H1-B visa issue makes IT stocks attractive; analysts prefer to wait & watch

Since January 31, the BSE IT Index has lost 2% till Monday's closing as against 5% up move in Sensex

Information technology (IT) stocks have taken a beating since January 31, 2017 when Donald Trump administration introduced a bill in the US House of Representatives requiring companies to double H1B visa holders’ minimum pay to $130,000 a year.

The bill, if implemented, will significantly hit Indian IT companies’ net profits, which reportedly hold 85% of the overall H-1B visas issued, analysts say. However, if experts are to be believed, IT companies may manage to protect their margins by going more into digitisation, local recruitment and less dependence on on-site services.

Since January 31, the BSE IT Index has lost 2% to 9,702