Wipro Ltd.

If Wipro stays in a net positive cash position, its credit profile will likely be independent of the sovereign rating on India. The company's large share of revenues from higher rated geographies and its diversified and flexible asset base support our view. The stable outlook on Wipro reflects our view that the company will maintain its good competitive position and profitability, and a net cash positive position over the next 24 months, absent significant acquisitions. We may lower our rating on Wipro if: (1) its business position weakens such that its EBITDA margins fall materially below 20%; or (2) the company significantly increases its leverage, with the ratio of its debt to EBITDA rising above 1.5x, possibly because of acquisitions

...Wipro's revenue growth will slow over the next 12-18 months because of reduced global IT spending. We estimate that global IT spending will contract by 4% in 2020, in line with our expectation of a 3.8% decline in global GDP because of the COVID-19 pandemic. Demand for discretionary IT software and services is likely to remain weak as clients trim budgets to conserve liquidity. We anticipate Wipro's revenues will remain flat or contract marginally in fiscal 2021 (year ending March 31) compared with a 4.2% increase in fiscal 2020....

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