Despite Muted Q4 Results, The Son Rises In Wipro
The slump in global energy prices once again hit Wipro’s financial performance in the quarter ended March. The country’s third largest software services firm reported 2.02 percent rise in net profit to Rs 2,272 crore as against Rs 2,227 crore in the same period last year. While the company’s growth was much below analysts’ expectations, what’s worth talking about is the company’s elevation of Rishad Premji, the eldest son of the company’s founder Azim Premji to its Board of directors - a long-awaited a move but brings him closer to the top job. Already Rishad has been appointed as the Chief Strategy Officer in the company, driving Wipro’s M&A functions.
Rishad joined Wipro in 2007, and helped in setting up of Wipro Ventures, a VC fund. With a corpus of $100 million, the fund is aimed at investing in start-ups in the areas of mobility, automation, AI and M2M. He will continue to run strategy and mergers and acquisitions for the company. He would also be responsible for overseeing technology office, investor and government relations and Wipro ventures, the IT major said in a statement.
CEO T. K. Kurien said, “We have always messaged the fact that there is going to be shareholder interest being taken care of by getting somebody on the board, and Rishad has really filled that role. As far as his role is concerned, nothing has changed. It continues the way it is.”
The elevation gives clear indications of succession planning at Wipro, which was founded by Azim Premji, in December, 1945. Azim Premji, who controls close to 74 percent of the company, is ranked 48th on the Forbes rich list with a wealth of $17.1 billion.Wipro further clarified that Azim Premji would continue to be the Executive Chairman of the company, Wipro clarified.
The Harvard Business School alumnus said on his board appointment, “It is an absolute privilege and honour to be invited to the board of Wipro, a company built over the past 70 years on the bedrock of uncompromising integrity and the hard work of thousands of Wiproites.”
The company’s total revenue rose to Rs 12,140 crore, an increase of 4 percent over last year. In constant currency, the growth was 8.7%. These numbers are significantly lower than the industry average growth of about 13%, as estimated by IT association Nasscom.
The company has provided a sequential revenue growth guidance of -0.5% to 1% for the June quarter. This again looks weak. About the next one year, Kurien told TOI “If you take out the stress segment of energy, we’ll do better than last year.”
According to him, three verticals - healthcare, manufacturing, and retail/transportation - were doing well. For the year, healthcare grew 19.6 percent in constant currency, and manufacturing grew 10.3 percent. Among service lines, infrastructure services grew 19 percent. Kurien said momentum was continuing to pick up in infrastructure services and product engineering.
The company said, it will continue to make investments in talent development for a changing business landscape. We are also working on process simplification internally and enhancing employee engagement across all levels - its quarterly annualised attrition dropped from 16.4 percent to 15.6 percent.
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