PwC India’s growth in 2020 is expected to be similar to the previous year’s and it could take a year or two for it to reach pre-Covid levels, said Sanjeev Krishan, the accounting and professional services firm’s newly elected chairman.
A PwC veteran, Krishan took over the top job at the firm from Shyamal Mukherjee on January 1, 2020.
“For FY 21, we will grow at the FY 20 level, give or take a couple of percentages—up or down. In the context of the year we have had and the challenges we have faced, this growth to me is a reasonable achievement. I do not think that FY 21 or 22 will also be normal years because there could still be some amount of difficulty in parts of the ecosystem,” Krishan said. “We will start growing at the pre-Covid levels possibly towards the latter half of 2021 or 22.”
Revival in the major services lines in India—audit, tax, consulting and transactions—has been varied for the Big four professional services firms after economic activities restarted in the country with the easing of lockdown restrictions.
“If we look at the advisory side of the business, we are doing fairly ok, as we have a very robust technology business. The challenge has been on our government business as the government is focused on dealing with the pandemic. Deals have stood up quite well. The core consulting side of the business did have a hard landing in the first quarter but again it has seen some recovery now,” he said. “On the tax side, all the compliances have been pushed back, but the advisory side has been pretty good.”
On speculation that a leadership reshuffle is on the cards at the firm after he put in place a new team to drive growth, Krishan said, “I won’t comment on speculation but I will say that one must have people in the leadership team who bring persity of thought, nimbleness and client centricity.”
The audit profession in the country has been under intense scrutiny after a slew of frauds in companies.
In India there are regulations around which services can and cannot be offered by audit firms. Most firms offer audit services through a separate affiliate.
Krishan believes that the profession has to obsess over quality. “Responsibility of this profession is to deliver quality, whether its report to the stakeholders or to the regulators,” he said.
On some Big Four firms like Deloitte and PwC announcing that they won’t provide non-audit services to audit clients, Krishan said, “The big thing for us from a wider profession standpoint is that we sync with what the regulator wants and to be part of that agenda.”
Before taking over as chairman, Krishan was the deals leader at PwC India.
Last year saw a record $39.2 billion infusion of private equity in Indian companies across 814 deals, as per Venture Intelligence. On expected deal activity in 2021, he said, “The numbers were big in 2020 but the market was a bit shallow. Most of the deals took place in specific sectors. I expect that would change in 2021 due to various government reforms that will fuel growth and kickstart the capex cycle.”
Krishan said, “IBC code once in motion will also lead to more deals. And the wave of buyouts and consolidation will continue as a lot of mid-sized corporations have not come out of this crisis well.”
The severity and speed of the Covid-19 pandemic hit India Inc. hard and cash flows were impacted, forcing companies to cut down on budgets and look at new ways of doing business.
“Some of our client conversations have been to understand how they are dealing with the crisis and how they will reorient, restructure and realign the business. These conversations are invariably helpful as they are getting us nearer to our clients,” Krishan said.
PwC will make a big play in transformation services and new hirings will include a larger pool of STEM graduates, he said.