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Indian IT: Strong week amid H-1B softening & improving sentiment

ICICIdirect Research 14 Nov 2025 DISCLAIMER

Indian IT stocks posted a strong week, supported by easing concerns around the US H-1B policy and improving confidence in the sector’s growth outlook. The H-1B saga saw a clear softening from the initial shock announcement: the $100,000 ” fee (Sept 19) which was swiftly clarified as a one-time levy (Sept 20–21), followed by exemptions for students on F-1 visas and in-country status changes (Oct 20). The U turn continued further with President Trump defending the H-1B programme (Nov 12), calling specialised global talent essential for roles that can’t be filled from unemployment lines and put into factory/ missile jobs. In a nut shell, there has been continued softening of stand from day 1. It will be important to monitor for further relief or broader carve-outs, which could remove a major overhang for the sector.
At a fundamental level, the performance divergence between large and mid/small-cap IT remains intact. Traditional Tier I IT large caps are dragged by ~30-35% exposure to muted BFSI and weak retail &, continue to print low single-digit growth, while select mid/small-caps, with higher exposure to non-banking BFSI, GCC setups, cloud-native and data-centre-driven clients, are clocking high single-digit to double-digit growth. Moreover, with AI hype cooling globally, the excessive pessimism around IT services growth appears to be normalising, helping sentiment recover.
Overall, softer H-1B messaging, stabilising global demand expectations and stronger mid-tier fundamentals combined to make it a positive week for Indian IT stocks.

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