Infosys beats sovereign rating

Infosys Technologies Limited, Bangalore-headquartered IT services company has been credit-rated higher than sovereign India by rating agency Standard & Poor (S&P), an Infosys release said here on Monday.

That the rating gives Infosys access to debt at superior rates may be less significant for the cash rich company than the prestige the rating confers on it among its peers and customers.

S&P has rated Infosys 'BBB' (local currency) and 'BBB-' (foreign currency), which makes its ability to repay debt, were it to incur some, better than that of the Indian government. S&P's sovereign rating for India is BB+/Stable/B, the release said.

The rating reflected Infosys' very conservative financial profile and policy, which feature ample liquidity, strong operating cash flow, and a debt-free balance sheet.

As on December 31, 2004 or the end of the third quarter of fiscal 2004-05, Infosys' cash or cash equivalents had increased by Rs. 236.26 crore over the previous quarter to touch Rs. 2,738.33 crore.

"Infosys' good track record in the industry, its strategy of funding expansion through internal cash resources, and good debt capacity should allow the company to maintain a strong financial profile in more adverse business conditions too," said credit analyst Greg Pau, a director in the corporate and infrastructure ratings group of S&P.

"Indian companies are globalising rapidly and good credit rating is a competitive advantage. This rating proves that the Indian Industry is coming of age globally," said T V Mohandas Pai, Infosys' CFO.