Azim Premji brushes aside Brexit fears
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Wipro-chairman Azim Premji on Monday said that even though the run up to the Brexit or exit of United Kingdom (UK) from the European Union (EU) has created a significant overhang on the global economy, there has not been much after effects so far. Europe, he said, would continue to be a strategic market for IT services players like Wipro said a report in the Business Standard.
“As of the now, we do not see a contagion effect and appears to be a regional problem in UK,” Premji said addressing the 70th Annual General Meeting (AGM) of Wipro here. “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.”
Most of the Indian IT services companies are expected to get impacted after the UK decided to exit UK post a referendum conducted late last month. The impact is seen not just in terms of devaluation of British Pound, but also in terms of deferment of spending decision across the European region including the UK owing to the uncertainties.
“We hope it will not have consequences down the line of other people breaking out from active participation in the global economy,” Premji said addressing the 70th Annual General Meeting (AGM) of Wipro.
Talking about the overall business environment, Premji said even though the US has been sluggish in the first half of calendar year 2016 after posting growth of 2.4 per cent in CY15, the growth is expected to pick up in the second half. “The unemployment data has been largely positive and there appears to be confidence that we will see one hike in CY16.” The US is by far the largest market for IT service providers like Wipro accounting for around 60 per cent of the overall revenues.
On India, the Wipro chairman said the country will be one of the fastest growing large economy and the government opening lot more sectors for investments with generate further foreign direct investment. “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,” he said.
He however felt that China growth has slowed down as the country has been making a significant shift from manufacturing to a services led economy, thus impacting the commodity prices.
On the outlook for Wipro's IT business, Premji said it will be positive in all their key markets and the corporation has been transforming itself as the next generation technology company. “Overall, the outlook is stable for economies that form key markets for Wipro.”
Wipro has been making significant investments in the digital business. “Every business has become technical business there is no choice but to build a digital capacity,” Premji said.
On his philanthropic activities, Premji said, “I firmly believe owners of corporates are trustees of wealth which needs to be used for furthering social causes. I have irrevocably transferred 39% of the ownership of Wipro to a foundation. The trust will continue to engage closely with social issues.”
