Indian Stocks Advance to Pare Weekly Decline as Lupin Surges

  • Lupin earnings beat estimates; stock leads drugmakers higher
  • Sensex retreats 1% this week as foreigners remain net sellers

Indian stocks advanced, paring a weekly decline, as health-care companies and lenders climbed.

Lupin Ltd. surged the most since in six years after the nation’s second-biggest drugmaker by market value reported results that beat estimates. Sun Pharmaceutical Industries Ltd., the largest, and Cipla Ltd. were among the best performers on the S&P BSE Sensex. Axis Bank Ltd.had the steepest gain in two weeks, and State Bank of India halted a five-day, 12 percent retreat.

The S&P BSE Sensex climbed 1.1 percent at the close in a second day of gains. The gauge slid 1 percent this week as concern grew over the global economic outlook amid swings in oil prices and the Reserve Bank of India left interest rates unchanged. Governor Raghuram Rajan said his next move would depend on inflationary trends and the government’s federal budget, due on Feb. 29.

“The government might not provide a short-term boost for the market, but if it can stay on the path of fiscal consolidation and make life easier for businesses then we are on track," Ravi Dharamshi, chief investment officer at Valuequest Investment Advisors Pvt., said in an interview to Bloomberg TV India. “Valuations are reaching a point where they are starting to look attractive." 

The Sensex has declined 5.8 percent this year and trades at 15.1 times its projected 12-month earnings, near the cheapest since September, versus a multiple of 10.9 for the MSCI Emerging Markets Index.

Lupin posted a third-quarter group net income of 5.3 billion rupees, beating the median estimate of 25 analysts in a Bloomberg survey. The stock surged 9.1 percent to 1,802.85 rupees, the most since February 2010.

Cipla headed for its biggest gain since October, while Sun Pharmaceutical added 2.6 percent. Hero MotoCorp Ltd., a motorcycle maker, and Tata Motors Ltd., the owner of Jaguar Land Rover, climbed for a second day.

So far 10 out of 18 Sensex companies have reported earnings for the December quarter that have beaten estimates. Fifty-seven percent of Sensex companies in the September quarter posted earnings that matched or beat estimates, versus 60 percent in June, data compiled by Bloomberg show.

Overseas investors sold a net $26 million of Indian stocks on Feb. 4, taking this year’s outflow to $1.7 billion. They bought $3.3 billion of shares last year, the smallest inflow since 2011, data compiled by Bloomberg show.

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