Executive Summary / Key Takeaways

• WNS is strategically transforming into an AI-powered intelligent operations leader, leveraging deep domain expertise and targeted acquisitions like Kipi.ai to drive digital transformation and cost savings for its global clientele.
• Despite facing significant, largely transitory revenue headwinds in fiscal 2024 from client volume reductions, project delays, and a deferred large insurance captive ramp, the company anticipates accelerated growth in fiscal 2025 as these challenges abate.
• WNS's proactive investments in AI and Generative AI (GenAI), including over 90 use cases and strategic partnerships, are shifting its business model towards outcome-based pricing and higher-value services, promising enhanced long-term margin opportunities.
• The pending $3.3 billion all-cash acquisition by Capgemini S.E. at $76.50 per share validates WNS's strategic value and aims to create a global leader in Agentic AI-powered Intelligent Operations, blending WNS's industry knowledge with Capgemini's advanced AI capabilities.
• WNS maintains a robust competitive position through its specialized, domain-centric solutions, efficient global delivery network, and a focus on end-to-end business transformation, differentiating it from broader IT service providers and in-house captive operations.

The Digital Transformation Imperative & WNS's Foundation

WNS (Holdings) Limited, founded in Mumbai in 1996, has evolved into a leading digital-led business transformation and services company. It offers comprehensive data, voice, analytical, and business transformation services globally, operating through a blended onshore, nearshore, and offshore delivery model. This strategic approach aims to provide clients with significant cost savings, operational flexibility, improved quality, and actionable insights. The company's overarching strategy is deeply rooted in a "domain-first" philosophy, leveraging technology and talent to drive client transformation.

The broader Business Process Management (BPM) industry is currently experiencing a dual dynamic. While global macroeconomic and geopolitical conditions, including inflation, rising interest rates, and regional conflicts, present challenges, they also create a compelling imperative for clients to digitize, automate, and reduce costs. Labor shortages in key markets like the US and UK/Europe further amplify the demand for WNS's digital intervention and outsourcing solutions. WNS positions itself as a mid-tier player, distinguishing itself through specialized expertise and a global delivery network. This allows it to compete effectively against larger, more generalized IT service providers like Cognizant and Accenture , as well as more niche analytics players like ExlService and broader professional services firms like Genpact .

WNS's history is marked by strategic tuck-in acquisitions designed to enhance its capabilities and competitive differentiation. Early acquisitions like Denali Sourcing Services (2017) and MTS HealthHelp (2017) bolstered its procurement and healthcare offerings, respectively. This inorganic growth accelerated with Vuram (2022), OptiBuy (2022), and The Smart Cube (2022), expanding its digital solutions, procurement, supply chain, and advanced analytics capabilities, particularly in Europe. The company's commitment to strategic evolution is further evidenced by its organizational restructuring in April 2023 into four Strategic Business Units (SBUs): Banking/Financial Services and Insurance (BFSI), Travel, Shipping/Logistics, and Utilities (TSLU), Manufacturing/Retail/Consumer, Hi-tech/Professional Services, and Procurement (MRHP), and Healthcare/Life Sciences (HCLS). This structure is designed to foster business synergies, enhance scalability, and deepen organizational expertise.

Technological Edge: The AI & Data Modernization Catalyst

WNS's core competitive advantage is increasingly anchored in its differentiated approach to technology, particularly in Artificial Intelligence (AI) and Generative AI (GenAI). The company views these as powerful tools, most impactful when integrated into broader, end-to-end digital solutions that demand deep domain expertise, process knowledge, advanced analytics, and human intelligence. This "domain-first" philosophy is a critical differentiator, ensuring that technology serves to solve specific industry problems and drive tangible business outcomes.

Recent strategic moves underscore this technological focus. In March 2025, WNS acquired Haukea Holdings Inc. (Kipi.ai), a leader in analytics and AI services specializing in advanced data solutions for the Snowflake (SNOW) AI Data Cloud. This acquisition is expected to create unparalleled value for clients across the BFSI, MRHP, and HCLS SBUs by strengthening WNS's data modernization, analytics, and AI capabilities. This was swiftly followed by a strategic collaboration with Snowflake in June 2025, aimed at accelerating AI and data modernization initiatives. Additionally, WNS-HealthHelp partnered with Availity in April 2025 to transform payer-provider collaboration, leveraging advanced technology in the healthcare space.

