Jefferies has cautioned that the US government’s move to impose a $100,000 fee on new H1B visa applications will materially alter the operating models of Indian IT services companies. The brokerage said the steep fee would entirely offset EBIT per H1B employee, forcing firms to reduce reliance on such visas — which account for 7–12% of revenues — and instead focus on local hiring, subcontracting, and near/offshoring.
It added that a talent supply crunch in the US could drive up onsite wages, resulting in a potential 4–13% drag on profits. Jefferies also warned that growth could slow as companies adapt to these model changes while simultaneously contending with macroeconomic pressures and risks from generative AI.
Among large caps, it said TCS and Infosys appear better placed to navigate the shift, while in the midcap space, Coforge stands out. Jefferies said these companies’ relatively diversified talent strategies and scale advantages make them more resilient.
Disclaimer: The views and recommendations made in this article are those of Jefferies. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.