AI-Summary – News For Tomorrow
Analysts predict potential changes in US visa regulations will negatively impact the Indian IT sector, already facing challenges like AI deflation and a slowing economy. Kotak Institutional Equities warns of pressured valuations. HDFC Securities estimates a 5-7% revenue/EBIT impact. Infosys, TCS, and Wipro are expected to be significantly affected. While big tech firms utilize more H-1B visas overall, Indian IT companies are proactively mitigating risks through nearshoring and increased local hiring, reducing their reliance on the H-1B program over the past eight years. This strategic shift aims to control costs and comply with regulations.
News summary provided by Gemini AI.
Kotak Institutional Equities stressed that for a sector grappling with challenges from AI-driven deflation, a slowing macro environment and the diversion of spending toward inflationary software and hyperscalers, potential changes in visa regulations add another layer of concern. The elevated uncertainty can pressure multiples, it said.
According to HDFC Securities, the revenue or EBIT impact over the medium term would be 5 or 7 per cent, with a margin impact of 50 bps.
Significant impact – Infosys, TCS and Wipro
Meanwhile, Motilal Oswal said, big tech firms like Google, Amazon, Microsoft and Meta have a larger share of fresh H-1B applications than Indian ITs.
Strategic shifts: nearshoring and local hiring
Nuvama Institutional Equities’ report indicated that companies are likely to reduce H-1B visa impact by nearshoring and hiring local talent. This approach aims to mitigate the increased costs and ensure compliance with US labour regulations.
The brokerage also noted that over the past eight years, the Indian ITs have significantly reduced their dependence on H-1B visas.
Published on September 23, 2025
