17 WWW.ECONOMICTIMES.COM Companies: Pursuit of Profit Our Bureau New Delhi | Bengaluru: The US President Donald Trump is all set to deliver a body blow to the Indian information technology (IT) servi- ces industry as his administration has drafted an executive order that will overhaul the work visa pro- grammes. Bloomberg reported on Monday, following similar reports last week, that the executive orders could seek to curb the long term H-1B visas, and the short term L-1, E-2 and B1visas. Indian IT companies have long be- en a beneficiary of the H-1B work vi- sas for transfer of skilled workers. About 300,000 to 350,000 Indian engi- neers are on H-1B visas in the US, according to industry estimates. “Our country’s immigration poli- cies should be designed and imple- mented to serve, first and fore- most, the US national interest,” the draft proposal reads, according to Bloomberg. “Visa programs for fo- reign workers…should be admini- stered in a manner that protects the civil rights of American wor- kers and current lawful residents, and that prioritises the protection of American workers — our forgot- ten working people — and the jobs they hold.” The US is also Indian IT’s largest market, accounting for about 60% of business. “In terms of the H-1B visa, there are limits to what Trump can do. He may be able to change the annual H-1B lottery through executive or- der, and shift to merit or priority-ba- sed system that replaces the ran- dom lottery with a salary-based dis- tribution, for instance,” Patrick Thibodeau, national correspon- dent at Computerworld, told ET. Because broader H-1B reforms re- quire changes in the law and ac- tions by Congress, there would lik- ely be a court challenge testing his authority to make such changes, he added. Analysts say changes to the visa program could shave as much as 300 basis points off the margin at a time when their customers are al- ready clamouring for lower prices and they need to invest in digital of- ferings. “It will be a headwind to the mar- gin. We will have to accept the hig- her costs and seek out the improve- ments and margin levers internal- ly,” Milind Kulkarni, chief financi- al officer at Tech Mahindra, told ET on Monday. The H-1B visa has allowed Indian IT companies to send Indian engi- neers to the US, keeping costs low and giving them a margin advanta- ge over the multi-national players. Industry body Nasscom said it do- es not react to reports of drafts. “Not only is offshoring of IT and BPO slowing because of lessening demand, but increased political pressures and policies being dri- ven by the Trump leadership are completely changing the game. When it comes to IT services and BPO, it’s no longer about “location, location, location”, it’s now all abo- ut “skills, skills, skills”,” said Phil Fersht, CEO at consultancy Horses for Sources in a blog. H-1B Visa Curb may Give Indian IT a Big Blow Trump’s next executive orders could seek to curb the long term H-1B visas on which up to 350,000 Indian engineers depend Press Trust of India New Delhi: Tech Mahindra on Monday posted about 14% jump in consolidated net profit to . `856 crore for the third quarter ended December, 2016-17. It had posted net profit of . `751.3 crore in the Oc- tober- December period of last fi- scal, 2015-16. Its income from operations (net) increased by 12.7% to . `7,558 crore in the reported quarter, from . `6,701 crore in the year-ago pe- riod, according to the company’s BSE filing. “The strong deal wins and business momentum during the quarter reaffirm that we are on the right track to capitalise on the opportunities from the global digital transformation and see measurable benefits from that,” Tech Mahindra vice-chairman Vineet Nayyar said. In dollar terms, Tech Mahind- ra’s net profit was up 11.4% to $126.3 million, while revenue was up 10% to $1,116.1million in the sa- id quarter. In constant currency terms, the revenue growth was at 12% year-on-year and 5.4% sequ- entially. Its IT revenue during the said quarter stood at . `7,031 crore, while that from BPO was at Rs 526.31crore. Americas accounted for 46.7% of its revenues, while Europe and Rest of the World accounted for 29.4% and 23.9%, respectively. TechM Q3 Net up 14% on Strong Deal Wins MARGIN IMPACT Analysts say changes to the visa regime could erode margins of Indian IT firms by up to 300 basis points