The headlines say it all. Oracle rallies as it doubles down on AI, cloud and databases. Infosys, on the other hand, announces a ₹18,000-crore buyback. The contrast could not be starker.
Western tech companies build, innovate, and invest in future-shaping technologies. Indian IT services firms distribute cash and celebrate financial engineering. One is rewarded with a re-rating that drives stock prices to record highs. The other gets a temporary bump while staying trapped in the same old services cycle.
Oracle has been around for decades. It could have easily sat on its cash, leaned on database maintenance fees, and called itself conservative. Instead, it is pouring billions into AI partnerships, cloud infrastructure, and next-generation software layers. Investors see growth, scalability, and intellectual property. That’s why Oracle stock rallies.
Oracle’s stock has almost doubled this year, cementing its place as one of the S&P 500’s top performers. It trades at a 1-year forward P/E of 45, ahead of the 31 times for both Amazon and Microsoft. That valuation premium shows how investors are rewarding its pivot.
Down 18.7 per cent YTD, Infosys, in contrast, has chosen the path of least resistance. Rather than redeploy capital into product bets, AI platforms, or new growth engines, it hands cash back to shareholders. The move is safe, predictable, and typical of an IT services company that remains addicted to linear, headcount-driven revenues.
Buybacks are not inherently bad. They signal confidence, improve return ratios, and create immediate shareholder value. But they also expose something deeper. They show the lack of conviction in building new businesses. When all you can do with excess capital is buy your own stock, you are admitting that you don’t have the vision or risk appetite to create the next big thing.
This is the fundamental problem with Indian IT. For decades, the sector has thrived on outsourcing waves, global cost arbitrage, and efficient delivery models. It generated cash, margins, and predictable growth. But it never made the leap from services to products. No global enterprise software platform. No cutting-edge AI framework. No cloud ecosystem to rival AWS, Azure, or Oracle. Just incremental services layered on top of someone else’s technology.
FILE PHOTO: An employees walks past a signage board in the Infosys campus at the Electronics City IT district in Bengaluru
| Photo Credit: VIVEK PRAKASH
Cash returned vs capital deployed
Now, when AI is rewriting the rules of global tech, Indian IT is still stuck chasing low-hanging fruits: optimising contracts, managing costs, and repurchasing shares. It is a model built for predictability, not disruption. And predictability is precisely what global investors are beginning to discount.
Look at the market reaction: Oracle and other Western peers surge because their bets open new frontiers. Infosys’s buyback barely moves the needle on long-term valuations. The cash will disappear, but the structural weakness — dependence on low-margin services — remains.
The uncomfortable truth is this: Indian IT has no equivalent of Oracle’s cloud pivot, Microsoft’s AI partnership with OpenAI, or Nvidia’s chip dominance. It has the money, but not the mindset. It has the talent, but not the ambition.
So yes, Infosys can celebrate its ₹18,000-crore buyback. Shareholders will pocket short-term gains. But the deeper question remains unanswered: when will Indian IT stop being the world’s back-office and start being the world’s product creator?
Until then, the story will repeat. Western tech invests and reaps massive rewards. Indian IT clings to services, hoards cash, and throws it back to shareholders.
That said, valuations tell their own story. Oracle now trades at a premium multiple and expectations are sky-high, which leaves little room for disappointment if AI bets stumble. Infosys, bruised in stock performance this year, still offers cash comfort, but lacks growth narrative.
In the end, it remains to be seen whether Oracle’s bold investments sustain their momentum, or whether Infosys’s conservatism proves less costly in the long run.
Published on September 12, 2025
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