Bloomberg/Mumbai


Indian stocks rose for a second day, paring a weekly loss, as the nation’s second-largest

software exporter reported profit that beat estimates and global stocks rallied.
Infosys rallied the most in three months after the company maintained its annual sales

forecast.
The stock now has the highest weighting on the S&P BSE Sensex, up from a third place

yesterday. Hindustan Unilever climbed to a record, while drugmakers Dr Reddy’s

Laboratories and Cipla were among the best performers on the benchmark index.
The Sensex gained 0.7% to 27,458.38 at the close, paring the weekly loss to 1.5%. Net

income at Infosys rose 13% to Rs32.5bn ($521mn) in the December quarter, exceeding the

Rs31.6bn median of 29 analysts’ estimates in a Bloomberg survey. The Bengaluru-based

company kept its forecast for full-year sales to rise 7% to 9% in US dollar terms.
“Spending on technology has improved dramatically, and the guidance given by Infosys is

conservative,” Trip Chowdhry, a US-based analyst at Global Equities Research, said in an

interview to Bloomberg TV India yesterday. “Infosys can easily meet or beat the top-end of

its guidance.”
Profits at 67% of the 30 Sensex companies beat or matched analyst estimates in the

September quarter, versus 46% in the three months ended June and 60% in March, data

compiled by Bloomberg show. Earnings are likely to rise 27% over the next year, versus 11%

for companies on the MSCI Emerging Markets Index, the data show.
Infosys jumped 5.1%, the steepest climb since October 10. The stock had lost as much as

3.1% today before the results. Tata Consultancy Services increased 2.8%, the most since

December 16. The companies were among the best performers on the Sensex yesterday.
Hindustan Unilever soared 5.8%, taking this week’s rally to 14%, the most since the week

ending May 5, 2013.
Brokerages including JPMorgan Chase & Co, Credit Suisse Group, Kotak Securities and IIFL

Holdings have raised their ratings on the stock this week.
“The fast-moving consumer goods pack is being rerated and Hindustan Unilever is the

benchmark of the sector,” said Harsh Mehta, an analyst at brokerage HDFC Securities.

“There may also be some flight to safety that’s benefiting the stock.”
Dr Reddy’s jumped 3.2%, the most since November 7, and Cipla gained 2.3%, the steepest

advance since December 18.
The Sensex rallied 30% in 2014, the most among the world’s 20 biggest markets after China.
Foreigners bought $16bn of stocks on expectations economic growth will rebound after Prime

Minister Narendra Modi won the biggest electoral mandate in three decades in May.
Global investors sold a net $62mn of local shares on January 8. The Sensex is valued at

15.2 times projected 12-month profits, compared with the MSCI Emerging Markets Index’s

multiple of 11.2, data compiled by Bloomberg show.
Meanwhile the rupee completed its biggest weekly gain since May on optimism demand for

emerging-market assets will be sustained amid the prospect of further euro-area stimulus.
European Central Bank President Mario Draghi said this week that policy makers may

undertake measures including buying sovereign bonds to spur growth. Minutes of the Federal

Reserve’s December meeting released January 8 showed the US is unlikely to raise interest

rates before late April. Global funds bought a record $26.4bn of Indian debt in 2014,

while pouring about $16bn into the nation’s stocks, exchange data show.
The rupee climbed 1.6% from January 2 to close at 62.3250 a dollar in Mumbai, the biggest

weekly gain since May 16, prices from local banks compiled by Bloomberg show. The currency

rose 0.6% today and is Asia’s best performer this week. Indian sovereign bonds completed a

second weekly advance.
“Strong inflows continue to lend support to the rupee,” said Paresh Nayar, head of

currency and money markets at FirstRand in Mumbai. “India looks relatively attractive when

you see other major world economies slowing.”
The Reserve Bank of India forecasts the $1.9tn economy, Asia’s third-largest, to grow 5.5%

in the year ending March 2015, compared with 4.7% last year.Three-month offshore non-

deliverable forwards for the rupee rose 1.6% this week and 0.7% today to 63.27 a dollar,

data compiled by Bloomberg show. Forwards are agreements to buy or sell assets at a set

price and date. Non-deliverable contracts are settled in dollars.