Infosys, TCS, HCL, Wipro: Impact of H-1B visa fee hike on stocks, earnings, IT jobs

IT stocks such as Infosys Ltd, Tata Consultancy Services (TCS), Wipro, HCL Technologies and Tech Mahindra may see selling pressure today, September 22, after the White House announced a revised H-1B visa fee of $100,000, even as it clarified that it would be applied only to new applications and not as an annual charge. Stock analysts tracking the IT sector said an increase in visa fee from the current $1500 is likely to affect the operations and financials of Indian IT companies, but the impact should be limited. That said, second order effects such as uncertainty over near-term deal wins may drag IT stocks, they said.  

Impact on margin, order inflows
Nuvama said if firms decide to continue to use their current H1B visa dependent workforce by paying a higher fee, the impact on margins is likely to be around 50–150 basis points, depending on the size of H1B visa-dependent workforce. "This of course is only theoretical and we forecast companies shall use H1B visa only for absolutely critical and irreplaceable job profiles. Practically, the impact would be much lower," Nuvama said.

Besides, a second order impact could be the emerging uncertainty around the new fee, which may affect the near-term pipeline, as deals currently in progress may be delayed or put on hold. IT companies may also struggle to finalise pricing and cost estimates due to the added uncertainty caused by the fee, Nuvama said.

H-1B visa turns economically unviable
To be sure, TCS is the biggest Indian receiver of H-1B visas at 5,505. Infosys (2,004), LTIMindtree (1,844), HCL America (HCL Tech arm, 1,728) and Wipro (1,523) are among other key beneficiaries, as per the data compiled from US Citizenship and Immigration Services.

Since H-1B lotteries and petitions are typically run in Q4–Q1, the first impact would likely be seen in FY27 petitions, MOFSL said.

"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," MOFSL said.

Nuvama noted that the typical cycle of an H-1B visa (3+3 years) means companies will have to shell out $100,000 only once in six years. Nuvama believes most IT services companies will choose not to pay this higher fee. The current median H-1B salary for Indian IT firms ranges between $80,000 and $120,000. The higher fee makes the H1B visa economically unviable.

"We believe Indian IT companies shall mitigate this impact by higher nearshoring/offshoring and/or hiring local talent. Over the last eight years, the industry has anyway reduced its reliance on H-1B visas significantly. However, some near-term impact on operations and financials shall have to be borne by the companies. In the long-term, higher offshoring is likely to mitigate a large part of the impact," Nuvama Institutional Equities said.

H-1B visa: Impact on jobs

With localisation drives in the US and higher local hiring, only 20 per cent of employees are currently based on-site. Of this, 20–30 per cent are on H-1B visas, implying that H-1B holders represent just 3–5 per cent of the active workforce for a typical vend.  Visa applications for FY26 are already locked in. The new fee will start to impact from FY27 onwards, when new petitions are filed.

"Given the magnitude of this fee, it is likely that Indian IT companies will avoid new H-1B filings altogether, opting instead to expand offshore delivery or increase local hiring," MOFSL said.

The brokerage noted that the order is likely to be challenged in US courts and may not survive in its current form.

What happens next? 
Export-driven sectors are already grappling with tariff-related pressures, this move should further weigh on IT services exporters at a sensitive time when trade negotiations remain underway, said Ajit Mishra – SVP, Research, Religare Broking.

A White House Fact Sheet highlighted that the proportion of IT workers holding H-1B visas has climbed from 32 per cent in FY2003 to more than 65 per cent in recent years. It cited instances of IT companies simultaneously securing approvals for H-1B workers while laying off U.S. employees.

One company, for example, received approvals for 5,189 H-1B workers in FY2025 even as it laid off nearly 16,000 U.S. employees this year. Another firm secured 1,698 H-1B approvals in FY2025 but announced the layoff of 2,400 U.S. workers in Oregon in July. A third company has reduced its U.S. workforce by 27,000 since 2022 while being granted 25,075 H-1B visas. The fact sheet did not disclose the names of these firms.

Meanwhile, Tata Consultancy Services (TCS) reported a headcount of 613,069 employees at the end of the June quarter, with employee costs at 47.6 per cent—close to an all-time high. Infosys had 323,788 employees in Q1, of which 23.6 per cent were onshore staff.