Capita's Third Quarter Likely Will Be a Mixed Bag

The Capita Group (CPI) will be reporting its fiscal 2011 third-quarter results in the second week of November

Swami Shanmugasundaram 6 October, 2011 | 5:34PM
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The Capita Group (CPI) will be reporting its fiscal 2011 third-quarter results in the second week of November. We expect to see a mixed bag from the company--strong numbers from its commercial business partially offset by a weak showing from its government practice. Budgetary constraints and austerity measures have forced several government agencies to keep a tight leash on their spending for business process outsourcing (BPO), and we expect this to impede Capita's growth prospects in the near term. On the other hand, we expect Capita to benefit from the recent uptick in BPO spending by global corporations. Recent commentary from service providers like Accenture (ACN) and Cognizant (CTSH) indicates that the demand for BPO services continues to remain strong, which should work in Capita's favour.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Capita PLC17.50 GBX1.39

About Author

Swami Shanmugasundaram  Swami Shanmugasundaram is an equity analyst on the Technology Team.

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