H-1B fees, AI fears hit Indian IT

Large Indian IT firms may see limited hit on FY27 earnings from increased H-1B visa costs; select mid-caps to feel more pain.

- Harsha Jethmalani [e-mail]

The Nifty IT index fell 3% on Monday after a new cog in the wheel emerged for India’s information technology services sector, which is in desperate need of catalysts to revive revenue growth.

The US's onetime fee of $100,000 on new H-IB visa applications, up from $1,000, will make it more expensive for Indian IT services companies to do business in their largest market.

Lately, Indian IT companies have cut dependency on H-IB visas, opting instead to transfer US-related business to Canada or Mexico. H-IB visa changes are expected to have minimal impact on tier-I Indian IT firms’ earnings per share (EPS), while tier-II firms like Persistent Systems Ltd and Mphasis Ltd may face more pressure, despite claiming no operational effect.