Wipro assigned L Triple A rating by ICRA

Credit rating agency ICRA has assigned LAAA (pronounced as L Triple A) rating to the Rs 34.24 billion fund based limit and the Rs 6.61 billion Non Fund based limit of Wipro (Wipro). This is the highest credit quality rating assigned by ICRA to long term instruments.

The rating is supported by the continuing global trend towards outsourcing of IT services to low-cost countries like India. The rating also factors in the concentration of Wipro's revenues on the US market, the vulnerability of profitability and the high, although declining proportion of low-value added services in the overall sales mix.

The rating factors in Wipro's leading position among Indian players in the Global Information Technology (IT) services outsourcing segment, its strong client base and wide range of services, and the low financial risk profile given its strong revenue growth, healthy recurring cash flows and low debt levels, a company release said.

While the US remains the largest market for the Indian IT services industry, the current slowdown in the US economy coupled with increasing competitive pressures, wage inflation, high attrition levels and the weakening dollar would exert pressure on profitability of Indian players, the  release said.