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Indian IT firm’s US-listed shares fell overnight following American President Donald Trump’s executive order slapping an additional fee on H-1B visa holders. Infosys ADRs dropped 4%, while Wipro slipped 2% on Friday.Nasdaq-listed Cognizant declined 4.7% on Friday, reflecting investor concerns over stricter immigration policies. Experts warn of an immediate impact on profit margins. “The immediate impact might be on margin. If the existing H-1Bs have to be renewed next year under the new rule, it will have a major impact. Otherwise, companies can manage margins,” said Pareekh Jain, CEO and lead analyst at Pareekh Consulting. Amid uncertainty and prospects of legal challenges, he cautioned that if the rule applies to existing visa holders, it could shave 1% to 2% off sector-wide EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) margins.Jain added that most subcontractors and local hires in the US — including Indian students entering the workforce via the H-1B route — will be affected, raising delivery costs for IT service providers. According to Venkatraman Narayanan, MD and CFO of Happiest Minds, Indian IT companies now face higher costs.However, he added that “with 94% of our business driven offshore and a global delivery model built over 14 years, we do not foresee significant disruption, though some operational adjustments are inevitable in the short term”.
