Oct. 30 (Bloomberg) -- India’s benchmark stock index fell for a fifth day, the longest losing streak in 11 months, after Reliance Industries Ltd. and Bharti Airtel Ltd. posted profits that fell short of analysts’ forecasts.

Reliance Industries, India’s most valuable company, dropped 3.4 percent after it reported lower profit for the fourth- straight quarter. Bharti Airtel, the largest mobile-phone company, sank 6.1 percent as it reported that earnings growth slowed for the ninth quarter.

The Bombay Stock Exchange’s Sensitive Index, or Sensex, lost 156.44, or 1 percent, to 15,896.28, extending the month’s decline to 7.2 percent, the lowest monthly drop in a year. The gauge was also the worst performer in Asia this month. Stocks have gained more than 30 percent since mid-May when Prime Minister Manmohan Singh’s ruling coalition was re-elected on the promise of reviving the economy.

“The markets have rallied since May on expectations corporate earnings will be robust,” said Jagannadham Thunuguntla, the head of equities at SMC Capitals Ltd. in New Delhi. “They have been disappointed.”

The S&P CNX Nifty Index on the National Stock Exchange lost 0.8 percent to 4,711.70. The BSE 200 Index slid 0.7 percent to 1,962.88. Markets will be closed for a public holiday on Nov. 2.

Reliance Industries, the energy explorer battling a lawsuit over natural gas sales, fell 3.4 percent to 1,931.15 rupees, its lowest since Sept. 3. The company’s net income in the three months ended Sept. 30 fell 6.6 percent to 38.5 billion rupees ($815 million). The median estimate of 15 analysts in a Bloomberg survey was a profit of 40 billion rupees.

Price War

Bharti Airtel Ltd., the Indian operator that failed to merge with MTN Group Ltd., sank 6.1 percent to 292.85 rupees, its lowest since March 20. Bharti’s net income increased 13 percent to 23.2 billion rupees for the three months ended Sept. 30, from 20.5 billion rupees a year earlier, the New Delhi-based company said today. That compared with the 23.5 billion-rupee median of 31 analyst estimates compiled by Bloomberg.

Bharti and closest rival Reliance Communications Ltd. are the nation’s worst-performing benchmark stocks this year as competitors including Japan’s NTT DoCoMo Inc. sign up more callers. Bharti has lost 18 percent this year and Reliance Communications has retreated 28 percent compared with a 65 percent advance for the Sensex.

Bharti director Rajan Bharti Mittal said yesterday consolidation is inevitable because there are “too many” operators.

Earnings

Tokyo-based NTT DoCoMo, Japan’s largest wireless operator, is luring customers with pay-per-second calls and Reliance is offering plans with call rates as low as 1 U.S. cent a minute.

Reliance Communications plunged 7.3 percent to 175.85 rupees, its lowest since March 31. Idea Cellular Ltd., an Indian wireless carrier partly owned by Malaysia’s Axiata Group Bhd., fell 6.4 percent to 52.05 rupees, its lowest since April 2, while Tata Teleservices Maharashtra Ltd. declined 3.3 percent to 26.45 rupees, a five-month low.

Tata Power Ltd., India’s biggest private electricity generator, plunged 4.6 percent, the most since Aug 7, to 1,338.85 rupees after it reported a 28 percent decline in second-quarter profit as sales fell. Net income dropped to 1.8 billion rupees from 2.5 billion rupees a year earlier, the Mumbai-based utility said in a statement to the Bombay Stock Exchange today. The median estimate of 14 analysts surveyed by Bloomberg was a profit of 2.4 billion rupees.

DLF Ltd., India’s largest developer, retreated 1.4 percent to 370.25 rupees after it reported a fifth consecutive quarter of declining profit as demand for offices and shops lagged behind a revival in home purchases in the world’s second-fastest growing major economy.

Inflation Woes

Bank of India, a state-owned lender, fell 6.7 percent to 333.45 rupees, its lowest in two months. Analysts downgraded the stock’s rating after the company posted a 58 percent drop in earnings.

Bank of India’s stock rating was cut to “underperform” from “outperform” at Macquarie Group Ltd., and to “hold” from “buy” at JM Financial Institutional Securities.

Indian stocks, the worst performers in Asia this month, may be hurt by a six-fold increase in the pace of inflation, BofA Merrill Lynch Global Research said.

Inflation may accelerate to 8.7 percent by March from 1.5 percent currently, BofA Merrill Lynch analyst Jyotivardhan Jaipuria wrote in a report yesterday. Stock markets have posted negative returns in five of the seven times since 1990 when inflation quickened, he added.

The Sensex has fallen 5 percent since Reserve Bank of India Governor Duvvuri Subbarao increased the statutory liquidity ratio and raised the inflation forecast on Oct. 27.

Gains in Indian stocks are likely to slow following their “stellar” gains over the past six months, Morgan Stanley strategists Ridham Desai and Sheela Rathi said in a report on Oct. 28. The Sensex has soared 76 percent in the past six months.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net

Last Updated: October 30, 2009 08:10 EDT