Bengaluru: Rishad Premji, elder son of Wipro promoter Azim Premji, has been appointed to the board of directors of the $7-billion company effective May 1.
Rishad’s elevation to the board clearly indicates he will represent the ownership interest in India’s third-largest IT firm. Azim Premji and family own 73.39% of the shares in the company. This was widely expected as his father and the executive chairman will turn 70 this year.
Rishad, 38, joined Wipro in 2007 and has since taken on a number of critical roles. In a letter to Wipro employees, Azim Premji said: “These past eight years have given Rishad an in-depth view of the organization and makes him well positioned to guide Wipro and carry the mantle of ownership in the years ahead.”
Wipro CEO T K Kurien said Rishad has been a “terrific contributor”. “He’s extremely hard-working and I have never seen him ever being not part of the team. In a way, while he represents ownership, I think he represents management more. It requires maturity to handle that and he has done that well over the years.”
Ashok S Ganguly, independent director and chairman of the Board Governance and Nomination Committee, said Rishad “brings a unique blend of exceptional strategic insights, understanding of the technology landscape and diverse business expertise”.
Rishad said 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”.
Rishad did BA in economics from Wesleyan University, US, and MBA from Harvard Business School. He worked with Bain & Co for two years and with GE Capital in the US for four years.
He started in Wipro’s banking and financial services vertical, and spearheaded its entry into the mortgage segment. He was given increasingly important responsibilities and currently runs strategy and mergers & acquisitions. He was recently given the additional responsibilities of overseeing the technology office, investor and government relations, Wipro Ventures, a $100-million fund focused on investing in new-age startups building cutting-edge technologies.
Peter Bendor Samuel, CEO of Everest Group, said Rishad’s induction to the board had been coming for some time. “With the family owning such a large proportion of Wipro, this makes a lot of sense. If anything, the family is under-represented on the board. Rishad has certainly paid his dues working in a wide variety of roles in Wipro and learning the business,” he said.
Wipro revenue drops 1.2% in Q4
Meanwhile the slump in global energy prices once again hit Wipro’s financial performance in the quarter ended March.
The IT services company, which has a higher exposure to the oil & gas vertical compared to its peers, saw its sequential revenue growth drop by 1.2% to $1,774.5 million. In constant currency terms, revenue rose by 1.2%, but that figure was lower than that of TCS’s 1.6% and HCL Technologies’ 2.7%. It was however well within the company’s revenue guidance of 1%-3%.
In fiscal 2014-15, Wipro’s revenue was up 7% to $7.08 billion. In constant currency (discounting for the depreciation of the euro, pound and other currencies against the US dollar), the growth was 8.7%. These numbers are significantly lower than the industry average growth of about 13%, as estimated by IT association Nasscom, but are higher than Wipro’s growth rate in 2013-14 (6.4% in reported currency, and 7.9% in constant currency).
“From a portfolio mix, we have been relatively overweight in energy and the sharp cutbacks in capital expenditure have impacted us close to $100 million in revenues in 2014-15 compared to 2013-14,” said CEO T K Kurien.
Asked about how he sees the coming year, Kurien said, “If you take out the stress segment of energy, we’ll do better than last year.”
He said three verticals – healthcare, manufacturing, and retail/consumer goods/transportation – were doing well. For the year, healthcare grew 19.6% in constant currency, and manufacturing grew 10.3%. Among service lines, infrastructure services grew 19%. Kurien said momentum was continuing to pick up in infrastructure services and product engineering.
The company has provided a sequential revenue growth guidance of -0.5% to 1% for the June quarter. This again looks weak, but Kurien said the year-on-year growth in the first quarter of last year was 8.1% and the guidance for the first quarter of this year reflected a year-on-year growth (in constant currency) of between 7.8% and 9.4%.
