Tech Mahindra shares hit over one-year low on Q1 warning

REUTERS - Shares of Tech Mahindra Ltd dropped almost 7 percent to a more than one-year low on Monday after the IT firm warned of a weak first quarter, partly due to higher U.S. visa sponsorship costs for its employees.

Local IT services companies send hundreds of workers to the United States to work on client projects, making them among the top applicants for U.S. visa.

Applications for H-1B visas allowing U.S. businesses to hire foreign workers in science, engineering and computer programming have already reached a record 233,000 in the financial year 2016.

Higher costs of H1-B visas will be a drag on first-quarter margins, Tech Mahindra said earlier in the day without elaborating.

 

The company also said its mobility business would be a seasonal drag on results in the first quarter.

"Organisation-wide there is renewed focus on improving operational levers and cost-control parameters, however the impact is expected to be visible only from Q3 FY16," the company said in a filing to the exchange.

Tech Mahindra shares were down 7.6 percent at 482 rupees on the NSE as of 1:23 p.m.

($1 = 63.8500 rupees)

(Reporting by Nivedita Bhattacharjee in Mumbai; Editing by Subhranshu Sahu)