Owner and CEO, GR20 Research

Gregory Ramirez

Owner and CEO

Industry Research and Consulting Services

GR20 Research

GR20 Research provides industry research and consulting services

Equity Bottom-Up

<ul>
<li>Q1 2025 performance showed stabilisation, with revenues beating expectations and bookings improving for a second consecutive quarter, although visibility for H2 remains low and growth may weaken again in Q2.   </li>
<li>Capgemini lags global peers in growth, mainly due to its revenue mix and high exposure to struggling sectors like European automotive, despite stable momentum and resilience in some industries.   </li>
<li>Strategic growth drivers include GenAI, defence, cybersecurity, and sovereignty, though GenAI has yet to materially impact revenues; and short-term gains may favour SaaS vendors over IT services firms.</li>
</ul>


Q1 2025 performance showed stabilisation, with revenues beating expectations and bookings improving for a second consecutive quarter, although visibility for H2 remains low and growth may weaken again in Q2.   
Capgemini lags global peers in growth, mainly due to its revenue mix and high exposure to struggling sectors like European automotive, despite stable momentum and resilience in some industries.   
Strategic growth drivers include GenAI, defence, cybersecurity, and sovereignty, though GenAI has yet to materially impact revenues; and short-term gains may favour SaaS vendors over IT services firms.


Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Capgemini's full-year 2024 results reflect a mixed performance against a backdrop of continued market challenges.</li><li>The company's revenues saw a decline of 2% at constant currency to EUR 22,096 million, evidencing the broader economic pressures and restrained client spending, especially in sectors like Manufacturing and regions such as France.</li><li>This drop was somewhat mitigated by resilience in segments such as Financial Services and Public Sector, and geographic improvement in North America, the U.K., Asia Pacific, and Latin America.</li></ul>

Capgemini's full-year 2024 results reflect a mixed performance against a backdrop of continued market challenges.The company's revenues saw a decline of 2% at constant currency to EUR 22,096 million, evidencing the broader economic pressures and restrained client spending, especially in sectors like Manufacturing and regions such as France.This drop was somewhat mitigated by resilience in segments such as Financial Services and Public Sector, and geographic improvement in North America, the U.K., Asia Pacific, and Latin America.

Capgemini: Initiation of Coverage- Strategic Acquisitions & 4 Pivotal Growth Levers!

<ul>
<li>BPO provider WNS is reported exploring a potential sale after attracting acquisition interest. The company has a market capitalisation of USD 2.89bn and operates across various sectors.   </li>
<li>We deem Capgemini could afford to acquire WNS, but such a move may not align with its strategic focus, despite the diversification benefits that a hypothetical acquisition would offer.   </li>
<li>The rise of generative AI could transform BPO, but it remains unclear whether Capgemini will pursue acquisitions in BPO, given its past strategy of focusing on cloud, digital and engineering.</li>
</ul>


BPO provider WNS is reported exploring a potential sale after attracting acquisition interest. The company has a market capitalisation of USD 2.89bn and operates across various sectors.   
We deem Capgemini could afford to acquire WNS, but such a move may not align with its strategic focus, despite the diversification benefits that a hypothetical acquisition would offer.   
The rise of generative AI could transform BPO, but it remains unclear whether Capgemini will pursue acquisitions in BPO, given its past strategy of focusing on cloud, digital and engineering.


<ul>
<li>Capgemini's share price dropped by 10% following a below-consensus guidance for FY 2025, highlighting concerns about its underperformance compared to peers and the delayed recovery of the IT services industry.   </li>
<li>Capgemini's revenue mix, with significant exposure to manufacturing in Europe, limits its growth compared to offshore competitors like TCS, Infosys, and Cognizant, which are benefiting from recovery in financial services.   </li>
<li>Despite AI creating high expectations, its impact on bookings remains limited, causing delays in decision-making; however, AI presents significant opportunities in IT services as it drives demand for business transformation.</li>
</ul>


Capgemini's share price dropped by 10% following a below-consensus guidance for FY 2025, highlighting concerns about its underperformance compared to peers and the delayed recovery of the IT services industry.   
Capgemini's revenue mix, with significant exposure to manufacturing in Europe, limits its growth compared to offshore competitors like TCS, Infosys, and Cognizant, which are benefiting from recovery in financial services.   
Despite AI creating high expectations, its impact on bookings remains limited, causing delays in decision-making; however, AI presents significant opportunities in IT services as it drives demand for business transformation.


