Indian Software Exporters, Drugmakers Gain on Earnings Optimism

Indian software exporters and drugmakers climbed amid speculation their quarterly earnings will beat analyst estimates as a weak currency helps increase the value of their repatriated profits.

Tata Consultancy Services Ltd. rose to a record, pacing gains among other technology companies. Ranbaxy Laboratories Ltd. jumped 6 percent, the best performer today on a gauge of healthcare companies. Tata Steel Ltd. rallied 4.1 percent, sending the S&P BSE India Metals Index to a four-month high. The rupee fell for the first time in four days.

The S&P BSE-100 Index added less than 0.1 percent at the close, erasing an intraday drop of 1.2 percent. The benchmark S&P BSE Sensex lost 0.1 percent to 19,895.10 as the deadlock over the U.S. debt ceiling and government shutdown weighed on sentiment. The rupee has fallen about 15 percent in the past year amid the weakest growth in a decade. Infosys Ltd. is the first Sensex company due to post earnings on Oct. 11.

“Technology stocks and drugmakers rallied on expectation that rupee depreciation will boost their profits,” Gajendra Nagpal, chief executive officer with New Delhi-based Unicon Financial Intermediaries Ltd., said by phone. “The U.S. crisis continues to be an overhang on the broader market.”

Tata Consultancy, the nation’s largest software exporter, jumped 2.8 percent to 2,089.75 rupees, an all-time high. The S&P BSE India Infotech Index closed at its highest level since February 2000.

Ranbaxy, Sun Pharma

Ranbaxy rallied after the Economic Times reported the company is looking to buy a local facility approved by Food and Drug Administration to shift some of its key drug filings. The U.S. authority last month placed import curbs on a third Indian plant owned by the company. Sun Pharmaceutical Industries Ltd., the biggest by market value, rose 0.7 percent to 604.5 rupees, a record.

The Sensex has risen 2.4 percent this year, led by gains of more than 60 percent in Tata Consultancy and Sun, which got 72 percent of its sales overseas in the year ended March.

Profit of dollar-denominated sectors, including software, healthcare and metals, in the CNX Nifty Index likely grew 19 percent in the September quarter from a year earlier, Motilal Oswal Securities Ltd., said in a note dated Oct. 1.

ICICI Bank dropped to 916.2 rupees, the lowest level since Sept. 30. Reliance Industries Ltd. lost 1.2 percent, the most since Sept. 30. Coal India fell for first time in four days.

With the U.S. set to exhaust measures to avoid breaching its debt ceiling on Oct. 17, House of Representatives Speaker John Boehner said lawmakers won’t raise the limit without packaging it with other provisions. President Barack Obama’s administration has said it won’t negotiate with Republicans over funding the government or raising the debt ceiling.

The U.S. accounted for about 13 percent of India’s exports in June.

The Sensex is valued at 13.7 times estimated earnings for the next 12 months, compared with a multiple of 10.5 for the MSCI Emerging Markets Index. Volumes on the Indian gauge were 26 percent below the 30-day average at the close.

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