Daily Voice: IT sector could be a good accumulation opportunity for patient investors, but with a pinch of salt, says Green Portfolio founder

Absolutely, yes. The timing and targeting are too precise to be coincidental. This is classic negotiating pressure—hit where it hurts most, then offer to discuss it once you get what you want at the trade table. Former US Ambassador Tim Roemer basically confirmed this playbook just recently.

The timing tells the story. First, Trump hit Indian goods with 50% tariffs in August. Then trade talks got postponed. And now—bam—H-1B fees jump multiple times to $100,000. That’s not policy, that’s a pressure tactic.

Tim Roemer basically said it– the H-1B move “causes a hiccup” but can be revisited after trade talks. Anyone can translate it? It’s a bargaining chip. And it’s targeted—70% of H-1Bs go to Indians, so it hits India’s tech sector and thousands of families hard.

However, it started biting them back and a partial rollback has already taken place over the weekend. From ‘100k dollar per year’ to ‘100k one time’. That too on the new application only.

Is it a good time to accumulate IT stocks after the significant correction following the H-1B issue? Also, is the H-1B visa issue truly a major concern for the Indian IT sector?

The H-1B shock is real but temporary. IT stocks have corrected sharply—down 20-30% from peaks. But the long-term damage is limited since only 3-5% of the IT workforce is on H-1B visas, and companies have been reducing dependency for years. This could be a good accumulation opportunity for patient investors, but with a pinch of salt. This action of the US has negated all the theories that IT, being intangible, is immune from US actions.

But the reality is far less dramatic. Only 3–5% of Indian IT employees are on H-1Bs, and companies like TCS, Infosys, and Wipro have already cut applications by 45% since 2022. They’ve been preparing—hiring locally, moving work offshore, and using other visa categories. Worst-case, margins might dip 100–200 bps and earnings 4–13% for heavy H-1B users. Smart firms will adapt—hire Americans, green card holders, and leverage India-based delivery.

Are you cautiously optimistic about a demand revival in the consumer space following the multiple policy measures implemented by the government to boost consumption?

Cautiously optimistic would be a defensive word here. The right word is optimistic. The measures are meaningful and well-timed, but the revival looks gradual, not dramatic. Early signals are encouraging. GST cuts should give a superb boost through the festive season.

India’s consumption cycle is finally showing signs of revival, and policy support is playing a big role. The government has given income tax relief up to Rs 12 lakh on income, GST 2.0 has just started with most essentials becoming cheaper, the repo rate has been cut from 6.5% to 5.5%, and inflation is running at a multi-year low of 2.1%. Together, these measures are expected to put more than Rs 2.5 lakh crore back into consumers’ hands.

Are banking valuations attractive despite the lag in credit growth?

Yes, it is attractive—especially PSU banks. Credit growth has slowed to around 10% from 15% last year, but banks are trading at compelling valuations with strong balance sheets and improving asset quality. The market is pricing in too much pessimism when the underlying fundamentals remain solid.

PSU banks like Bank of Baroda trade at just 6.4x P/E and 0.88x price-to-book, yet ROE is 15.7%, showing real operational efficiency. Even private banks like ICICI Bank look reasonable at 19x P/E.

Personal loans are still growing faster than overall credit and now make up 32% of advances, with housing loans leading. Banks expect 11–12% credit growth in H2FY26, supported by festive demand and falling EMIs. NPAs are low, capital adequacy is strong, and provisions are sufficient—balance sheets have never been healthier.

Do you see the potential for a structural rally in the copper market?

Yes, we're already seeing the early stages of a structural rally—copper hit $5.87/lb in July 2025, just shy of all-time highs. This isn't a cyclical bounce; it's driven by fundamental supply-demand imbalances that will persist for years. The green transition, AI boom, and infrastructure buildout are creating demand that supply simply cannot match.

The numbers are striking: global copper demand is set to jump from 25 million tonnes today to 36.6 million by 2031, but supply will reach only 30.1 million—a 6.5 million tonne structural deficit – as per some estimates.

Are you confident about a strong earnings growth revival starting from Q3FY26 onward?

Cautiously optimistic, not fully confident yet. The setup is getting better—policy support is strong, base effects turn favourable, and early Q1 signs weren't terrible. But "strong" revival may be too ambitious; I'd call it a "gradual improvement" starting Q3, with momentum building into Q4 and FY27.

Let’s be realistic: most brokerages have already cut FY26 earnings growth to 9–10% from 12–14%. Q1FY26 wasn’t spectacular but not a disaster—11% profit growth versus 9% estimates. Companies are navigating headwinds well.

Looking ahead, three policy tailwinds are kicking in: repo cuts, GST 2.0 making essentials cheaper, and Rs 1 trillion in tax relief boosting household spending. Normal monsoons and festive demand help too. Sectors like banking, industrials, and healthcare are stabilizing, with Bernstein expecting 15% growth for top 100 NSE stocks.

What I’m watching for is the festive season consumption, H2 government capex, and credit growth revival. Risks remain—US tariffs and slow credit growth. Q3 won't be a dramatic turnaround, but it should mark the start of a steady climb, with real momentum building only by Q4FY26.

Events like FTA withthe  EU or BTA with the US can change everything dramatically in favour of our economy.

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