Moody’s Investors Service on Wednesday affirmed the ratings of two major Indian IT services companies, Tata Consultancy Services Limited (TCS) and Infosys. In two separate statements, Moody’s also retained a stable outlook for both the companies.
Moody’s expects Infosys’ revenues to climb by around 13 per cent for the financial year ending March 31, but moderate to around 8 per cent in the next 2024 fiscal.
“Moody’s Investors Service has affirmed the Baa1 local currency issuer rating of Infosys Limited. The rating outlook remains stable,” it said in a release.
The rating affirmation reflects Infosys’ position as one of the world’s leading information technology (IT) solutions and services providers with globally diversified cost-competitive operations that translate into its sustained, strong profitability and robust credit profile, Kaustubh Chaubal, Moody’s senior vice-president, said.
“Infosys’ good corporate governance practices, reflected in its extremely strong balance sheet, large liquidity and net cash position, support its Baa1 rating,” Chaubal said.
A vast majority of Infosys’ workforce is based in India. The company is exposed to changes in regulations and tax laws in India. Given this exposure, Infosys’ rating is constrained at two notches above the rating of its country of domicile and incorporation, India (Baa3 stable), based on Moody’s cross-sector methodology.