WNS has already demonstrated concrete, in-production GenAI solutions. The Smart Cube's Amplifi PRO, a digital procurement intelligence platform, launched a new GenAI-powered release in August 2024. This enhancement provides superior search capabilities, expanded category coverage, and an improved user experience. It leverages GPT 3.5 models specifically trained for procurement professionals using proprietary content, crucially offering traceability of answers to source data—a common challenge for generic GenAI models. This innovation is already being utilized by over 80 clients on an unlimited paid tier model and is expected to drive increased paid subscription revenue. Another notable example is a proprietary "recovery as a service" solution for a large insurance client. This offering combines AI models with claims specialists to identify and recover property claims costs from third parties. WNS engineered, cleansed, and structured the client's historical data, built and trained the AI models, and integrated them into the client's cloud environment. This solution is priced on an outcome-based model, where WNS receives a percentage of the recovered amounts, directly aligning its compensation with the value delivered.

The company's commitment to R&D and new technologies is extensive. WNS has expanded to over 90 GenAI use cases in various stages of development, with approximately 20 already built and ready for deployment, and 7 proprietary digital assets now embedded with GenAI capabilities. To support this, WNS has rolled out company-wide AI and GenAI training programs, comprising 25 unique courses across four tracks, developed in partnership with leading institutions like Google (GOOGL), MindMap Consulting, KPMG, LinkedIn Learning, and Oxford University. This has resulted in approximately 5,000 employees possessing data, AI, and GenAI skills, with another 1,000+ ready for rapid upskilling.

For investors, this technological differentiation is a critical moat. It enables WNS to move its client relationships up the value chain, shifting from traditional headcount-based pricing to outcome-based models. This transition is expected to lead to higher revenue per employee and improved margins, as WNS is rewarded for the business results it delivers rather than just the effort expended. While clients are proceeding cautiously with GenAI due to concerns around build/run costs, data privacy, and legal/regulatory issues, WNS's deep domain expertise positions it as a trusted partner to navigate these complexities, unlocking significant opportunities in the 75% unpenetrated BPM market.

Operational Excellence & Segment Contributions

WNS's operational performance in the first quarter of fiscal 2026 (three months ended June 30, 2025) reflects both its strategic growth initiatives and the impact of a challenging macroeconomic environment. The company reported total revenue of $353.8 million, a 9.5% increase year-over-year. However, net income for the quarter was $21.8 million, a decrease of 24.8% from the prior year, primarily due to higher operating costs and increased tax expenses. Gross profit stood at $116.6 million, up 2.6% year-over-year, while operating income was $33.1 million, down 14.2%.

The SBU structure provides granular insight into performance:

• Banking, Financial Services, and Insurance (BFSI): This segment was a strong performer, with revenue increasing by 24.1% year-over-year to $146.9 million. This growth was primarily driven by an increase of $24.0 million from existing clients and $4.5 million from new clients, further boosted by favorable currency movements (GBP, Euro, ZAR appreciation). Segment gross profit increased by 12.0%. However, the ramp-up of a large insurance captive has been delayed, with meaningful revenue contributions now expected in fiscal 2025 and 2026.
• Travel, Shipping/Logistics, and Utilities (TSLU): Revenue for TSLU increased modestly by 1.0% to $94.4 million. New client additions ($3.2 million) and favorable FX were largely offset by a $2.4 million reduction from existing clients due to lower volumes in the online travel segment and AUD depreciation. Segment gross profit decreased by 5.6%, impacted by higher facilities and travel costs. Management noted that approximately two-thirds of the travel volume decline is company-specific, with one-third attributable to macro factors.
• Manufacturing, Retail/Consumer, Hi-tech/Professional Services, and Procurement (MRHP): This segment saw revenue growth of 9.5% to $84.3 million, fueled by $15.3 million from new clients and favorable FX, though partially offset by lower existing client revenue and AUD depreciation. Segment gross profit increased by 6.4%. The company has observed a deceleration in growth for its newly acquired analytics and procurement entities within this segment, as clients prioritize projects not requiring significant upfront investment in the current macro climate. A large internet client's transition of procurement work from on-site to offshore, a headwind in fiscal 2024, is expected to complete by year-end, positioning this area for improved margins and accelerated growth in fiscal 2025.
• Healthcare and Life Sciences (HCLS): This segment experienced a revenue decrease of 13.7% to $35.8 million, primarily due to the loss of a large healthcare client (whose ramp-down was completed by December 2022) and AUD depreciation. Segment gross profit declined by 26.3%.

Overall, the gross profit as a percentage of revenue was lower in Q1 FY26 compared to Q1 FY25, primarily due to higher cost of revenue. This was driven by increased repair payments (in BFSI), higher facilities running costs (due to capacity expansion and increased return-to-office utilization), higher depreciation (from increased fixed assets), and elevated employee costs (headcount growth, Kipi.ai acquisition, wage inflation). General and administrative expenses also rose, impacted by higher share-based compensation, transaction expenses related to the pending Capgemini acquisition, and acquisition-related expenses for Kipi.ai. Amortization of intangible assets increased due to the Kipi.ai acquisition. These factors collectively led to a lower operating profit margin and, combined with increased income tax expense (due to Sri Lanka tax holiday expiry and deferred tax asset reversals), resulted in the decline in profit after tax.

