Indian IT Stocks Crash Amid US Visa Policy Concerns

The Indian IT sector took a beating on Wednesday as major stocks like Infosys, Tech Mahindra, HCL Tech, and TCS fell in response to concerns over US visa policies. Coforge led the decline after announcing the resignation of its chairman, O P Bhatt, with immediate effect due to an internal audit's findings on the company's board evaluation process.

The IT sector has been under pressure due to various factors, including a prolonged higher-interest-rate environment, which may lead enterprises to be cautious about discretionary IT spending. This could impact demand visibility and revenue growth prospects for Indian IT service providers, according to Vinod Nair, Head of Research at Geojit Investments.

The recent hike in H-1B visa fees also added to the sector's woes, with analysts predicting that paying $4,000 on every H-1B extension and $4,500 on every L-1 will become a running annual bill for firms built on Indian engineers. This could further squeeze margins in the sector, which has already declined by roughly 24% this year.

Analysts also pointed to concerns over AI-led deflation and the impact of stronger US jobs data, which reinforced expectations of tighter monetary policy. However, underlying deal activity remains relatively resilient, making the current weakness more sentiment-driven than fundamental.