The ratings on France-based Cap Gemini S.A. reflect the intensely competitive nature of the IT services industry, which results in low margins and frequent capacity adjustment costs for the company. These factors are partially offset by Cap Gemini's broad and diversified capabilities in IT services--a relatively credit-friendly segment of the technology sector--and the company's conservative financial policies and financial profile. Organic revenue growth has been a solid 10%-11% over the past few quarters, showing gains in market share and new outsourcing contracts, as well as significantly improved demand for consulting services. The group is now in heavy recruitment mode, particularly for its "offshore" centers in Central Europe and India. The group's North American operations, which have been a drag on
