Will Trump’s H-1B Visa Fee Hike Sink Indian It Stocks?

Mumbai: Investors must brace themselves for a sale in Indian It’s in stock at the beginning of this week after the US President Donald Trump increased the one-off costs of H-1B-VISA to $ 100,000 (£ 88 Lakh) on Friday, rattling sentiment in a sector that had only recently seen signs of a rebound.

Analysts expect the shares to take an immediate hit when the markets open on Monday.

“The stocks can witness the knee shock reaction on Monday and can open the gap with a reduction of 1-3%,” said Sunny Agrawal, head fundamental research at SBI Securities.

However, Agrawal noted that the impact is probably limited, because the new law only applies to new visas. The one-off reimbursement is imposed on new H-1B requests and is not an annual costs. Existing H-1B holders will not get any additional costs for extensions or re-enter to the US, and can continue to travel current visa holders as before.

From a broader perspective, analysts regard the movement as emphasizing deeper challenges for the Indian IT industry.

“Now companies will shift jobs to India or charge more. From a medium to long -term perspective, it is negative,” says Siddarth Bhamre, head – institutional investigation, Asit C Mehta.

According to analysts, the new rule marks an important shift in the economy of deploying Indian technical talent in the US. IT companies can accelerate or hire more locally offshoring to India, but both options can weigh with profitability. For larger players such as TCS, Infosys and Wipro, the cost escalation is considered manageable in the short term, but medium companies with greater dependence on fresh H-1B goods inspections can feel a sharp impact. “Costs of arbitration between sending Indian employee in the rules and the influence on the rules in the rules in the rules. If the existing H-1B holders also apply, the impact can be deep and the pressure on margins can be between 100-400 BPS.

Year-to-date, the shares went through a fleeting ride. TCS has fallen 23%, Infosys has fallen by 18%and Wipro has fallen by 14.6%. In the first half of the year, the sector was under pressure in the midst of global demand problems and a weak profit commentary, but in recent weeks after reconciling comments from Trump Gerally was on rates that increased the worst that the worst was over. The last visa announcement threatens to derail that recovery, at least in the short term.

The advice remains mixed for investors. Agrawal said that existing investors do not have to hurry to leave.

“Existing investors are not allowed to panic and evaluate the weight of IT shares in the portfolio and must agree in terms of churning the portfolio. If your portfolio includes more than 20% weight in the IT shares, it is better to gradually reduce and switch to other sectors looking inside.” He also warned that new investors should wait for management commentary before they enter new positions when it is sharp correctly in stock.

Bhamre, on the other hand, recommends it to be completely steering. “My opinion is to completely put the sector aside. Some people say that halfway through the cap looks strong, but the ratings are still expensive. They do not grow with 25-30% top line to recommend 35-40 PE-VEGVOUDEN, they grow with less than 15%. There is still room for correction.”