TCS, Other Tech Firms To Face Investors Over Trump's H-1B Visa Shock

Tata Consultancy Services Ltd. will be the first Indian IT firm to face investors after Donald Trump moved to curb a key work visa, sending the company's shares tumbling and dimming its earnings outlook. 

IT services firms are assessing the impact of Trump raising the fee for the H-1B visa to $100,000. TCS is the second-heaviest user of the visa type as it deploys thousands of engineers across client offices in America. While TCS and peers have been reducing their dependence on the visa in recent years, the added cost is expected to dent profits. 

The move may reduce earnings by between 4 per cent and 13 per cent across the sector, as the fee will entirely offset operating profits per employee on the visa, while a shift away from H-1B users will lead to a talent supply crunch and drive up wages, analysts at Jefferies said. Crisil Intelligence analysts expect the new visa costs to be passed on to clients, limiting the impact on margins to just 10-20 basis points. 

The uncertainty has pushed the NSE Nifty IT index 7.3 per cent lower since Trump's September 19 announcement. The sector was already dealing with tighter technology budgets at large US corporations, slowing discretionary spending and the ceding of market share to global capability centres.

Over in Japan, Fast Retailing Co. may see its slowest growth in profit since 2023 as weaker sales in China drag earnings. Seven & i Holdings Co.'s shift to a stand-alone convenience-store strategy, a 2 trillion yen ($13.6 billion) buyback and a potential 7-Eleven IPO could lift return on equity above 15% by 2030, Bloomberg Intelligence said.