Tata Consultancy Services (TCS), India’s largest IT services exporter, has borne the brunt of the recent US H-1B visa policy changes, with its market capitalization tumbling ₹97,597 crore to ₹10.49 lakh crore in the week ending September 27, 2025. The decline, triggered by the Trump administration’s September 21, 2025, hike of the one-time H-1B application fee to $100,000 for new visas, has amplified broader pressures on Indian IT stocks, including weak demand, generative AI disruptions, and Accenture’s subdued Q4 FY25 results. TCS shares hit a 52-week low of ₹3,063 on September 22, erasing gains from December 2024’s peak of ₹4,494—a 35% drop overall—and contributing to a ₹4 lakh crore shareholder wipeout year-to-date.
This isn’t isolated pain: The Nifty IT index plunged 7.4% over six sessions through September 25, costing constituents ₹1.8 lakh crore in value, with the top-10 IT firms collectively down ₹63,000 crore on September 22 alone. For investors, executives, and policymakers, the H-1B hike underscores vulnerabilities in the $245 billion Indian IT export sector, where 70% of US onsite talent relies on such visas. Let’s dissect the triggers, sector-wide impacts, and paths forward.
The H-1B Fee Hike: A $100,000 Sting for Indian IT Giants
The Trump administration’s move—effective for new applications post-September 21, 2025—imposes a $100,000 fee on employers, up from $460, to curb outsourcing and prioritize American workers. Existing H-1B holders are exempt upon re-entry, but the policy opens a 30-day consultation, hinting at further tweaks like wage floors or caps.
For TCS, which employs over 50,000 in the US (many on H-1Bs), the hike could inflate costs by 10-20% for onsite talent, squeezing margins already under 25% pressure from AI automation. Analysts like Ponmudi R of Enrich Money attribute the “heavy unwinding” to fears of wage inflation (up to 10%) and subcontractor hikes (20-25%), potentially denting FY27 EPS by 7-14% in bear scenarios.
TCS’s stock reaction:
- September 22: Down 2.07% to ₹3,104, low of ₹3,063; volumes spiked 2.29 million shares.
- Week Ending Sep 27: Cumulative 6% drop, wiping ₹97,597 crore—biggest among top-10 firms.
- YTD 2025: ₹4 lakh crore loss, worst Nifty IT performer at -35%.
Sector-Wide Fallout: ₹1.8 Lakh Crore Evaporated, Nifty IT in Red
The H-1B shock compounded Accenture’s September 26 earnings miss (7% revenue growth but AI warnings), fueling a six-day sell-off. Top-10 IT firms lost ₹2.99 lakh crore last week, with TCS leading the bleed.
Market cap hits (September 22-27):
| Company | Market Cap Loss (₹ Crore) | % Decline | Notes |
|---|---|---|---|
| TCS | 97,597 | ~9% | Biggest hit; 52-week low. |
| Infosys | ~30,000 | 6% | Low of ₹1,480; diversified ops buffer. |
| HCLTech | ~25,000 | 5.5% | Second-worst YTD (-27%). |
| Wipro | ~15,000 | 4.8% | Offshore focus mitigates. |
| Top-10 Total | 2,99,661 | 2-6% | Nifty IT down 7.4%. |
FII outflows accelerated, with rupee at record lows adding forex pain for USD-earning firms. Coforge and Persistent disclosed minimal impact via subcontractors, but TCS’s scale amplifies exposure.
Analyst Views: Near-Term Pain, Long-Term Resilience?
Experts remain cautiously optimistic: Kotak Institutional Equities flags 100-200 bps margin erosion but notes offshore models (70-80% of delivery) absorb shocks. TCS’s Q2 FY26 results (October 9) could stabilize sentiment, with promoter holding steady at 71.77% signaling confidence.
Buy/sell signals: Neutral to buy on dips, with targets ₹3,500 (Emkay) if AI deals ramp up. Risks include further tariffs and FII exits.
Conclusion: TCS’s H-1B Headache – A Wake-Up for IT’s US Reliance?
TCS’s ₹97,597 crore market cap loss since the H-1B fee hike exemplifies the sector’s vulnerability to US policy whims, blending visa woes with AI uncertainties. While short-term volatility persists, diversified ops and cost controls could cushion the blow. As Q2 earnings loom, TCS—and Indian IT—must pivot faster to onshore innovation to weather the storm. mint
