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UPDATE 2-WNS Q2 tops Street, but sees some pricing pressure

Thu Nov 13, 2008 11:55am EST

Stocks

   

* Cuts FY revenue view on strong dollar

Stocks  |  Global Markets

* Q2 EPS, revenue beat Street

* CEO: BPO business healthy

* CEO: seeing modest pricing pressure

* Shares jump more than 5 pct (Adds CEO comments, background)

By Deepti Govind

BANGALORE, Nov 13 (Reuters) - India-based back-office firm WNS Holdings Ltd (WNS.N) said some rivals were putting pressure on its pricing, but does not expect this to increase significantly in the future.

"WNS is seeing a modest amount of pricing pressure, particularly from IT players who are trying to beef up their BPO (business process outsourcing) revenue," Chief Executive Neeraj Bhargava said by phone.

IT-enabled services companies, such as call center operators, are beginning to get affected by the overall slowdown in the U.S. economy. As more companies are chasing less business, pricing has come under pressure in the industry.

WNS, however, posted better-than-expected quarterly results on Thursday, helped by growth in its BPO business and contributions from Aviva Global Services Singapore, which it bought in July.

"We're seeing some of our clients go through ups and downs, but that aside the BPO business still looks very healthy," Bhargava said.

Shares of the Mumbai-based company, which is majority owned by buyout firm Warburg Pincus [WP.UL], rose more than 5 percent to a high of $10.00 on the New York Stock Exchange.

But WNS cut its revenue outlook for financial year, citing the recent strengthening of the U.S. dollar against the pound.

The company, which draws about half its business from British and European operations, expects revenue of $385 million to $400 million, less payments to repair centers. It had previously forecast revenue of $425 million to $435 million.

WNS, though its auto claims BPO segment, provides claims-handling and accident-management services, in which it arranges for automobile repairs through a network of third-party repair centers.

The company, which provides data processing and call center services, stood by its financial-year profit forecast of $46 million to $49 million, helped by the rise of the U.S. dollar against the Indian rupee.

The company plans to add more sales and marketing in North America. Most of these new additions are expected to be in the finance and accounting, insurance and industrial goods and infrastructure markets.

WNS, which has completed three acquisitions this year, said it was not targeting any more deals in the near future.

For the company press release, please double-click [ID:nBw135477a] .

For the alerts, double-click [ID:nWNAB2853] . (Additional reporting by Kuganandhan Paramanandan; Editing by Amitha Rajan, Pratish Narayanan)



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