April 4: Infosys Technologies today pierced the sovereign rating when Standard & Poor?s (S&P) graded its overseas loans as BBB- and local currency borrowings as BBB.

?This reflects Infosys?s very conservative financial profile and policy, which feature ample liquidity, strong operating cash flow, and a debt-free balancesheet,? said Standard & Poor?s credit analyst Greg Pau, director in the corporate and infrastructure ratings group.

Pau said the firm?s good track record in the industry, its strategy of funding expansion through internal cash resources, coupled with a good debt capacity, should allow it to maintain a strong financial profile in adverse business conditions. The rating boost comes at a time when Infosys is all set to unveil its fourth quarter results for the period ended March 31.

In March, S&P assigned Tata Steel a BBB local currency rating, which was two notches above India?s sovereign rating. The foreign currency rating for Tata Steel is on a par with the sovereign rating.

Infosys board member and chief financial officer T. V. Mohandas Pai said, ?Indian companies are globalising rapidly and a good credit rating is a competitive advantage.?

S&P said Infosys has benefited from its skilled but relatively low-cost workforce. This cost advantage, according to the international rating agency, enables Infosys to offer competitive prices while maintaining a superior margin compared with its global competitors.

?The quality of service has been good. This is indicated by on-time and on-budget delivery of over 90 per cent of its projects,? it said.

S&P, however, warned that Infosys is exposed to a degree of sovereign risk, as its workforce is located primarily in India. Moreover, its revenues generated abroad is required to be repatriated under the country?s current foreign exchange regime.