Most Indian stocks declined before the central bank meets for a policy review today.

Bharat Heavy Electricals Ltd. (BHEL), the nation’s biggest maker of power equipment, headed for a one-month low. Larsen & Toubro Ltd. (LT), the largest engineering company, declined the most in two weeks. Carmaker Maruti Suzuki India Ltd. (MSIL) rallied the most in five weeks after its quarterly profit almost tripled.

Three stocks fell for every two that rose on the S&P BSE Sensex Index, which declined 0.1 percent to 20,542.07 at 10:27 a.m. in Mumbai. Reserve Bank of India Governor Raghuram Rajan will raise the key repurchase rate by 25 basis points to 7.75 percent, according to 32 of 42 analysts surveyed by Bloomberg. Monetary policy must tackle elevated inflation even as growth remains “tepid,” the RBI said in a report released after the market closed yesterday.

“The RBI report shows there’s still some concern on inflation,” Sandeep Bhatia, executive director and head of sales at Kotak Institutional Equities, said on Bloomberg TV India. The RBI may raise the repo rate by 25 basis points and cut the marginal standing facility by the same amount, he said.

Rajan, who pledged to contain price increases after taking charge of the RBI last month, faces consumer-price inflation of almost 10 percent as the rupee’s 12 percent drop over the past year stokes import costs. He will reduce the marginal standing facility rate by 25 basis points to 8.75 percent, according to 9 of 14 economists in a Bloomberg survey, as he scales back emergency liquidity curbs imposed on the banking system three months ago to stem a plunge in the rupee.

Banks borrow in the MSF facility window when they exhaust the amount they can access at the repo rate.

Maruti Profit

Bharat Heavy slid for the fifth day, losing 2.5 percent. Larsen & Toubro decreased 2.4 percent, the most since Oct. 17.

Maruti Suzuki jumped 5.3 percent, the most since Sept. 19. The company reported after the market closed yesterday that net income almost tripled to 6.7 billion rupees ($ 109 million) in the September quarter. That exceeded the 5.48 billion-rupee median estimate of 43 analysts surveyed by Bloomberg.

Ranbaxy Laboratories Ltd. may report quarterly profit of 1.49 billion rupees, compared with 7.57 billion rupees a year earlier, according to the median estimate of 28 analysts. The shares fell 0.8 percent.

The Sensex has gained 5.8 percent this year and trades at 13.9 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s 10.7 times. Quarterly profits at 13 of 14 companies in the Indian (SENSEX) gauge that have posted earnings so far this season have beaten or matched estimates, data compiled by Bloomberg show. About 47 percent of the companies trailed forecasts in the June quarter.

Foreign investors bought a net $ 113.6 million of domestic shares on Oct. 25, taking this year’s inflow to $ 15.6 billion, data from the regulator showed yesterday. They have purchased $ 2.17 billion of shares this month, extending September’s $ 2 billion inflow.

The CNX Nifty (NIFTY) Index decreased 0.1 percent to 6,095.30. The India VIX, which gauges the cost of protection against losses in the Nifty, gained 0.3 percent.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net