S&P Global Ratings on Jan. 17 assigned its A- long-term issuer credit rating to India-based HCL Technologies Ltd., citing its diversified offerings, strong revenue and prudent financial policies. The outlook is stable.

Increasing demand for digital transformation, combined with HCL's ability to integrate digital technologies with its core services, will support the company's business growth, S&P Global Ratings said. The company has an established clientele of about 1,300 as of Sept. 30, 2019, with about 95% repeat business, according to the rating agency.

HCL is the third-largest IT services provider in India, based on 12-month revenue as of Sept. 30, 2019. HCL's revenue diversity would help lessen the effects of changes in business cycles and spending patterns, S&P Global Ratings said.

Through a recent purchase of seven software products from International Business Machines Corp., HCL would be able to further expand its customer base and improve its earnings stability, the rating agency added.

S&P Global Ratings projected EBITDA margins of 23%-24.5% for the company over the next two years, on the back of low-cost workforce and robust offshoring capabilities. The IT company's operating cash flows through 2021 were forecast to be at a range of $1.6 billion to $2 billion.

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