Operationally, WNS continues to expand its capacity. Built-up seats increased by 3.3% year-over-year to 43,048 as of June 30, 2025, reflecting facility expansions in India, South Africa, Sri Lanka, and Romania. Total headcount grew by 9.2% to 66,085, aligning with revenue growth. The company's work-from-office rate averaged 72% in Q1 FY26, up from 65% in Q1 FY25, with a target of 70-75% as an end state, which is expected to ease associated cost headwinds.

Financial Health & Shareholder Value

WNS maintains a solid financial position, characterized by consistent cash flow generation and a disciplined approach to capital allocation. For the trailing twelve months (TTM) ended June 30, 2025, WNS reported annual revenue of $1.31 billion and net income of $170.1 million. The company's TTM gross profit margin stands at 34.81%, operating profit margin at 12.63%, net profit margin at 12.11%, and EBITDA margin at 19.46%. These profitability metrics are competitive within the BPM industry, with WNS's TTM EBITDA margin of 19.46% notably higher than its direct competitors like Genpact (15%), Cognizant (15%), Accenture (15%), and ExlService (14%) based on their latest annual reported EBITDA ratios. This suggests WNS's operational efficiency and ability to manage costs effectively.

Cash flow generation remains robust, with TTM operating cash flow at $207.16 million and free cash flow at $153.04 million, translating to a TTM free cash flow per share of $3.53. As of June 30, 2025, WNS held $100.9 million in cash and cash equivalents, with total debt outstanding of $266.2 million. The company has access to $153.8 million in available lines of credit, with $55.0 million currently drawn. Management anticipates that its cash from operations, existing cash balances, and credit facilities will be sufficient to cover capital expenditures, debt repayment, and working capital needs for the next 12 months.

WNS has a history of returning value to shareholders through share repurchases. In Q1 FY26, the company purchased 1.3 million ordinary shares for $75.4 million. Since the inception of its buyback program eight years ago, WNS has repurchased 9.9 million shares at an average price of $50.47, yielding an 85% total return and an IRR exceeding 15% as of fiscal 2023. This disciplined capital allocation strategy, balancing M&A with shareholder returns, underscores management's confidence in the business's long-term health.

Competitive Landscape & Strategic Positioning

WNS operates in a dynamic BPM market alongside formidable competitors. Its primary direct rivals include Genpact (G), Cognizant (CTSH), Accenture , and ExlService (EXLS). WNS differentiates itself by emphasizing a domain-first, specialized approach, particularly in complex, industry-specific processes.

Compared to Genpact, which focuses on data-driven process optimization, WNS's tailored solutions for sectors like insurance and financial services offer a more specialized edge, potentially fostering stronger client loyalty. While Genpact often leads in cost optimization, WNS's ability to deliver end-to-end services, enhanced by its recent acquisitions in digital procurement and analytics, can translate to greater efficiency and value for clients seeking comprehensive transformation. WNS's TTM gross profit margin of 34.81% is comparable to Genpact's latest annual 35%, but its TTM operating profit margin of 12.63% is slightly below Genpact's 15%. However, WNS's TTM net profit margin of 12.11% is slightly above Genpact's 11%.

Against Cognizant, a large IT services and BPM provider, WNS's more focused BPM approach can offer greater efficiency in process outsourcing, potentially leading to faster implementation for BPM-specific projects. While Cognizant excels in technology integration, WNS's strengths in analytical services and domain-centric solutions provide a unique value proposition in niche areas. WNS's TTM gross profit margin of 34.81% is comparable to Cognizant's latest annual 34%, and its TTM net profit margin of 12.11% is slightly above Cognizant's 11%.

Accenture, a global professional services firm, offers premium, consulting-driven services. WNS's offerings are generally more cost-effective and specialized, allowing it to achieve potentially lower operating costs in BPM delivery. While Accenture leads in strategic consulting and global scale, WNS's market positioning as a mid-tier BPM specialist helps it deliver strong value-for-money solutions. WNS's TTM gross profit margin of 34.81% is comparable to Accenture's latest annual 33%, and its TTM net profit margin of 12.11% is slightly above Accenture's 11%.

ExlService shares similarities with WNS in analytics-focused BPM. However, WNS offers broader industry coverage and a more comprehensive suite of transformation services. While ExlService excels in specialized data analytics, WNS's global delivery network and end-to-end service capabilities provide a competitive advantage. WNS's TTM gross profit margin of 34.81% is lower than ExlService's latest annual 38%, and its TTM operating profit margin of 12.63% is slightly below ExlService's 14%. However, WNS's TTM net profit margin of 12.11% is slightly above ExlService's 11%.

