CLSA believes the US administration’s $100,000 fee on new H1B visa applications will have a limited impact on Indian IT services firms, as the measure applies only to fresh applications and not to renewals or the existing H1B visa stock. The brokerage estimated a maximum 6% hit to FY27 earnings for its coverage universe, assuming firms bear the full cost burden without passing it on to clients and continue filing fresh applications at historical averages.
It said the actual impact is likely to be lower, as companies are expected to moderate new filings or share costs with clients. Within its coverage, LTIMindtree and Persistent Systems face the highest potential impact, at around 6%, while TCS is least affected at about 1%.
CLSA reiterated that the broader sector growth trajectory remains intact, with the fee hike unlikely to materially alter fundamentals.
Disclaimer: The views and recommendations made in this article are those of CLSA. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.