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WNS (Holdings) Ltd. (WNS) $9.31
Equity Research
First Take: 1Q better, outlook intact; operating metrics improved
News
WNS reported 1QFY12 net revenue of $97.8 mn (+9.6% yoy; +3.7% qoq),
above our and consensus estimates of $94.1 mn and $94.4 mn,
respectively. GAAP EPS was $0.01, $0.01 above our estimate of $0.00;
excluding stock comp and amortization, adjusted EPS was $0.22 vs. our
and consensus estimates of $0.20 and $0.20, respectively. Note that WNS
has adopted and is reporting financial results under IFRS, while our
previous estimates (and likely the consensus) were based on US GAAP.
For FY2012, WNS’s revised guidance calls for net revenues of $387-
$407 mn (+5%-10% yoy) vs. previous $383-$407 mn. Guidance for adjusted
net income remains unchanged at $43-$47 mn. These compare to our and
consensus estimates of $393 mn (+6% yoy) and $396 mn (+7% yoy) for net
revenue, and $46.2 mn and $45.7 mn for adjusted net income, respectively.
Analysis
1QFY12 headcount finished at 21,808 (+1.9% yoy; +1.3% qoq) vs. our
estimate of 21,973. Employee attrition was reported at 41%, down from
43% in the March-quarter. Billed DSO were 39 days, down from 44 days in
the March-quarter. FCF was -$4.4 mn, slightly below our -$2.7 mn estimate.
WNS noted in the press release that it signed 6 new clients in 1Q.
Implications
Better than expected 1Q results and an intact FY12 outlook, coupled with
growing headcount (albeit only modestly) and improved employee
attrition, suggest improved execution and that WNS’ business has largely
stabilized. That said, we believe the company’s growth profile will likely
continue to trail the industry and its offshore BPO peers through CY2012.
Our price target and estimates are unchanged. We will learn more details
on management’s conference call this morning.
INVESTMENT LIST MEMBERSHIP
Americas Sell List
Coverage View: Attractive
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
WNS (Holdings) Ltd. (WNS) $9.31
Equity Research
First Take: 1Q better, outlook intact; operating metrics improved
News
WNS reported 1QFY12 net revenue of $97.8 mn (+9.6% yoy; +3.7% qoq),
above our and consensus estimates of $94.1 mn and $94.4 mn,
respectively. GAAP EPS was $0.01, $0.01 above our estimate of $0.00;
excluding stock comp and amortization, adjusted EPS was $0.22 vs. our
and consensus estimates of $0.20 and $0.20, respectively. Note that WNS
has adopted and is reporting financial results under IFRS, while our
previous estimates (and likely the consensus) were based on US GAAP.
For FY2012, WNS’s revised guidance calls for net revenues of $387-
$407 mn (+5%-10% yoy) vs. previous $383-$407 mn. Guidance for adjusted
net income remains unchanged at $43-$47 mn. These compare to our and
consensus estimates of $393 mn (+6% yoy) and $396 mn (+7% yoy) for net
revenue, and $46.2 mn and $45.7 mn for adjusted net income, respectively.
Analysis
1QFY12 headcount finished at 21,808 (+1.9% yoy; +1.3% qoq) vs. our
estimate of 21,973. Employee attrition was reported at 41%, down from
43% in the March-quarter. Billed DSO were 39 days, down from 44 days in
the March-quarter. FCF was -$4.4 mn, slightly below our -$2.7 mn estimate.
WNS noted in the press release that it signed 6 new clients in 1Q.
Implications
Better than expected 1Q results and an intact FY12 outlook, coupled with
growing headcount (albeit only modestly) and improved employee
attrition, suggest improved execution and that WNS’ business has largely
stabilized. That said, we believe the company’s growth profile will likely
continue to trail the industry and its offshore BPO peers through CY2012.
Our price target and estimates are unchanged. We will learn more details
on management’s conference call this morning.
INVESTMENT LIST MEMBERSHIP
Americas Sell List
Coverage View: Attractive
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