H-1B visa approvals for India's top IT firms have slumped nearly 40%, per a report published by Mint. The U.S. has tightened visa rules, squeezing a pipeline that Indian IT services companies have relied on for decades to staff client-facing projects in America.

For retail investors, the headline is alarming: if your IT company can't send workers to the U.S., won't revenue and margins collapse?

But a careful read of company filings tells a different story. India's largest IT firms have spent years quietly restructuring their delivery models to reduce visa dependency — and the companies furthest along in that transition may actually benefit from the disruption.

Tech Mahindra: The Visa-Independent IT Giant

Tech Mahindra offers perhaps the clearest picture of how far the industry has moved. Per their Q2 FY26 earnings call, CEO Mohit Joshi disclosed that "under 1% of our global workforce is on H-1Bs" and that the company's "visa dependence in the US is under 30%." The company is executing a multi-pronged localization strategy as it works toward its 15% operating margin target.

Notably, management highlighted that replacing subcontractors with full-time employees saves approximately 25% on costs — a lever that becomes more valuable as visa restrictions force the industry toward local hiring. A 4% reduction in subcon expense translates to roughly 1% margin improvement at the company level.

Infosys: Years Ahead on Localization

Infosys, with over 300,000 employees and FY26 net profit of .3 billion (+4.9% YoY), has been investing in localization for years. CEO Salil Parekh stated in the Q2 FY26 earnings call that "the majority of our U.S. workforce does not require Infosys sponsorship for immigration."

The company has built technology hubs and nearshore centers in Canada, Mexico, and other locations. As Parekh explained, the long-term model involves "more work in our technology hubs and centers with local employees, more nearshore work, more offshore work." With FY26 operating margins around 21% and guidance of 20%–22%, Infosys is signaling confidence that this delivery model shift is margin-neutral at worst.

TCS: Scale as Insulation

Tata Consultancy Services, India's largest IT company with FY26 revenue of Rs 2,67,021 crore (up 4.6% from FY25), derives over half its revenue from the Americas — Rs 1,34,998 crore, per their FY26 annual report. U.S.-specific revenue was Rs 1,16,393 crore, making it by far the most exposed to visa policy shifts.

TCS has a uniquely diverse workforce spanning 152 nationalities. However, in an earlier earnings call, then-CEO K. Krithivasan acknowledged that "our reliance on contingent labor has significantly increased, mainly because of the various travel restrictions and supply side challenges in the local market." With PAT of Rs 52,820 crore (up 8.8% YoY), TCS has the financial muscle to absorb higher onshore costs — but investors should watch contingent labor expenses closely in upcoming results.

Wipro: Quietly Shifting the Mix

Wipro has been actively managing its onsite-offshore ratio. Per management commentary in recent quarters, the company has operated at 88%–89% utilization with a higher offshore mix, and is replacing subcontractors with full-time employees — a shift that can reduce delivery costs by around 25%. This strategy effectively turns the H-1B restriction from a headwind into a margin optimization opportunity.

The Small-Cap Angle: Offshore-First Models Win

For smaller IT companies, the H-1B squeeze cuts differently. Xtglobal Infotech, a small-cap IT services firm, actually sees the visa crackdown as an opportunity. Per their Q1 FY26 investor presentation, management noted: "Our company is not dependent on H-1B... because of immigration issues, we see a lot more coming to offshore services model. A lot of clients are looking for that."

This is the second-order effect retail investors should pay attention to: as onsite delivery becomes harder and more expensive, companies with pure-play offshore models could win share from firms that remain visa-dependent.

What Retail Investors Should Do

The 40% H-1B slump is real, but it is not the existential threat it appears. India's top IT companies have been de-risking for years through local hiring, nearshoring, and offshore-first delivery. The key metrics to watch in upcoming quarterly results are:

The biggest risk is not for the large-caps that have spent years building alternative delivery infrastructure. It is for mid-tier firms that still depend heavily on visa-sponsored workers and haven't invested in nearshore or offshore hubs.

Data sourced from company filings on NSE via Xaro.