IT sector defies US green card suspension worries to rally 3%; here's why
IT stocks: All index constituents traded in the green, buoying the 10-stock Nifty IT 3.13 per cent to 28,604 during the intraday session.
IT stocks: Major Indian IT stocks rallied up to 5 per cent in Friday's intraday trade, shrugging off concerns over the latest US visa curbs, as encouraging quarterly results from index bellwether Tata Consultancy Services (TCS) and expectations that already-tightened H-1B visa hiring would limit the impact of the new guidelines lifted sentiment. All index constituents traded in the green, buoying the 10-pack Nifty IT 3.13 per cent to 28,604 during the intraday session. TCS, which reported better-than-expected Q2 performance, was the top gainer with a 4.61 per cent rise to ₹2171.7.
Mphasis, Coforge, LTM and Persistent gained over 3.5 per cent each. HCL Technologies and Infosys added 2.9 per cent each, while Tech Mahindra rose 2.6 per cent and OFSS 2.4 per cent. (function(){function e(){window.addEventListener('message',function(e){if(e.data['datawrapper-height']!==void 0){var t=document.querySelectorAll('iframe');for(var n in e.data['datawrapper-height'])for(var r=0,i;i=t[r];r++)if(i.contentWindow===e.source){var a=e.data['datawrapper-height'][n]+'px';i.style.height=a}}})}e()})();What moved Indian IT stocks?The US on Thursday suspended IT firms Cognizant, Infosys, Tata, Wipro, HCL, Capgemini, Microsoft and Adobe from the Permanent Labour Certification Programme. While the immediate impact was seen through higher hiring and compliance costs for the affected IT companies, data shows that Indian IT companies have significantly reduced their H-1 B visa hiring amid higher costs.
"Visa hiring has already tightened significantly. This development is unlikely to create any substantial additional pressure on the sector. It is more a formalisation of an existing trend than a fresh negative impact," said G Chokkalingam, founder, Equinomics Research.
According to services industry body NASSCOM, the number of H-1B employees from Indian companies have come down substantially over the last decade. The FY27 numbers are at least a seven-year low, with the peak being in 2024 with 758,994 registrations, according to the agency’s website. Meanwhile, the number of properly submitted, or eligible registrations, tanked 38.5 per cent to 211,600 for FY27, from 343,981 a year earlier, the US Citizens and Immigration Services (USCIS) said in May.
READ MORE TCS, earlier today, said that PERM applications were in single digits over the last two years, and that it does not expect the suspension to impact its workforce strategy or customer engagements. Analysts said the positive sentiment in IT stocks was also visible on the back of a robust show by TCS in Q2, raising hopes that other companies could replicate the same. The Tata group's technology firm reported a net profit of ₹13,884 crore for Q2FY27, up 14.9 per cent year-on-year (Y-o-Y) from ₹12,075 crore in Q2FY26.
Revenue for the company grew 11.2 per cent in reported terms at ₹73,188 crore for Q2FY27 amid global uncertainty and artificial intelligence (AI)-led disruptions. READ MORE Chokkaligam said that the domestic currency's depreciation seems to have helped improve profitability in rupee terms, providing some comfort to the beaten-down IT sector. Most brokerages retained their bullish views on TCS stock following the Q2 earnings performance, eyeing up to 26 per cent returns from last close. READ MORE
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