Fitch affirms IBM India at AAA (ind)

Fitch, a global rating agency has affirmed IBM India's National Long-Term rating at 'Fitch AAA (ind)'. And the rating outlook is stable.

Fitch said that its ratings and outlook reflect that IBM India has a prominent position in the domestic servers and storage devices market with a well-established brand name. And IBM's outsourcing business in India has contributed significantly for its revenues.

The agency opined that the strong bonding with its parent company is IBM India's strength and orders from parent company are being executed on a cost-plus basis but there are no legal ties between them. However, the agency believes that IBM-IBM India relationship is of a strong parent and weak subsidiary and hence has notched down the rating of IBM India from that of IBM. International Business Machines Corp. Inc was affirmed at 'A+'/Stable/'F1.'

"Fitch believes that India will likely remain a key outsourcing destination for IBM based on the country's low-cost labour and large talent pool," said a statement. IBM India has a prominent position in the domestic servers and storage devices market with a well-established brand name.