PwC India may take up to two years to reach pre-Covid growth level: PwC India chairman

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.

PwC India may take up to two years to reach pre-Covid growth level: PwC India chairman

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.

Sanjeev Krishan elected PwC India chairman

Mumbai: Sanjeev Krishan was elected the chairman and CEO of PwC India on Thursday afternoon after a hard fought election in which more than 300 of the Big Four firm’s equity partners voted to elect the new leader for a four year term.

Krishan will take over from the outgoing chairman Shyamal Mukherjee on January 1, 2021.

In the election, Krishan, the national transactions leader of the firm secured more partner votes over S Vivek, PwC’s audit leader.

In the first week of October, PwC India’s partner oversight committee had shortlisted two candidates, Krishan and Vivek, out of the three candidates in the running.

During the short listing process, Deepankar Sanwalka, the powerful national advisory leader and a leading candidate for the corner room wasn’t considered for the final voting.

During the last elections however even the short listing process went through a voting process.

In PwC, the election process kicks off by a vetting process of the candidates by the firm’s partner oversight committee and then there’s a 10 day long online voting process in which firm’s partners cast their votes.

ET had first reported on May 18 that 5 candidates were in the fray for the top job; Gautam Mehra, the head of tax and regulatory business, executive committee member Sanjay Tolia, Sanwalka, Krishan, and S Vivek.

Mehra suddenly dropped out last month citing a change of heart and a wish to focus on client work.

Early on, Tolia, the influential market’s leader of the firm too opted out of the elections.

Multiple sources within PwC say Mehra was considered the front runner for the top job.

The tax expert has even expressed a desire to step down from tax leader’s post as he wants to pass on the baton to young leaders who he mentored during his 6 year stint, say sources.

During the election process, the partner oversight committee which oversees the election had requested the PwC headquarters to postpone elections given the uncertainty and the negative impact of Covid-19 on the firm’s India business. The global team didn’t want to postpone and wanted the elections to go as per schedule, say highly placed PwC sources.

The incoming chairman, Krishan has spent nearly three decades in PwC, largely in the firm’s transaction advisory business, where he was instrumental in setting up a high-quality private equity, transaction support and turnaround business in India.

The outgoing chairman, Mukherjee, has put the firm on a solid footing having taken some bold decisions like resigning from risky but high-profile audits where the powerful promoters weren’t disclosing information.

While Mukherjee proactively shrunk the audit practice to focus on marquee and profitable MNCs rather than take on risky accounts to grow the practice, he also made sure the firm placed bets on areas of future growth like analytics, artificial intelligence and big data in a bid to bring more solutions to their clients.

“Mukherjee has put PwC on a firm pedestal for the next orbit change. He never shied away from taking tough decisions and that would help the firm in the long run. Most importantly, he also put the growth drivers for future in place during his tenure,” said a partner who worked closely with Mukherjee.

Top ten consulting firms in India including Deloitte, PwC, EY, KPMG, Grant Thornton, and BDO have a top line of around Rs 18,000 crore, according to people in the know. Most of the large professional services firms in India have elections where partners can decide who their leader could be.

Krishan takes the helm of the firm at a time when the Big Four firms are facing a lot of investor and regulatory scrutiny after a series of high-profile frauds and corporate failures like IL&FS, DHFL and Nirav Modi and business is down due to stalled economic activity after the Covid-19 disruption.

PwC India will be a billion dollar plus firm by 2027: Sanjeev Krishan

PwC India will generate more than a billion dollars a year in revenues by 2027, buoyed by investments that the firm will make over the next five years, Sanjeev Krishan, chairman of the firm, told ET.

PwC will invest more than Rs 1,600 crore and hire over 10,000 professionals in its India practice over the next five years to implement a new growth strategy.

“There are so many growth themes going on simultaneously in India that we have decided to double down on our India practice investments,” said Krishan.

The ground-up strategy was formulated after 4-5 months of intense discussions in which feedback from clients and experts was also sought.

The firm felt that its strategy needed a refresh to help deal with the emerging business landscape and cater to the fast changing client needs and priorities.

“We are calling the strategy ‘The New Equation’ as it addresses what the firm’s clients expect from the firm—build trust and deliver sustained outcomes,” said Krishan.

Trust businesses in the firm include assurance, some parts of tax and a bit of regulatory oversight business, while transactions, consulting and technology are the outcome based service lines.

He said by the end of 2027, PwC aims to have over 25,000 people in its India practice serving clients. This workforce is exclusive of the headcount at backend centres.

Krishan added that while the PwC’s brand was built on trust businesses, the outcome businesses would outgrow it in the next few years in revenue terms.

PwC India’s partnership will fund the entire investment by reinvesting some of its profits each year.

“We are a fairly young partnership and the young partners are of the view that we will get challenged in the marketplace soon if we don’t invest aggressively in our businesses,” said Krishan.

The firm’s new go-to-market strategy will rest on four platforms—ESG, deals, risk and regulatory and transformation.

PwC is also setting up a PwC Research Institute to enable the platforms and help the service line leaders with fresh ideas and inject new innovations while delivering client solutions.

“The idea is to have a composite view of a customer and offer him a cutting edge solution that has various services embedded in it,” said Krishan.

To drive the strategy, the firm is also making some changes in roles and responsibilities of its service line leadership.

The leaders of its go-long sectors— consulting, deals, digital, cloud, cyber, analytics and emerging technologies—will be a part of its ‘markets’ team and won’t have any service line responsibilities. They will specifically focus on developing cross-competency solutions for the clients.

Also, the accountability and investments in the platforms will be centrally driven so that it doesn’t affect P&Ls of inpidual service lines.

Given that transitioning to a new strategy takes time, the firm is looking at one plus five year timeframe for full rollout and implementation.

“We will put all the enablers in the next 6-7 months, and by FY 2022, we should be ready for a full rollout. I am hoping to get all preparations done by Dec 2021 and then test out the new mechanisms for the next three months. By April 2022, we should be on,” said Krishan.

Experts say that the biggest problem with Big Four strategy exercises is that after a while they all end up mirroring each other due to competitive pressures in the marketplace.

So how will Krishan make sure that PwC stays the course?

“We are publicly committing to it, something that no competitor has done. We also believe we have an edge in technology over others and even the market acknowledges that. We will use that strength in technology in creating solutions that are best of breed—and help our clients win,” said Krishan.