Capgemini SE (CAP FP): A Question of Revenue Mix

Equity Long-Short Analyst

Pyari Menon

Thematic (Sector/Industry)

<ul>
<li>Deregulation's Green Energy Boost: Reduced federal oversight could accelerate innovation in renewables as corporations and markets drive sustainability efforts independently of government policies.</li>
<li>Tariff-Induced Deflation Risks: Disrupted global supply chains and demand destruction from tariffs may lead to deflationary pressures rather than the widely expected inflation.</li>
<li>Rise of Privatized Services: Tax cuts could act as a gateway to increased privatization of government services, shifting more essential functions like education and law enforcement to corporate control.</li>
</ul>


Deregulation's Green Energy Boost: Reduced federal oversight could accelerate innovation in renewables as corporations and markets drive sustainability efforts independently of government policies.
Tariff-Induced Deflation Risks: Disrupted global supply chains and demand destruction from tariffs may lead to deflationary pressures rather than the widely expected inflation.
Rise of Privatized Services: Tax cuts could act as a gateway to increased privatization of government services, shifting more essential functions like education and law enforcement to corporate control.


Trump 2.0: Some Unexplored Market Implications of Deregulation, Tariffs, and Tax Reforms

France

Capgemini offers information technology services. The Company provides mobile software solutions, business process management, outsourcing, cloud computing, finance, consulting, supply chain management, engineering, and other services. Capgemini serves aerospace, defense, automotive, health care, life science, telecom, media, and entertainment industries worldwide.

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Capgemini (CAP FP)

Capgemini (CAP FP): False Start?

Q1 2025 shows stabilisation for Capgemini, but growth lags global peers due to revenue mix and sector exposure. Strategic drivers include GenAI,...

Gregory Ramirez

Capgemini: Initiation of Coverage- Strategic Acquisitions & 4 Pivotal Growth Levers!

Capgemini's full-year 2024 results reflect a mixed performance against a backdrop of continued market challenges. The company's revenues saw a...

Baptista Research

Capgemini (CAP FP): Back to BPO?

BPO provider WNS is reported exploring potential sale, with Capgemini possibly able to afford but unlikely to align strategically. GenAI reshapes...

Gregory Ramirez

Capgemini SE (CAP FP): A Question of Revenue Mix

Capgemini's underperformance and revenue mix limitations raise concerns about its growth compared to offshore competitors, despite high...

Gregory Ramirez

Trump 2.0: Some Unexplored Market Implications of Deregulation, Tariffs, and Tax Reforms

Trump's re-election sparks a policy rodeo of deregulation, tariffs, and tax cuts, but focus should be on structural trends as that will always...

Pyari Menon

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Capgemini (CAP FP): False Start?

​Q1 2025 shows stabilisation for Capgemini, but growth lags global peers due to revenue mix and sector exposure. Strategic drivers include GenAI,...

Gregory Ramirez

Capgemini: Initiation of Coverage- Strategic Acquisitions & 4 Pivotal Growth Levers!

Capgemini's full-year 2024 results reflect a mixed performance against a backdrop of continued market challenges. The company's revenues saw a...

Baptista Research

Capgemini (CAP FP): Back to BPO?

​BPO provider WNS is reported exploring potential sale, with Capgemini possibly able to afford but unlikely to align strategically. GenAI reshapes...

Gregory Ramirez

Capgemini SE (CAP FP): A Question of Revenue Mix

​Capgemini's underperformance and revenue mix limitations raise concerns about its growth compared to offshore competitors, despite high...

Gregory Ramirez

Trump 2.0: Some Unexplored Market Implications of Deregulation, Tariffs, and Tax Reforms

Trump's re-election sparks a policy rodeo of deregulation, tariffs, and tax cuts, but focus should be on structural trends as that will always...

Pyari Menon

Q1 2025 shows stabilisation for Capgemini, but growth lags global peers due to revenue mix and sector exposure. Strategic drivers include GenAI,...

BPO provider WNS is reported exploring potential sale, with Capgemini possibly able to afford but unlikely to align strategically. GenAI reshapes...

Capgemini's underperformance and revenue mix limitations raise concerns about its growth compared to offshore competitors, despite high...