Why Is Anant Raj Cracking In Trade? DeepSeek Effect May Be At Play

Anant Raj Ltd. has been a darling of the data centre driven stock lovers. However, the stock is trading under pressure over last two sessions. The stock was down almost 20% on Tuesday after falling 18% on Monday.

The company's stock had outperformed peers in FY25, with gains of 188%. The reason why the stock ran up in FY24 was because the street was looking at Anant Raj to have an early mover advantage in emerging data center market.

The fall in Anant Raj's shares comes as Chinese AI developer, DeepSeek, launched its DeepSeek R1 chatbot app last weekend. The app, being touted as the cheapest among capital heavy AI models, topped downloads worldwide.

The launch of DeepSeek's Large Language Model could impact Anant Raj's data centre business. High valuations and negative market sentiment due to impact of DeepSeek on India and data centre companies are weighing the stock. The Deepseek-V3 has emerged as the most affordable LLM and has challenged the idea that AI developement requires heavy capital.

Data centre operations contributed Rs 8 crore to Ebitda of Rs 113 crore in the second quarter of fiscal 2025, accounting for 8% of the operating profit. However, the company has big ambitious plans to scale its data centre business in India. It is looking at data centres as a multi-year mega opportunity and plans to scale up capacity to 307 MW over next four-five years from 6MW in 2024. The company is planning to raise Rs 2,100 crore to achieve 307 MW. In fact, the company has invested Rs 100 crore at Rs 730 per share as of Dec. 16, 2024.

Notably, data centres are not only used for AI. They are critical for a wide range of purposes.