Goldman Sachs: India IT: WNS Holdings (WNS, Sell)

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WNS Holdings (WNS, Sell, $12.76)
 Repositioning the company to grow existing relationships – Management indicated
that, historically, one of the biggest challenges for WNS is the ability to expand
business relationship with existing clients, given a horizontally focused model. As such,
in 2010 the company has worked aggressively in creating a vertically focused
organization, with horizontals supporting the verticals.

 Increased investments in sales resources and altered compensation structure – In
addition, the company has made increased investments in its sales organization and
leadership and broken it into distinct hunting and farming teams. The company has
also altered its compensation structure based on a more variable model that is tied to
the contract value of business won both from existing and new clients.
 High employee attrition is a concern but has recently stabilized – While employee
attrition remains elevated and higher than the industry (42% in the September-quarter),
it has stabilized over the last quarter given that there is more clarity on the leadership
and strategic direction of the overall company. Longer term, WNS aims to reduce
employee attrition rate down to the 30% level over time through matching the right
talents to its focused domains and increased investments in learning and training
initiatives.