The Indian IT sector is facing significant headwinds as stocks tumble amid concerns over new H-1B visa rules and mixed signals from global peers. The sector's performance has been further complicated by recent announcements from industry leaders.

Market Reaction to Accenture's Results

Accenture's latest quarterly results have become a focal point for the Indian IT sector. The global consulting giant reported a 1.5% revenue growth, surpassing consensus estimates. Additionally, Accenture provided guidance for organic growth between 0.5% to 3.5% for fiscal 2026, slightly higher than the previous year's outlook. This performance is expected to influence investor sentiment towards Indian IT companies, including TCS, Infosys, and HCLTech.

H-1B Visa Concerns Weigh on Stocks

Indian IT stocks have been on a downward trajectory, marking a five-day losing streak. The decline is largely attributed to new H-1B visa rules, which have raised concerns about the sector's ability to deploy talent in key markets.

Nifty IT Index Takes a Hit

The impact of these concerns is evident in the performance of the Nifty IT index:

The sell-off has been particularly severe for TCS, which hit a 52-week low and emerged as the worst performer on the Nifty IT index.

Market Capitalization Erosion

The collective impact of this downturn is substantial, with the 10 Nifty IT components witnessing a staggering ₹1.8 lakh crore erosion in market capitalization.

TCS Announces Dividend Record Date

Amidst market turbulence, Tata Consultancy Services (TCS) has announced its record date for the second interim dividend. As per a recent disclosure, the TCS Board of Directors will meet on Thursday, October 9, to consider the declaration of a second interim dividend for the fiscal year. Shareholders are advised to submit the required documents by the specified date to avail of any applicable income tax exemptions.

Outlook

Despite the current challenges, some analysts remain cautiously optimistic. Motilal Oswal expects Indian IT services revenue and commentary to align with Accenture's results, though they anticipate the upcoming quarter to be muted.

As the sector navigates through these challenges, investors and industry watchers will be closely monitoring how Indian IT majors respond to the changing global landscape and regulatory environment. The upcoming quarterly results and management commentaries will be crucial in shaping the sector's near-term outlook.

Former U.S. President Donald Trump's proposed $100,000 fee on H-1B visas is causing a significant shift in investor sentiment towards Indian stocks, favoring domestically exposed companies over export-oriented firms. This development is particularly impacting India's IT giants, which heavily rely on the H-1B program for their global operations.

Impact on Indian IT Sector

The proposed fee hike is expected to have a substantial effect on major Indian IT companies such as Tata Consultancy Services (TCS) and Infosys. These firms, which are among the largest users of the H-1B visa program, are already grappling with margin pressures due to tight client budgets, disruptions from artificial intelligence, and uncertainties in trade policies.

The market's reaction to these developments is evident in the performance of relevant indices. The Nifty IT index has seen a decline of 19.00% year-to-date, reflecting investor concerns about the sector's near-term prospects.

Shift to Domestic Sectors

In response to these challenges, investors are pivoting towards Indian stocks with stronger domestic exposure. Allspring Global Investments, for instance, is reducing its underweight position on Indian equities by increasing exposure to domestic sectors such as consumer goods and financials.

This shift is supported by favorable macroeconomic data and policy tailwinds. The Indian government's decision to cut goods and services taxes to boost consumption is expected to benefit companies focused on the domestic market.

The market performance reflects this changing landscape:

Valuation Considerations

Despite the recent shifts, Indian equities remain Asia's most expensive major stock market. However, the underperformance of Indian stocks compared to emerging-market peers has created more attractive valuations, potentially opening up new opportunities for investors.

TCS Financial Results Announcement

In related news, Tata Consultancy Services, one of the companies at the center of this shift, has announced its schedule for the second quarter results. According to the company's latest disclosure:

• TCS will announce its Q2 results on October 9, after market hours.
• A press conference is scheduled for 17:30 hrs IST on the same day.
• An earnings conference call will follow at 19:00 hrs IST.

This upcoming financial report may provide further insights into how the proposed H-1B visa fee changes and other market factors are affecting one of India's leading IT services companies.

As the situation continues to evolve, investors and industry observers will be closely watching how Indian IT companies adapt to these challenges and how the broader market rebalancing plays out in the coming months.