Rishad Premji – What’s In Store For The New Wipro Chairman

Wipro Ltd.'s Founder Azim Premji made way for his son Rishad Premji at the helm of India's fourth-largest software services provider after he decided to step down as executive chairman and managing director.

Rishad Premji has been reappointed as a whole-time director for five years—from July 31, 2019 to July 30, 2024—and designated as executive chairman of Wipro's board of directors. Also, Chief Executive Officer Abidali Neemuchwala will take on the role of managing director.

This comes at a time Indian software services exporters are facing stiff competition at offshore sites from captive centres—that are operated and owned by clients themselves—as they cost less. Profitability of the information technology companies are also likely to be impacted due to changes in the U.S. visa policy.

While Wipro has got to do a lot of catching up with larger peers Tata Consultancy Services Ltd. and Infosys Ltd., and younger rival HCL Technologies Ltd., the board exuded confidence in the Premji scion.

“Rishad's understanding of the global technology industry, strong strategic orientation and diverse leadership experience make him the right person to guide Wipro,” Ashok S Ganguly, an independent director on Wipro's board, said.

Here's a look at what Rishad Premji has in store as the new Wipro chairman:

Narrowing Margin

Wipro's March quarter net profit fell 1.1 percent sequentially to Rs 2,483 crore as margins narrowed on account of a weaker rupee. Its margin contracted 60 basis points sequentially to 17.8 percent. The company's revenue rose 0.7 percent quarter-on-quarter to Rs 15,161 crore during the three months ended March.

The tech company forecast its IT services revenue for the first quarter of the financial year ending March 2020 to be in the range of $2,046-2,087 million—a sequential growth of (+/-) 1 percent.

In comparison, TCS and Infosys' fourth quarter results beat estimates.

H-1B Visa Woes

Restrictions on the H-1B visas by the U.S. have compelled Indian IT companies to hire more locally, leading to an increase in employee costs, CARE Ratings said in a note.

Crisil Ratings in a separate note in May said an increase in mandatory local U.S. hiring will narrow IT industry's operating margins by 0.30-0.80 percent.

Still, Rishad Premji said it's important to “separate the sentiment from the fact” regarding the visas. Of the 65,000 H-1B visas issued every year, the Indian IT industry uses less than 10,000, he told PTI in an interview in May last year. Also, 70 percent of visas go to Indians, not to Indian companies. “Fundamentally from a trade perspective, we have to address the mobility of services more holistically as we address the mobility of products,” he said. “The mobility of services is as important a component.”

Deals Activity

As Wipro's chief strategy officer, Rishad Premji led the company's M&A strategy and conceptualised Wipro Ventures—a $100-million fund to invest in startups developing technologies and solutions that complement Wipro's businesses with next-generation services and products.

On Wednesday, Wipro said it will acquire U.S.-based International TechneGroup Inc. for $45 million.

Nasscom Stint

Rishad Premji was the chairman of the National Association of Software and Services Companies in 2018-19. During his tenure, Nasscom did away with the practice of providing an annual guidance for the Indian IT industry. Instead, the IT trade body will release findings of a survey of 100 IT sector chief executives.

The CEO survey presents a “perspective in its naked form, and you can interpret from that, what you would like”, Premji had then said.

Career Highlights

Prior to joining Wipro in 2007, Rishad Premji was with Bain & Co. in London. He has also worked with GE Capital in the U.S.

Rishad Premji has an MBA from Harvard Business School and a BA in Economics from Wesleyan University. In 2014, he was recognised as a young global leader by the World Economic Forum for his leadership, professional accomplishments, and commitment to the society.