Indian Stocks Gain for 5th Day as Reliance, HDFC Climb on Profit

Indian stocks gained for a fifth day as Reliance (RIL) Industries Ltd.’s earnings exceeded estimates and monsoon rainfall picked up.

Reliance, owner of the world’s largest refining complex, climbed the most in two weeks. Financial Technologies (India) Ltd. (FTECH) extended last week’s 17 percent gain after selling a 15 percent stake in the Multi Commodity Exchange of India Ltd. to Kotak Mahindra Bank. Housing Development Finance Corp. (HDFC) was the top performer on the S&P BSE Sensex (SENSEX) after the mortgage lender’s first-quarter net income matched analyst estimates.

The Sensex added 0.3 percent to 25,715.17, completing its longest run of gains in almost four months. The gauge has risen 21 percent this year, the best performer among the world’s 10 biggest markets, as foreigners have bought more Indian shares than those of any other Asian nation. Reliance joined Infosys Ltd. and Tata Consultancy Services Ltd. (TCS), the country’s top software makers, in posting better-than-expected earnings for the quarter ended June 30.

“The bad times for company earnings are bottoming out,” Gaurang Shah, vice president at Geojit BNP Paribas Financial Services Ltd., said in an interview to Bloomberg TV India today. “Reliance results have been a pleasant surprise.”

Reliance, which has the second-highest weighting in the Sensex, gained 2.1 percent to 997.65 rupees, the most since July 4. Net income rose to 56.5 billion rupees ($938 million), the company said July 19. That exceeded the 53.7 billion-rupee median profit estimate of 25 analysts compiled by Bloomberg.

Earnings Scorecard

Housing Development jumped 2.8 percent, the steepest gain since June 6. Profit climbed 15 percent to 13.4 billion rupees, matching the median estimates of 25 analysts in a Bloomberg survey. HDFC Bank Ltd. (HDFCB) dropped 0.6 percent, erasing an intraday advance of as much as 1.7 percent, after the lender’s net income of 22.3 billion rupees trailed the 23.2 billion-rupee estimate of 34 analysts surveyed by Bloomberg.

Four of six Sensex companies that have posted earnings so far have beaten or matched estimates. About 60 percent of the companies announced earnings that exceeded or matched estimates in the March quarter. Around 73 percent of results beat forecasts in the preceding three months.

Stocks also climbed today as a pickup in monsoon rainfall eased concern inflation will accelerate. The shortfall in the June-September monsoon was 34 percent of the 50-year mean, the weather office said. That compares with 43 percent on July 11.

“Oil is subdued and the monsoon has caught up, making it favorable for investors,” Raamdeo Agrawal, joint managing director at Motilal Oswal Financial Services, said by phone.

Financial Technologies

Financial Technologies increased 2.9 percent, taking this year’s gain to 49 percent. The stock plunged 84 percent in 2013 amid a probe into the biggest payment default in the nation’s commodity market. The Multi Commodity Exchange surged to a one-year high. Kotak Mahindra Bank added 0.6 percent.

Foreigners have bought $11.7 billion of local shares this year amid expectations Prime Minister Narendra Modi will help boost an economy growing at near the slowest pace in a decade. The Sensex is valued at 15.7 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s multiple of 11.1, data compiled by Bloomberg show.

The CNX Nifty Index (NIFTY) on the National Stock Exchange of India Ltd. advanced 0.3 percent to 7,684.20.

To contact the reporters on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net; Soumya Gupta in Mumbai at sgupta329@bloomberg.net

To contact the editors responsible for this story: Michael Patterson at mpatterson10@bloomberg.net Ravil Shirodkar, Dick Schumacher

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