India’s Sensex Declines; Bharti, DLF Fall as Automakers Advance

Jan. 29 (Bloomberg) -- Indian stocks fell, with the benchmark index snapping a two-day, 6.7 percent rally. Bharti Airtel Ltd. and Reliance Communications Ltd., India’s two biggest mobile-phone operators, dropped after they had their price targets cut at Goldman Sachs Group Inc.

DLF Ltd., India’s biggest real estate developer, declined after its share price forecast was reduced at Morgan Stanley, which said weak demand for property will damp profits. DLF will report earnings on Jan. 31.

“We are seeing demand declining and revenue contracting,” said Mahesh Patil, who helps manage the equivalent of $8.8 billion at Birla Sunlife Asset Management in Mumbai. “Cost pressures are high, now with demand declining it will create a problem.”

Mahindra & Mahindra Ltd., the largest local maker of sport- utility vehicles, led automakers higher after the government cut retail fuel prices for the second time in less than two months.

The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 21.19, or 0.2 percent, to 9,236.28. The S&P CNX Nifty Index on the National Stock Exchange fell 25.55, or 0.9 percent, to 2,823.95. The BSE 200 Index slid 0.5 percent to 1,086.02. S&P CNX Nifty futures for January delivery declined 0.8 percent to 2,823.70.

Bharti fell 3.8 percent to 627.40 rupees. Reliance Communications declined 2.6 percent to 161.85 rupees. Bharti’s 12-month share price estimate was lowered 5.5 percent to 800 rupees while that of Reliance Communications was lowered 25 percent to 170 rupees, according to a Goldman Sachs report released today. Goldman cited the effect on earnings from spending on high-speed networks.

DLF dropped 7.6 percent to 164.05 rupees. The developer’s stock price estimate was cut by 41 percent to 150 rupees a share at Morgan Stanley. The company is expected to report a 26 percent decline in earnings in the December quarter, according to the median estimate of analysts surveyed by Bloomberg News.

Mahindra added 3.9 percent to 294.40 rupees. Tata Motors Ltd., India’s largest truck and busmaker, gained 3.7 percent to 152.05 rupees. Maruti Suzuki India Ltd., the No. 1 carmaker, added 4.6 percent to 544.45 rupees. Gasoline prices will be lowered by 5 rupees (10 U.S. cents) a liter, diesel by 2 rupees a liter, and cooking gas by 25 rupees a bottle effective midnight, Oil Minister Murli Deora said late yesterday.

The following are among the most active shares traded on the Bombay and National stock exchanges. Stock symbols are in parentheses after company names:

Asian Paints (India) Ltd. (APNT IN) dropped 30.8 rupees, or 4 percent, to 749.80, its lowest since April 2007. The nation’s largest paintmaker reported that its founders pledged a 15 percent stake following tightened disclosure norms.

GAIL India Ltd. (GAIL IN) slid 4.25 rupees, or 2.1 percent, to 197. India’s monopoly natural gas distributor said yesterday third-quarter profit declined 59 percent to 2.53 billion rupees. That was below the 5.9 billion rupees median estimate of analysts surveyed by Bloomberg News.

Reliance Power Ltd. (RPWR IN) added 1.9 rupees, or 1.9 percent, to 104.5. The unit of India’s third-largest power generator may win its third so-called ultra mega power project with the lowest bid to build a 4,000 megawatt electricity generation plant. Reliance Power quoted a price of less than 2 rupees a unit to sell power from the coal-fired project in Jharkhand state, said an official of the state-run Power Finance Corp., which manages the bidding on behalf of India’s Power Ministry.

Tata Steel Ltd. (TATA IN) rose 6.5 rupees, or 3.7 percent, to 183.70. India’s largest steelmaker aims to revive fourth- quarter earnings by lowering fuel costs and increasing exports.

The company has renegotiated lower coking coal rates for this quarter, Managing Director B. Muthuraman said yesterday. Tata Steel plans to triple exports to 330,000 tons in the period as local demand wanes for hot-rolled coils, Chief Operating Officer H.M. Nerurkar said.