Indian Stocks Rise for Fourth Day as Infosys Rallies on Outlook

  • Infosys jumps after quarterly profit beats estimates
  • Oil & Natural Gas, Gail India drop as crude oil declines

Indian stocks advanced for a fourth day, led by technology companies, after the nation’s second-largest software exporter predicted better-than-expected sales growth. Energy companies declined with oil.

Infosys Ltd. surged to the biggest gain on the S&P BSE Sensex index. ITC Ltd. rose for a second day after saying it will resume cigarette production "soon." Bharti Airtel Ltd., India’s largest mobile-phone operator, climbed the most in a week and Cipla Ltd. rose to a three-week high. Oil & Natural Gas Corp. and Gail India Ltd. paced losses for energy companies after crude oil tumbled.

The S&P BSE Sensex added 0.7 percent at close in Mumbai. The gauge rallied 3.9 percent last week as retail inflation eased more than estimated and the weather office predicted above-normal showers. India’s March-quarter earnings season started on Friday with Infosys, seen as a bellwether for the industry, the first of India’s IT giants to report. Indian markets were closed Thursday and Friday for public holidays.

“We are at a juncture where liquidity and the ongoing results season will determine the strength," of the rally, Vikas Khemani, chief executive officer of wholesale capital markets at Edelweiss Financial Services Ltd., told Bloomberg TV India. “We are seeing green shoots as far as corporate earnings are concerned."

Earnings Season

Investors are focusing on the latest earnings data to see if economic expansion filters through to companies. Profits have fallen in four of the past five quarters in the worst run since the global financial crisis. That’s despite the government forecasting the country to expand faster than any other major economy in the year ended March.

Infosys surged 5.6 percent, the most since July 21. Sales will rise between 11.8 percent and 13.8 percent in U.S. dollar terms for the 12 months ending March, Bengaluru-based Infosys said. That compares with the 10.5 percent to 12.5 percent median growth estimate of four analysts surveyed by Bloomberg News. 

The company also reported fourth-quarter earnings, with net income rising 16 percent to 36 billion rupees ($541 million) in the three months ended March, the company said. That compares with the 35.2 billion-rupee average of estimates compiled by Bloomberg.

Infringement Case

Tata Consultancy Services Ltd., the largest software services exporter which will announce earnings Monday, fell 0.3 percent after saying it will appeal an almost $1 billion verdict against the Indian company in a U.S. intellectual-property infringement case.

A federal jury in Madison, Wisconsin, found that Tata Consultancy and Tata America International Corp. should pay $940 million for using data from Epic Systems without permission, according to a verdict handed down on April 15. The company can file an appeal within 30 days of the trial judgment, which is expected in the next six to eight weeks, Tata Consultancy said in an e-mailed statement.

The company will announce its earnings after market hours on Monday. Its profit rose 63 percent to 62.9 billion rupees, according to the median estimate of 32 analysts in a Bloomberg survey.

Bharti gained 2.3 percent, while Cipla jumped 2.4 percent. Oil & Natural Gas, India’s largest state-owned oil and gas explorer, and Gail India retreated 2.7 percent each. Crude tumbled by the most in two months after output talks Sunday between the world’s biggest producers ended without any agreement on limiting supplies.

Overseas investors bought $64.4 million of local stocks on April 12, taking this year’s inflows to $1.1 billion. The Sensex has retreated 1.2 percent this year and trades at 15.9 times 12-month projected earnings versus 11.9 for the MSCI Emerging Markets Index.

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