Indian Stocks Complete Weekly Retreat on Wipro, Gail Earnings

Updated on

Indian equities fell for a fourth day this week, with the benchmark gauge capping a weekly loss, as Wipro Ltd. and Gail India Ltd. declined after their earnings reports.

Wipro, the third-biggest software maker, tumbled the most in three months. Gail, a natural-gas supplier, dropped the most in two weeks. Reliance Industries Ltd., owner of the world’s largest refining complex, fell 1.9 percent before its results. TVS Motor Co. slumped the most in seven weeks and Crompton Greaves Ltd. tumbled 5 percent after the companies posted results that trailed analysts’ forecasts.

The S&P BSE Sensex lost 0.9 percent to 28,112.31 at the close Friday. The measure dropped 1.4 percent from a three-month high on Wednesday as results from some of India’s biggest companies disappointed investors and protests by opposition parties threatened the passage of key economic bills in parliament.

“Investors are taking some money off the table as growth in company earnings has not been as per expectations,” Aneesh Srivastava, who manages $720 million as chief investment officer at IDBI Federal Life Insurance Co., said by phone. “The logjam in parliament is threatening the government’s reforms agenda.”

Seven of the 10 Sensex companies that have posted earnings for the June quarter have matched or beaten estimates. Forty percent of them beat or matched forecasts in the March quarter, versus 47 percent in the December quarter and 67 percent in the July to September period, data compiled by Bloomberg show.

Wipro Earnings

Parliament was adjourned for a fourth day on Friday as the opposition demanded resignations from members of the ruling Bharatiya Janata Party on graft allegations. The disruption comes as Prime Minister Narendra Modi seeks to pass bills needed to implement by April a national goods-and-services tax, one of India’s biggest reform proposals in decades.

Wipro tumbled 3.8 percent, ending a four-day advance. The company posted net income of 21.9 billion rupees ($342 million), matching the 22 billion rupees estimated by analysts. Tata Consultancy Services Ltd. and Infosys Ltd., Wipro’s larger peers, previously had reported earnings that beat forecasts.

The stock was cut to hold from accumulate at IDBI Capital Market Services Ltd. “We believe that it would be challenging for Wipro to get back to industry growth rate,” analyst Urmil Shah wrote in a report.

Gail decreased 2.5 percent to a two-week low. The company said after market hours Thursday its first-quarter profit fell 32 percent to 4.24 billion rupees, missing the 6.6 billion rupees estimate by analysts.

Jaiprakash Tumbles

Reliance reported after market hours record profit of 63.2 billion rupees, exceeding the 62.5 billion rupees estimated by analysts. Sales of 658.2 billion rupees rupees, however, lagged behind the estimated 679.4 billion rupees.

Axis Bank Ltd. said first-quarter profit rose 18 percent to 19.8 billion rupees, matching estimates. The provisions for bad loans surged to 11.2 billion rupees from 3.87 billion rupees. The shares slid 0.6 percent.

Jaiprakash Associates Ltd., a builder of dams and roads, plunged 9.5 percent to its lowest level since June 2004. The company’s debt rating was cut to default by Credit Analysis & Research Ltd. repayment delay concerns. Jaiprakash Associates had net debt of about 592 billion rupees as on March 31, 2015, data compiled by Bloomberg show. Jaypee Infratech Ltd. sank 4.6 percent, while Jaiprakash Power Ventures Ltd. lost 3.7 percent.

ICICI Bank Ltd., India’s biggest private lender, tumbled 3.9 percent, the worst performer on the Sensex. State Bank of India decreased 2.5 percent. IDBI Bank Ltd. fell 2.3 percent.

The Sensex is valued at 15.7 times its projected 12-month profits, compared with a multiple of 11.3 for the MSCI Emerging Markets Index. Global funds bought a net $48 million of local shares on Thursday, July 23, taking the year’s inflows to $7.5 billion.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE