Now Reading: TCS, Infosys lead IT stock rout on H-1B fee hike fears
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TCS, Infosys lead IT stock rout on H-1B fee hike fears
Shares of Tata Consultancy Services (TCS), Infosys, and L&T Infotech (LTI) fell on Monday after the US government's proposed hike in H-1B visa fees cleared a key White House review. Kotak Institutional…
Shares of Tata Consultancy Services (TCS), Infosys, and L&T Infotech (LTI) fell on Monday after the US government's proposed hike in H-1B visa fees cleared a key White House review. Kotak Institutional Equities also downgraded the three stocks, adding to the selling pressure.
The H-1B fee proposal, which would raise the cost of hiring foreign tech workers, is seen as a headwind for Indian IT companies that depend on the visa program for their US operations. The White House Office of Management and Budget's approval is the last administrative step before the rule can be published.
TCS fell 3.2%, Infosys dropped 2.8%, and LTI lost 4.1% in early trade. The Nifty IT index declined over 2%, underperforming the broader market. Kotak cut its rating on TCS to 'sell' from 'add', Infosys to 'sell' from 'reduce', and LTI to 'reduce' from 'add'.
Indian Opinion Analysis
The H-1B fee hike, if enacted, would raise the cost of bringing skilled workers to the US, directly impacting Indian IT firms that rely on the visa program for on-site delivery. Kotak's downgrade adds selling pressure on the sector's largest companies. The White House review is the final step before the rule is published, meaning a decision is imminent. TCS and Infosys together earn over half their revenue from North America, so even a modest cost increase could trim margins by 50-100 basis points. Investors should watch for the US Federal Register publication date, which will trigger the 60-day compliance window for companies.
Source: ndtvprofit.com
This story was synthesised by AI from the source linked above.
