Fitch rates Tulip IT Services F1

Fitch Ratings said it assigned a national short-term rating of F1(ind) to Tulip IT Services Ltd.'s Rs.600 million commercial paper program. The program is carved out of the fund-based working capital banking lines of the company.

The rating takes into consideration its established position in network integration services and the corporate data connectivity business, steady growth in revenue and improvement in the EBITDAR margin, Fitch said.

The rating also is supported by increasing broadband penetration in India, due to demand from both the private sector and the government, the agency added.

The rating is moderated by the stiff competition and low margins in the network integration business and the threat of entry of bigger players in the data connectivity business, including telecom companies, Fitch said.

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