The rating on Infosys Ltd. reflects the India-based information technology (IT) services provider's conservative financial policy and strong free cash flows. The ratings also reflect the company's robust EBITDA margins, which are among the highest in the industry. The constraints of largely India-based operations and Infosys' exposure to exchange rate fluctuations temper the above strengths. Healthy and stable cash flows support Infosys' modest financial risk profile. Revenues from repeat business (about 98%) underpin the cash flows. The company's largely India-based workforce provides it with low-cost, skilled manpower. We expect Infosys to grow at a faster pace than the global industry due to the company's competitive cost position and proven delivery capability. The company's growth in the first half of the
