H-1B Visa Fee Hike and the Divergent Impact on Indian IT Stocks

The Nifty IT index dropped 8% following the US increase of the H-1B visa fee, which now costs companies an additional $100,000 per visa. → Tier-I IT stocks (e.g.,

, ) have shown greater resilience, with shares slipping less than 6%, largely due to wider margins, deeper financial capacity, and success in offshoring, local US hiring, and setting up delivery centers. → Conversely, some mid-cap IT stocks like , , and experienced sharper declines, falling 10-14%. → Ltd displayed relative strength, dropping only 6.4%, partly because its lower onsite effort-mix of 15% offers comfort to investors, compared to the 20-30% typical for most mid-cap peers. → LTIMindtree's lower onsite presence is attributed to factors like automation, AI-led benefits, client-driven cost-saving efforts, and a diversified client base where the top 10 contribute only about one-third of total revenues. → This high US exposure, coupled with client-side tightness in IT spending and its large reliance on discretionary IT projects (60-65% of revenue), makes LTIMindtree particularly vulnerable amid US policy uncertainty. The company's H-1B visa dependence is high, at 35%—among the largest in the sector—further exposing it to the increased visa costs. → LTIMindtree's Q1FY26 revenue growth was a moderate 7.6% (or a constant-currency 4.4%), dampened by only 4.2% growth in the crucial US market, despite good growth in other regions (Europe and RoW saw 7-10% growth) and strong exposure (37%) to the well-performing BFSI sector. → Currently trading 24% below its 52-week high and at a relatively discounted valuation of 32x its trailing earnings, LTIMindtree's ability to break out of its recent range-bound trading trend depends on resolving these core business and integration challenges.