Indian IT Stocks React to $100,000 H-1B Visa Fee...Buy or Stay Away? TCS, Infosys...
- Mani Metto
- 2 days ago
- 2 min read
The US government’s announcement of a $100,000 annual one-time
fee for new H-1B visa applications has shaken India’s $283 billion IT services industry. With 71% of H-1B visa holders being Indian nationals and the US contributing 62% of IT export revenues, the move has triggered a sharp market reaction but it may also open up selective buying opportunities for long-term investors.
The Numbers Behind the Shock
399,395 H-1B visas were approved in 2024, and 283,415 went to Indians
Visa issuance to top Indian IT companies has already declined 31% since 2015
The $100,000 fee is a 2,000%–5,000% jump from the prior $2,000–$5,000 range
This means the traditional model of flying talent onsite to serve clients will become cost-prohibitive, forcing companies to adapt faster to local hiring and automation.
Immediate Market Impact
Indian IT stocks dropped 2–6% on September 22, 2025, as investors priced in:
Talent supply disruptions
Rising onsite wage costs
Near-term margin compression
But analysts are already signalling that panic selling may be overdone:
Nomura: Margin impact limited to 10–100 bps, sees corrections as an accumulation opportunity
Jefferies: Worst-case margin hit of 4–13%, but notes accelerated automation could offset costs
Emkay Global: Cut export growth forecast from 5% to <4% for FY26- still positive growth
Why This Could Be a Buy-on-Dip Moment
Structural Shift Already Underway
TCS, Infosys, and Wipro have reduced H-1B dependency over the past decade and now hire 50%+ of their US workforce locally. This cushions the impact.
Operational Levers Available
Accelerated offshoring to India
L-1 visas for intra-company transfers
AI-led automation to cut headcount requirements
Geographic diversification into Europe, Asia, and the Middle East
Strong Balance Sheets & Cash Reserves
Most Tier-1 IT firms have net cash positions, enabling them to absorb shocks and continue shareholder payouts.
Valuation Support
The sector has corrected meaningfully. If earnings multiples revert to mean levels post-adjustment, long-term investors could see double-digit CAGR returns.
What to Monitor Over the Next 6–12 Months
US Policy Clarifications: Whether the fee is negotiable or phased in
Client Contract Renewals: $13B worth of renewals due by Dec 2025
Hiring Trends: Watch local hiring announcements and automation investments
Margin Commentary: From Q3 and Q4 FY25 earnings calls
Bottom Line
Yes, the $100,000 H-1B fee is a shock- but it also accelerates the sector’s transition toward lower visa dependency, higher-value digital services, and leaner cost structures.
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