Global Business Process Outsourcing (BPO) services provider WNS reported (GAAP) revenue of USD 113.3 Million, down 28.9 percent from USD 159.5 Million in Q4 of last year and down 3.3 percent from USD 117.2 Million last quarter. Its profit in Q4 stood at USD 4.4 Million, compared to USD 8.8 Million in Q4 of last year and USD 4.0 Million last quarter. Speaking to CNBC-TV18 Chief Executive Officer Keshav R. Murugesh said the transformation of WNS is progressing extremely well. "Based on the numbers that have been announced for this quarter and for the year, we are right on top in terms of margin performance across the industry." WNS is witnessing a healthy growth in its deal pipeline across the verticals it operates in. The company has bagged a large insurance deal and is currently ramping up 17 new processes, he informed.
Q: Can you take us through the numbers? Where do the margins stand at currently and the volumes, taking in mind the pricing as well?
A: We are very happy with the solid results that we have delivered for Q4 and fiscal 2012. I believe that the transformation of WNS is now progressing extremely well. The revenues for the Q4 were up 2.7 percent sequentially and 7 percent up year on year. The revenues for the whole year 2012 were also up 7 percent. Our adjusted net income was at USD 47.3 Million for the year, after providing for an extra USD 10 Million taxes and not receiving a benefit of USD 7.4 Million due to a change in hedge accounting this year. On a comparison against last year, it is up by more than USD 17 Million during the year and gross margin for the year was 34 percent. Selling, General and Administrative Expense (SG&A) was 18.6 percent. We are delighted with the results because based on the numbers that have been announced this quarter and for the year, we are right on top in terms of margin performance across the industry.
Q: You have added around five new clients in the quarter. Can you give me a sense of how large the deals would be and across what sectors?
A: We have been seeing very healthy growth in terms of pipeline across a number of areas especially insurance, healthcare, utilities, consumer and professional services vertical. During this year, we also spoke about a large insurance deal that I am delighted to say has now come in. We are ramping aggressively, 17 new processes are being ramped at this point in time. The deal pipeline is very broad based across each one of our verticals, geographies and horizontals. The size, complexity and scale of these deals are far bigger than what WNS has ever seen in the past, so I am very happy to say that we are playing a number of deals that could be having ACVs of at least USD 5 Million or above on yearly basis.
Q: In the last two quarters, you have raised capital through tapping the capital markets, can you give a sense of where that will be put in, the kind of deployment that would go through in terms of organic as well as inorganic growth if there are possibilities of acquisitions? Give us an overview of where this would go in and would we see some action in the next one month?
A: With WNS you always see actions. First and foremost, we launched a very successful IPO this year, both primary and secondary issue, where we raised USD 45 Million directly to the company. The focus of that cash is to enable growing our technology and global delivery footprint. We are assembling a number of platforms in-house to enable us to move more non-linear in terms of our margin and growth profile. I am pretty certain that as we make progress on the inorganic side, we will also look at some small acquisitions using this cash.
Q: In the last one or two quarters, we have seen enough of conversation with IT players. IT deals specifically this quarter seems to be thinning out now, is there a challenge in terms of winning deals especially from the US and the financial services vertical for BPO as well because this is something that we have seen widely across the IT sector right now?
A: Interestingly, from a BPO point of view, we are seeing some very good conversations based on our differentiated positioning in the market. From a WNS perspective, across every one of our verticals whether it is insurance or BFS or logistics, transportation we are seeing great conversations taking place. Based on the recessional themes that continued to persist, clients now understand that they have to do this. People first want to go to BPO players, so we are seeing some real solid traction in the marketplace.
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