Tata Consultancy Services (TCS), India’s largest IT services firm, will be the first among peers to report Q2 results next Thursday, against the backdrop of rising H-1B visa costs, slowing overseas demand, and AI-driven layoffs.
Revenue Growth Faces Pressure
Analysts expect TCS to report muted revenue growth on a constant currency basis, as global clients continue to cut back on technology budgets and discretionary spending. According to Bloomberg, the company is also in the midst of laying off nearly 2% of its global workforce, offering severance packages to those unable to adapt to the firm’s AI transition.
H-1B Visa Fee Shock
The recent decision by US President Donald Trump to raise the H-1B visa fee to $100,000 has rattled Indian IT services firms. TCS, the second-largest user of H-1B visas, will face scrutiny from investors on how it plans to manage localisation levels, staffing, and profitability in the US market.
While TCS and other players have been gradually reducing reliance on the visa route, analysts caution that the sudden hike could erode profits.
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Jefferies estimates that visa costs could shave off 4%–13% of sector earnings, as the new fee wipes out operating profits per H-1B employee.
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Crisil Intelligence expects companies to pass part of the cost onto clients, limiting the margin impact to 10–20 basis points.
Sector-Wide Impact
The uncertainty has already dragged the NSE Nifty IT index down 7.3% since Trump’s September 19 announcement. The industry was already reeling under tighter client budgets, slower discretionary spending, and rising competition from global capability centres (GCCs).
What Investors Will Watch
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AI workforce transition: Progress on reskilling employees amid layoffs.
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Localisation strategy: Shifts in US hiring to reduce visa dependency.
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Profitability outlook: Ability to absorb or pass on new visa costs.
With TCS being the first IT giant to declare earnings this quarter, its performance and commentary will likely set the tone for peers like Infosys, Wipro, and HCLTech.
