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Below the Quote on Impact of H1B Visa Policy on IT Sector by Sumit Pokharna by Sumit Pokharna, VP Fundamental Research, Kotak Securities

The Trump administration’s decision to impose a one-time $100,000 fee on new H-1B petitions marks a dramatic shift in U.S. immigration policy, especially for IT companies. While the $100k fee is not an annual fee but a one-time fee that applies only to the petition and applicable only to new visas, not renewals or current visa holders. We expect to see its impact in the next upcoming lottery cycle from 2HFY27, and the full impact will be seen in FY28. The impact could be lower with a few offsets, including higher use of nearshore and offshore locations. Our bear case assumes no changes in sourcing patterns and increased competition for onsite talent, leading to 10% wage inflation, in which companies would have ~100-200 bps margin impact and 7-14% on FY27E EPS. Our base case is that companies would prefer replacing expiring H-1Bs with subcontractors in the near term, paying 20-25% higher wages on average.

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