April 29, 2021
With legacy business shrinking
Chandrasekhar, president of Nasscom.."The higher visa fee is one of the
headwinds.TCS, second-largest exporter Infosys and No."But as Indian IT firms
sharpen focus on high-margin digital technology services instead of routine
technology infrastructure maintenance and software application projects, they
would need to send fewer staff to client locations overseas, analysts said.but
they can expect to recoup some of the costs through contract re-negotiations and
the stronger dollar," said Aneesh Srivastava, chief investment officer at IDBI
Federal Life Insurance.India's roughly $150 billion outsourcing sector generates
about three quarters of its revenue from the United States, where outsourcing
companies send thousands of staff every year to work at client locations.
Mumbai: India's export-driven IT outsourcing firms are likely to raise client
fees and process more work from their centres in India to cushion the impact of
an increase in fees for work visas in the United States, their top market,
investors said..
With legacy business shrinking, the larger digital becomes, the
more it can move the needle in terms of top line growth," said Moshe Katri, a
New York-based sector analyst at CRT Stern Agee.. 3 Wipro Ltd have in the past
year increased their focus on high-margin digital and cloud computing services,
as competition and pricing pressure on routine IT services dented growth.S.
"Immigration reform in general in the U.Indian IT industry lobby group, the
National Association of Software and Service Companies (Nasscom), estimates
local IT firms would incur an extra $400 million a year in costs due to the
spike in visa fees.The measure passed last month by the US Congress doubled the flex banner cost
of sponsoring workers under short-term H1B and L1 visas, and spurred concerns of
future curbs on IT work sent overseas by US companies before the US presidential
election."The higher fee is unjustified because it is designed to hurt India
firms disproportionately," said R.The new US measure will shave 50-60 basis
points off the profit margins of information technology firms.TCS, leader of the
Indian IT outsourcing industry, is likely to post a 10 percent increase in its
December quarter net profit on Tuesday, while Infosys is expected to report a 3
percent rise in profit on Thursday, according to Thomson Reuters data."These
companies know that with digital services you can cut down the number of people
that need to work out of client locations and that visa costs do not pose a
long-term threat," said Srivastava, whose funds own Infosys and TCS shares.The
new US measure will shave 50-60 basis points off the profit margins of
information technology firms including Tata Consultancy Services (TCS) and
Infosys from the next fiscal year starting April 1, they said. is something that
has to happen sooner or later
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