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WNS (Holdings) Ltd 11 July 2008

Company News Alert

WNS acquires Aviva Global Services; FY 2009 guidance revised upwards

ADR BUY On 10 July 2008, WNS (Holdings) Ltd (WNS) announced a multi-year US$1.0 bn contract with Aviva to
Direct
purchase access to the
its business fulloffshoring
process reportcompany,
free of Aviva
charge atServices (AGS) for US$228 mn.
Global
Fundamental Stock
http://www.iirgroup.com/researchoracle/viewreport/show/20289
Following the announcement, WNS acquired all the shares of AGS and has taken control over the
company’s operations in Banaglore, Colombo, Pune and Chennai. As a result of the contract, WNS has
Ticker: WNS revised its revenue and net income guidance for FY 2009 upwards. Despite the decline in the ADR
price, we remain optimistic regarding WNS given the Aviva acquisition and the revision of FY 2009
Target price: US$20.26 outlook.
Current price: US$16.46
We will reassess the ADR rating for WNS after the company announces its 1Q 09 results in August
Price change
2008.
since last report: (5.9%)

European BUY As we continue to anticipate a significant positive currency impact on the European ADR over the
medium term we do not anticipate a change in our current rating.
ADR¹
Ticker: W9Ny.F
Target price: €15.01
Current price: €9.86
Price change We will reassess the rating and target price for the European ADR after the company announces its 1Q
since last report: (14.1%) 09 results in August 2008.

Supervisor: Meera Patil

Analyst: Reshma Jamadar Investment horizon – short term actionable trading strategies
Editor: Shem Pennant This report addresses the needs of strategic investors with a long-term investment horizon of 6-24 months. If
this report is provided to you by your broker under the Global Settlement, you may now also access (free of
Global Research Director:
charge) the short-term trading outlook that we publish from time to time for this issuer, looking at the coming
Satish Betadpur, CFA 5-30 days for readers with a shorter trading horizon. These are available on-line only at
www.researchoracle.com
Next news due:
2Q 08 results, August 2008
On 10 July 2008, WNS announced a multi-year US$1.0 bn contract with Aviva (the world's fifth largest
insurance group) to purchase its business process offshoring company, Aviva Global Services (AGS) for
a total consideration of GBP115 mn or US$228 mn. Pursuant to the agreement, WNS acquired all the
shares of AGS and will take over the company’s operations in Bangalore in India, Colombo in Sri Lanka
as well as the Pune and Chennai operations in India which together comprise over 5,800 seats. Under
the terms of the contract, WNS will provide a comprehensive spectrum of life and general insurance
processing functions to Aviva. As a result of the contract with Aviva and the subsequent acquisition of
AGS, WNS revised upwards its revenue guidance for FY 2009. The company now expects FY 2009
revenues to be in the range of US$425 mn – US$435 mn indicating y-o-y growth of between 46.2% -
49.6 mn compared to the previous range of US$373 mn – US$378 mn. Net income (excluding
amortization of intangible assets, share-based compensation and related fringe benefit taxes) is
expected to be between US$46 mn – US$49 mn, up from the previous guidance of between US$44
mn - US$46 mn. Following this announcement, WNS stock price witnessed a single day increase of
3.9% to close at US$16.46 on 10 July 2008. In our 4Q 08 and FY 2008 update report dated 23 June
2008 we rated the WNS ADR a BUY with a target price of US$20.26. Since then the ADR has declined
5.9%. We believe the majority of the decline in the ADR is attributable to global weakness across major
equity indices due to increasing oil prices coupled with the recessionary trends witnessed in the US
economy. In light of the Aviva acquisition and the company’s revised guidance for FY 2009, we
continue to view the WNS ADR as a positive investment opportunity.

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