Rishad Premji, eldest son and a Harvard Business School graduate, was already Wipro’s chief strategy officer, head of investor relations and corporate affairs. He joins the board from May 1.
The appointment was announced on Tuesday alongside a modest 2 per cent rise in quarterly profit and a muted sales forecast for the current quarter. The profit beat expectations of a slight dip, thanks to a rise in Western clients’ IT spending. (Read more)
“It has not come as a complete surprise,” a sector analyst with a Mumbai brokerage said, declining to be named as he was not allowed to speak to the media. “There is not much one can attribute this to except for that fact that he is being groomed for a bigger role.”
But the management sought to play down the elevation of the junior Premji, whose family owns about 73 per cent of the firm.
“There is nothing much to be read into this other than the fact he is really representing shareholders’ interest,” Wipro chief executive Officer T K Kurien told reporters.
Wipro founder Azim Premji took over his own father’s ailing vegetable oil business in the mid-1960s, diversified into making hydraulic cylinders in the 1970s and struck out into information technology in 1980.
For its fourth quarter ended March 31, Wipro’s net profit rose to Rs 2,272 crore versus Rs 2,227 crore in the same period last year, the company said.
Analysts, on average, had expected a profit of Rs 2,180 crore, according to Thomson Reuters data.
Total revenue rose to Rs 12,140 crore, an increase of 4 per cent over last year, as the company added 65 new clients.
Wipro, which makes about three quarters of its sales in the United States and Europe, said its IT services revenue was likely to be $1.77-$1.79 billion in the June quarter, growth of up to 1.1 per cent from the preceding quarter.
The tepid forecast, below most analysts’ expectations, was a result of the drop in crude oil prices, curbing investments on outsourcing services by clients in the resources sector.
Wipro makes 18 per cent of its sales from the energy sector, which has seen job cuts in the recent past due to the oil price slump. Bigger rivals Tata Consultancy Services Ltd and Infosys Ltd make roughly 5 per cent from the sector.