📉 Indian IT Stocks Slump on Trump’s H-1B Visa Policy
Market Snapshot (Sept 22, 2025):
- Sensex opened down 475 pts at 82,151, Nifty fell 88 pts to 25,238 before recovering to minimal losses.
- Nifty IT Index slid 3% to 35,482, remaining the weakest sector in 2025.
Top Movers in Early Trade:
✅ Losers (3–6% drop)
- 💻 Tech Mahindra – fell 5% to Rs 1,453
- 🖥️ Infosys – down 3–4%
- 💻 TCS – down 3–4%
- 🏢 Mphasis – down 6%
- 🔧 HCLTech – down 3%+
- 🚀 Coforge – down 3%+
Reason for Sell-off:
- U.S. President Donald Trump signed an executive order hiking the H-1B visa fee from $1,000 to $100,000 per new applicant – a 100x increase, rattling IT investor sentiment.
US Revenue Exposure of Key IT Firms:
- Mphasis – 81% of revenue from the U.S.
- HCL Tech – 66%
- Wipro – 63%
- Coforge – 56%
- Tech Mahindra – 51%
Analyst Insights & Long-term View:
- Jefferies: Talent supply crunch may raise onsite wages → profit drag 4–13%, growth may slow. Large-caps TCS & Infosys best placed; Coforge top mid-cap pick.
- Nomura: Worst-case margin impact 10–100 bps; sharp corrections could be buying opportunities. Top picks: Infosys, Cognizant, Coforge, Firstsource.
- BofA Securities: EPS risk 7–17% over 3 years; companies can mitigate via offshoring/near-shoring. Tech Mahindra most exposed.
- ICICI Securities: $100,000 H-1B fee → ~100bps margin headwind, 6% EPS impact; shift to local US talent could nullify impact.
- Motilal Oswal: First impact likely FY27; fewer H-1Bs reduce onsite revenues but also lower onsite costs → potential neutral EPS effect, slower top-line growth.
Key Takeaway:
While IT stocks faced immediate pressure due to U.S. policy changes, strategic mitigation via offshoring, localisation, and reduced H-1B dependence could limit long-term impact. Some mid and large-cap players may even benefit from higher offshore profitability over time.
