'Narayana Murthy preached R&D to govt, but didn't invest himself': Fund managers after Anthropic shock hits IT stocks

The recent downturn in Indian IT stocks has reignited discussions about the commitment of major technology firms to research and development. Vikas Khemani, founder of Carnelian Asset Management & Advisors, expressed his discontent, particularly targeting influential figures like Narayana Murthy for advocating government investment in R&D while neglecting to allocate their own resources for innovation. Khemani remarked, "Individuals such as Mr. Narayana Murthy have long encouraged the government to boost R&D funding, yet they have not taken similar initiatives themselves, despite their significant financial resources." He suggested that even a modest investment, such as dedicating 2% of annual profits to venture funds, could stimulate innovation without compromising profitability. He further questioned, "Why haven’t these industry leaders made such commitments? It’s never too late to change course. It’s time to awaken to this need for investment." This sentiment was echoed by Samir Arora, founder of Helios Capital, who noted that many Indian IT firms are excessively focused on short-term profits and quarterly forecasts. Arora stated, "Our companies seem unable to see beyond immediate orders and guidance, leading to overly cautious strategies." He highlighted a stark contrast between Indian companies and their global counterparts, referencing Google's announcement to potentially double its capital expenditures to $175 billion. Arora criticized the focus on buybacks within the Indian IT sector, suggesting that this reflects misaligned priorities in the face of significant global investment trends. The stock market response to these critiques has been palpable. Following the unveiling of a new automation productivity tool by the AI startup Anthropic, IT stocks experienced notable selling pressure. Ponmudi R, CEO of Enrich Money, explained that this downturn was influenced by broader weaknesses in global tech shares, and the introduction of innovative AI solutions has sparked fears of disruption in traditional software business models. Nirmal Bang Institutional Equities characterized the decline in shares of major firms like Infosys and Tata Consultancy Services as a "DeepSeek 2.0 moment." While they labeled the selloff an overreaction, they cautioned that it highlights the ongoing risks posed by global market fluctuations rather than issues specific to the Indian market.