7 Hot Indian Stocks

India recently decided to open up its equity market to individual foreign investors. The hope is that allowing foreign investors to buy Indian stocks directly would help reverse a yearlong decline in Indian stock prices and lead to more foreign investment in the Indian economy. If you're not ready to jump into the Bombay Stock Exchange just yet, here are seven Indian stocks on a roll that are traded on US exchanges. They all pay a dividend, too.

1. HDFC Bank (HDB) rose more than 7% in the past week and is about 27% higher year to date. Its net profit surged 31.4% year over year in the fiscal third quarter due to strong growth in net revenue. This Mumbai-based lender has a market cap of $26 billion and a dividend yield of 0.7%. The long-term EPS growth forecast is 29.3% and short interest is only 0.3% of the float. Over the past six months, the stock has outperformed fellow Mumbai-based lender ICICI Bank.

2. ICICI Bank (IBN) shares are trading more than 42% higher year to date but are still down more than 12% from a year ago. India's largest private-sector lender posted a better-than-expected jump in third quarter net profit. Its dividend yield is 1.6%, the market cap is $21.7 billion, and the long-term EPS growth forecast is 19.5%. The bank is based in Mumbai and was founded in 1955. But the stock has underperformed HDFC Bank and HSBC Holdings (HBC) over the past six months.

3. Reddy's Laboratories (RDY) is up more than 12% year to date despite pulling back more than 3% in the past week. This India-based pharmaceutical company has a dividend yield of 0.8% and a market cap of $5.6 billion. The long-range EPS growth forecast is 22.9% and the return on equity is 25.3%. The P/E ratio is less than the industry average but so is the operating margin. Over the past year, the stock has outperformed competitor Teva Pharmaceuticals (TEVA).

4. Sterlite Industries (SLT) is more than 42% higher year to date after hitting a multiyear low in late December. India's largest nonferrous metals and mining company posted double-digit revenue growth in the third quarter. It is based in Mumbai and has a market cap of $33.2 billion; its dividend yield is 1.6%. The operating margin is better than the industry average. But the stock has underperformed peer Freeport McMoRan Copper & Gold (FCX) over the past six months.

5. Tata Communications (TCL) shares are trading up more than 15% year to date but still about 9% lower than a year ago. This telecom was founded in 1986 and is based in Mumbai. It has a market cap of $1.3 billion, a long-term EPS growth forecast of 10.0%, and a dividend yield of 0.9%. Short interest is only 0.3% of the float. Over the past six months, the stock has outperformed the likes of Level Three Communications (LVLT) and Mahanagar Telephone Nigam (MTE).

6. Tata Motors (TTM) is trading more than 50% higher year to date, including up more than 5% in the past week. The automaker has struggled lately with higher commodity costs and slower domestic sales. But its return on equity is 50.3% and its operating margin is higher than the industry average. The $14.5 billion market cap company has a dividend yield of 1.7%. The stock has outperformed Ford (F) and General Motors (GM) over the past six months.

7. Wipro (WIT) is trading almost 12% higher than a month ago but still down more than 12% from a year ago. The IT services company recently launched a cloud-based platform with Oracle (ORCL). It has a dividend yield of 1.1%, and its operating margin is better than the industry average. The return on equity is 21.7%, and the long-term EPS growth forecast is 15.2%. Over the past six months, the stock has outperformed Accenture (ACN) and Infosys (INFY).

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