Bangalore: IT major Wipro Ltd Tuesday elevated its Chairman Azim Premji's son Rishad to the company Board in an apparent succession planning on a day it posted 2.1 percent increase in March quarter profits.
The country's third largest software services firm posted a net profit of Rs 2,286.5 crore in January-March 2015, 2.1 percent higher than Rs 2,239.1 crore a year-ago.
The net profit growth, which is in line with expectations, was helped by robust momentum in infrastructure and healthcare services.
The 38-year-old Rishad, who had joined Wipro in June 2007 as a Business Manager, was elevated to the Board position representing "shareholder interest", Wipro CEO T K Kurien said.
Harvard-educated Rishad, the eldest of the two sons of Azim Premji, is at present chief strategy officer and will join the Board from May 1.
The younger sibling Tariq is associated with Wipro Foundation.
The elevation gives clear indications of succession planning at Wipro, which was founded by Azim Premji, 69, in December, 1945. Azim Premji, who controls close to 74 percent of Wipro, is ranked 48th on the Forbes rich list with a wealth of USD 17.1 billion.
"We have always said there is going to be shareholder interest being taken care of by getting somebody on the board and Rishad has really filled that role... He represents share holder interest, he is the valued member of the Wipro management team," Kurein said.
Wipro, which gets a dominant chunk of its revenues from IT services, saw its topline growing by 3.9 percent to Rs 12,171.4 crore in the January-March quarter of 2014-15, from Rs 11,703.6 crore in the year-ago period.
Revenues from IT services business increased six percent year-on-year to Rs 11,240 crore (up 3.2 percent to USD 1.77 billion) in the reported quarter.
However, Wipro has forecast its IT services revenues for the April-June 2015 period to be in the range of USD 1.76 billion to USD 1.79 billion.
This is lower by 0.5 percent to a growth of one percent from the earnings of January-March 2015 quarter.
Currency fluctuations impacted financial performance of the IT majors like Tata Consultancy Services and HCL Technologies in the January-March 2015 quarter as dollar made significant gains against global currencies, including Indian rupee.
Wipro CFO Jatin Dalal said the company continues to maintain focus on operational improvements and productivity enhancements.
"This has resulted in margin expansion despite adverse cross-currency movements," he said.
For the year ended March 31, 2015, Wipro's net profit increased 11.03 percent to Rs 8,705.9 crore, while revenues were up 8.14 percent to Rs 47,318 crore.
"The healthcare, life sciences and services business unit delivered 19.6 percent growth for the year in constant currency... We have also seen tremendous pick up in India and Middle east with 21 percent growth y-o-y in constant currency. We continue to see robust momentum in infrastructure services with a growth of 19 percent for the year," Kurien told reporters here.
He added that the company added 65 new customers during the quarter, which is higher than the normal run rate.
Wipro's IT services segment had a headcount of 158,217 as of March 31, 2015.
"We 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 -- our quarterly annualised attrition dropped from 16.4 percent to 15.6 percent," Kurein said.
Talking about the demand environment, Kurein said it remains stable but there are uncertainties in the banking and financial services and energy sector.
"From a portfolio mix, we have been relatively overweight in energy and the sharp cutbacks in the capex have impacted us close to USD 100 million in revenues in FY'15 compared to FY 2014.
"On BFSI, we saw some slowness in spending as we exited the previous calendar year and we have not seen the pickup," he said.
Kurein added that the company has seen strong growth in healthcare, manufacturing, and Retail and CTG.
"Among service lines, we see momentum pickup in infrastructure services and product engineering," he said.
