2025, Genpact Limited (NYSE:G) reported total revenue of $1.215 billion, up 7.4% year-over-year in constant currency. While we acknowledge the potential of Genpact Limited (NYSE:G) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Genpact Limited (NYSE:G) and shared the list of top dividend stocks according to dividend yields. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.