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WNS (Holdings) Ltd 23 June 2008

Update Report – 4Q 08 and FY 2008 Results

WNS’s overall healthy outlook for FY 2009 drives our positive investment outlook

ADR BUY Fundamental research indicates a 16% upside for the ADR over the next 6-24 months. We have
calculated the target price based on fundamental factors, using a weighted average of target prices
Fundamental Stock
obtained using DCF and comparative valuation methodologies.

Ticker: WNS
Target price: US$20.26
Current price: US$17.50 We upgrade the ADR from a HOLD to a BUY with a 6-24 month target price of US$20.26 per share.

European BUY The European ADR is expected to appreciate approximately 31% over the next 6-24 months as the 16
percentage points fundamental upside is further aided by a 15 percentage points upside attributable
ADR1 purely to the anticipated appreciation of the US dollar against the Euro over the same period. We are
reverting to a 6-24 month horizon to value this stock as we no longer expect a significant currency
Ticker: W9Ny.F impact in the medium term2.
Target price: €15.01
Current price: €11.49 We upgrade the European ADR from a HOLD to a BUY with a 6-24 month target price of €15.01.

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
Global Research Director: this report is provided to you by your broker under the Global Settlement, you may now also access (free of
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:
1Q 09 results, August 2008
Report summary
WNS (Holdings) Ltd (WNS) reported encouraging top-line growth in FY 2008, with net revenues in line
with our and market estimates. In addition, the company has released a healthy outlook for FY 2009
despite concerns of a global slowdown and stated that it has an active pipeline, which will enable it to
capture market share. WNS also completed the acquisition of Call 24/7, an auto insurance claims
processing services provider catering to the UK insurance industry, aimed mainly at bridging the
revenue gap if its client, Aviva Global Services (Aviva) decides to exercise its transfer option for the
Pune facility. In a move to expand its global delivery network, WNS also formed a joint venture in the
Philippines with Advanced Contact Solutions (ACS), which we believe will allow the company to utilize
the talent pool available in that region. WNS added 12 new clients in 4Q 08, of which 3 are expected
to make a significant contribution to revenues and registered net additions of 292, bringing the total
workforce to 18,104 at the end of the quarter and FY 2008. However, the high attrition level remains a
cause for concern. Based on the positives outlined above, we continue to view the WNS ADR as an
attractive investment opportunity at current levels.

Currency impact for US investors

The company reports in US dollars, which is its major trading currency. Earnings forecasts are
therefore also expressed in US dollars. Although the company has costs as well as revenues in other
currencies, we assume the net risk is minimized through implementation of effective hedging
strategies. As a result the impact of currency movements on the price of the ADR is assumed to be
neutral. Where specific currency risks are identified these will be highlighted in the report.

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