Mindtree said that India Ratings and Research (Ind-Ra) has upgraded the company's long-term issuer rating to 'IND AAA' from 'IND AA+' and has assigned positive outlook.
The credit ratings agency said that the upgrade reflects India Ratings' expectation of an improvement in Mindtree's business and financial profile owing to the company becoming an integral part of L&T.
Ind-Ra believes Mindtree will continue receiving financial and/or operational support from its parent, which will support its already strong standalone performance, thereby resulting in the strengthening of Mindtree's market position, improving the profitability and bolstering its overall credit profile.
However, developments that could, individually or collectively, lead to a negative rating action include the weakening of Mindtree's linkages with L&T and/or any weakness in L&T's credit profile; a substantial reduction in the revenue and/or a meaningful decline in the EBITDA margins, both on sustainable basis; and any significant debt-funded acquisitions and/or higher-than-expected dividend payouts leading to the consolidated net leverage exceeding 1.0x on a sustained basis.
MindTree is an international information technology consulting and implementation company that delivers business solutions through global software development.
The IT company's net profit rose 28.7% to Rs 326.5 crore on 5% increase in revenue to Rs 2,023.7 crore in Q3 December 2020 over Q2 September 2020.
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