Wipro Founder and IT pioneer Azim Premji spoke about the company’s financials, business, executive movements, stakeholders, and CSR initiatives at Wipro ’s Annual General Meeting on July 18, 2016
Excerpts from the Speech:
Dear Stakeholders,
Let me start by giving a short overview on the overall environment. US has been sluggish in the first half of the year CY16 after posting growth of 2.4% in CY15. Growth is expected to pick up in the second half of the year. The unemployment data has been largely positive and there appears to be confidence that we will see one hike in CY16. The run up to Brexit had created a significant overhang on the global economy. As of the now, we do not see a contagion effect and appears to be a regional problem in UK. Eurozone continues to grapple with challenges around growth and low inflation coupled with geopolitical concerns. From an IT perspective, it continues to be a very strategic market for us. China growth has slowed down as it shifts its focus from manufacturing to services. The slowdown in China impacted commodity prices globally.
India continued to be a bright spot on the global canvas with the economy growing by 7.6% in FY16. Monsoon is a big positive. Capital flows are expected to be robust with flows in FDI due to opening up of various sectors and favorable growth expectation.
Overall, the outlook is stable for economies that form key markets for Wipro. In 2015-16, Gross Revenues of the Company crossed the landmark of Rs. 50,000 crores and grew by 9% YoY. Net Income for the year grew by 3% YoY to Rs 8,892 crores.
New Leaders at the Helm
Over the past five years, our organization has continued its transformation as a next generation technology and consulting company, with defining differentiators with clients. We have built a stronger client facing organization, increased our wins in large deals by investing in building capability in our employees and being at the forefront of technology changes.
TK Kurien, who led our company as the CEO till January 31 2016 has been appointed the Executive Vice Chairman, effective February 1 2016. TK Kurien will focus on key strategic initiatives while also providing continuity on client relationships without disruption. Abidali Neemuchwala was appointed as the Chief Executive Officer and Member of the Board of Wipro Limited from February 1, 2016. You may recall that Abid joined Wipro as Group President & Chief Operating Officer on April 1, 2015. In a short span of time, he has established himself as a tall leader in the eyes of our customers and won the respect and acceptance of the Wipro leadership team. A strong track record of success with customers, passion for excellence and rigor in execution makes him a natural choice to lead Wipro through the next phase of growth. The leadership transition from one CEO to the other has been extremely smooth and the organization has been the beneficiary of that.
Digital is Reshaping Our World
We are seeing pervasive change all around us. Consumer expectations and experiences, business models, consumptions models and at times, entire industries are getting fundamentally transformed. Every business has to become a tech business and there is no choice but to rapidly build capability in this area.
To partner with our customers, Wipro Digital practice offers end-to-end services across Digital advisory, design and technology. We are investing significantly in increasing the portfolio of Digital skills of our employees to be able to serve our clients effectively.
Enhanced Stakeholder Value
We have always striven to enhance stakeholder value for investors. The Company’s philosophy is to provide regular, stable and consistent payouts. In line with this philosophy, we announced a share buyback through a tender offer amounting to Rs 25,000 million in addition to offering dividends of Rs.6 per share. For the year 2015-16, dividends declared and proposed, combined with the buyback amount will enhance the payout ratio to 48% from 41% for the year 2014-15.
Beyond Financial Capital
We continue to run very effective programs to impact communities through multiple initiatives. Wipro Applying Thought in Schools is Wipro’s social initiative in school education that aims to build capacities for systemic educational reform in India and has been running for over 15 years. “Wipro-Earthian” is Wipro’s program to educate the youth on matters of sustainability. Our work in education is global beyond Indian borders. We started the Wipro Science Education Fellowship in the US in 2013 with the objective of facilitating high quality Science, Technology, Engineering and Math education at the K-12 levels in US schools. Wipro Cares engages with our proximate communities on the issues of Education for the underprivileged, primary health-care and environment.
Social Impact
As corporations continue to play their role of driving responsible, sustainable businesses, I firmly believe that owners of corporates are trustees of wealth, which needs to be used for furthering social causes.
As I have mentioned before, I have irrevocably transferred about 39% of the ownership of Wipro to a Trust that supports philanthropic causes. The Trust will continue to engage closely with social issues. The excellence in business performance at Wipro would translate into value creation for shareholders, a substantial portion of which would be towards philanthropy.
In 2015-16, Wipro achieved the milestone of its 70th anniversary and moved into its 71st year. At this juncture, I am grateful to all stakeholders- clients, employees, suppliers, partners and investors – for their continuing support to Wipro.
