NEW DELHI: Shares of Indian IT majors extended losses on Monday after the latest H-1B visa policy changes rattled sentiment. Mid-tier firms like Persistent Systems, Tech Mahindra, LTIMindtree, Mphasis, and Coforge, along with large-caps including TCS, Infosys, and HCLTech, slipped between 3% and 6% in early trade.
Tech Mahindra fell over 5% to hit an intraday low of Rs 1,453, while Infosys and TCS dropped between 3 and 4% each on the NSE. Mphasis tumbled nearly 6%, and both HCL Tech and Coforge were lower by more than 3%. The Nifty IT index, already the weakest sectoral performer of 2025, slid over 3% to 35,482.
India’s equity market benchmark index - BSE Sensex fell 475.16 points to 82,151.07 in opening trade while Nifty declined 88.95 points to 25,238.10. The indices recovered later and were trading with minimal losses.
The sell-off in the IT pack came after U.S. President Donald Trump signed an executive order hiking the H-1B visa application fee from $1,000 to $100,000 per applicant — a hundredfold increase applicable to fresh applications.
Despite the market reaction, some IT players, including Persistent Systems, Coforge, and Mphasis, maintained that the move would have minimal to no operational impact on their businesses.
The Indian technology services outsourcing sector, valued at $283 billion and including companies such as Tata Consultancy Services, Infosys, HCLTech and Wipro, derives more than half of their earnings from the United States, whilst maintaining its primary workforce in India. Firms such as Mphasis generate more than 81% of their revenue from the US market while for HCL Tech this number is around 66%. Wipro sees nearly 63% of revenue from the US market, Coforge 56% and Tech Mahindra about 51%.
Brokerage firm Jefferies said that it expects a talent supply crunch to drive up onsite wages, which could drag profits by 4% to 13%, adding that growth may also slow amidst operating model shifts, macro pressures and AI risk. Among the large-cap stocks, Jefferies sees TCS and Infosys to be well placed, while Coforge is best placed among the mid-cap names.
Nomura said that in a worst-case scenario, it expects an impact between 10 basis points to 100 basis points on the company's margins for the entire coverage universe. It added that any sharp correction would be an accumulation opportunity and that Infosys and Cognizant among the largecaps are its top picks, while Coforge and Firstsource are among the top midcap picks.
BofA Securities said that the new H-1B visa fees norms pose a gross pre-mitigation Earnings Per Share (EPS) risk of 7% to 17% over a three-year period. Companies now have a clear 12 months to plan and kick in mitigations like offshoring and near-shoring, the risks can completely nullify the impact and risks over the next three to five years, BofA Securities said, adding that Tech Mahindra is the most exposed among these names.
ICICI Securities said that the $ 100,000 levy on onsite employees on H-1B visas would imply 100bps average headwind on margins and 6% average impact on earnings per share (EPS), considering IT companies continue to employ new people on H-1B visas.
“Alternatively, if companies pivot towards hiring local US talent while maintaining a favourable employee pyramid (similar to their offshore model), the impact on margins is likely to remain negligible – consistent with the experience during the previous Trump regime. In our view, IT companies would further reduce dependence on the H-1B visa and increase localisation. In the medium term, we believe IT services companies should benefit from this move, as it would trigger higher offshoring to reduce costs,” it added.
Analysts at Motilal Oswal said that since H-1B lotteries and petitions are typically run in Q4–Q1, the first impact would likely be seen in FY27 petitions. If new H-1Bs vanish, on-site revenues will decline, but so do on-site costs. This shift could improve operating margins, as offshore work tends to be structurally more profitable. The net effect on EPS could be neutral in the medium term, although top-line growth could be slower.”