Nomura said the US administration’s one-time $100,000 fee for new H1B applications will weigh on Indian IT firms’ margins, estimating a worst-case impact of 10–100 basis points across its coverage universe. The brokerage, however, said any sharp correction in IT stocks triggered by this regulatory change should be seen as an opportunity to accumulate, as the long-term demand environment remains robust.
Its top picks are Infosys and Cognizant in the large-cap space, Coforge in midcaps, and Firstsource Solutions in small caps. Nomura believes these companies are better positioned to absorb the margin impact while sustaining growth momentum.
It added that the higher costs will push IT firms to recalibrate their workforce strategies, but strong demand for digital services should continue to support the sector’s earnings trajectory.
Disclaimer: The views and recommendations made in this article are those of Nomura. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.