S&P upgrades TCS, Infosys and Wipro

S&P upgrades TCS, Infosys and WiproGlobal rating agency Standard & Poor's (S&P) on Friday revised upwards the long-term corporate credit ratings of three Indian software giants, viz. Tata Consultancy Services (TCS), Wipro and Infosys.

S&P raised its long-term corporate credit rating on TCS from BBB+ to A; and on Infosys and Wipro from BBB+ to A-. The agency's outlook on the rating for Wipro and Infosys is `stable', while for TCS the outlook on the foreign currency rating is `negative'.

The agency said it upgraded ratings for the three information technology firms because of their ability to withstand sovereign stress. However, the agency kept the country's Transfer & Convertibility (T&C) assessment at BBB+. A T&C assessment is the rating related with the probability of the sovereign limiting non-sovereign access to foreign exchange required to service debt.

Abhishek Dangra, credit analyst at S&P, said, "We upgraded TCS because we believe the company has the business and financial flexibility to withstand a significant period of sovereign stress and still have enough liquidity to honour all its obligations in a timely manner."

Similar reasons were cited for revising upwards the ratings of Wipro and Infosys.

As per S&P's assessment, the financial risk profile of TCS, Wipro and Infosys, are "minimal", and the firms have noteworthy surplus cash, strong cash flows and minimal debt.