WNS's competitive advantages, or moats, include its deep domain expertise, which translates into stronger customer loyalty and pricing power in specialized segments. Its global delivery network enables efficient operations and faster innovation. The company's focus on outcome-based models, particularly enhanced by its GenAI initiatives, further differentiates it by aligning with client results rather than just headcount. This is particularly appealing to clients considering divesting their in-house captive units, which often struggle with HR, attrition, and lack of cross-industry transformation benefits. For instance, UK clients, having navigated Brexit, have increasingly turned to WNS for transformation due to local talent shortages, benefiting from innovative solutions like "Insurance-in-a-Box."

However, WNS faces vulnerabilities, including client concentration, which could impact revenue stability if key clients shift strategies (as seen with the large healthcare client ramp-down). While WNS is aggressively investing in AI, potential technological gaps compared to the broader R&D budgets of larger players like Accenture (ACN) could affect its innovation speed in certain areas. Despite these, established client relationships, specialized expertise, and regulatory compliance act as significant barriers to entry in the BPM industry, favoring WNS and its scaled competitors.

Outlook & Guidance: A Path to Accelerated Growth

WNS's outlook for fiscal 2026 (ending March 31, 2026) is framed by a strategic rationale that emphasizes the company's strong underlying business momentum despite a challenging macroeconomic environment. Management anticipates that the "outsized revenue headwinds" of 18% faced in fiscal 2024 were largely transitory and will abate, setting the company up for accelerated growth in fiscal 2025 and beyond. These headwinds included the ramp-down of a large healthcare process (completed by December 2022), the transition of a top procurement client from on-site to offshore (expected to complete by year-end fiscal 2024), and slowdowns in client volumes and discretionary projects, particularly in the travel vertical.

For fiscal 2026, WNS targets revenue growth of +7% to +11%. This outlook is supported by a healthy new business pipeline and strong underlying business momentum. The deferred revenue from the large insurance captive, though delayed, is contractually committed and expected to show meaningful ramps in fiscal 2025 and fiscal 2026.

Quarterly progression in fiscal 2025 saw a softer Q3, with revenue expected to be 3.5% to 4% lower sequentially compared to Q2, impacted by unfavorable FX (GBP/USD 1.23 assumed for H2 FY25 vs. 1.27 in Q2 FY25), the ongoing procurement client offshoring, and typical travel seasonality. However, management anticipates a recovery in revenue from Q4 fiscal 2025 onwards. Operating margins are projected to remain stable and healthy, in the 21% to 22% range for the full year, with Q3 expected around 21%+ and Q4 around 22%+. This stability is despite ongoing investments in the business, the continued shift to work-from-office (averaging 72% in Q1 FY26, targeting 70-75%), and normal annual wage pressure. Headcount is expected to decrease in Q3 fiscal 2025 before increasing in Q4 in preparation for fiscal 2026 revenue growth and the insurance captive ramp. Revenue per employee is projected to increase by 3-4%, reflecting the strategic shift towards non-linear, outcome-based models.

The most significant recent development, however, is the definitive transaction agreement announced on July 6, 2025, for Capgemini S.E. to acquire WNS in an all-cash transaction valued at approximately $3.3 billion, or $76.50 per ordinary share. This represents a premium of 28% to WNS's last 90-day average share price. The transaction, unanimously approved by both boards, is subject to shareholder and regulatory approvals and is expected to close by the end of calendar year 2025. Capgemini anticipates the acquisition to be accretive to its normalized EPS by 4% before synergies in 2026 and 7% post-synergies in 2027. This acquisition underscores the strategic value of WNS's high-growth, margin-accretive, and resilient Digital Business Process Services, particularly its deep industry knowledge and advanced AI capabilities, which Capgemini aims to leverage to create a global leader in Agentic AI-powered Intelligent Operations.

Conclusion

WNS stands at a pivotal juncture, having strategically transformed itself into a digital-led, AI-powered intelligent operations partner. Its "domain-first" approach, coupled with targeted acquisitions and proactive investments in GenAI, has positioned the company to capitalize on the increasing demand for digital transformation and cost optimization across industries. While fiscal 2024 presented notable, albeit transitory, headwinds, WNS's robust pipeline, strong operational execution, and the anticipated abatement of these challenges signal a clear path to accelerated growth in fiscal 2025 and beyond, with a targeted revenue growth of +7% to +11% for fiscal 2026.

The impending acquisition by Capgemini S.E. (CAP) for $3.3 billion serves as a powerful validation of WNS's strategic value, technological prowess, and market positioning. This union is poised to create a formidable force in the Intelligent Operations landscape, blending WNS's specialized expertise and resilient business model with Capgemini's global scale and advanced AI capabilities. For investors, WNS represents a compelling opportunity, offering exposure to a company that has consistently demonstrated operational excellence, financial health, and a forward-looking strategy focused on leveraging technological leadership to drive sustained value creation in the evolving digital services market.