Try this (Some explanation as comment in xslt):
<?xml version="1.0" encoding="UTF-8"?>
<xsl:stylesheet version="1.0" xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
<xsl:output method="xml" indent="yes"/>
<xsl:template match="/">
<RateList>
<xsl:apply-templates select="*/ROW"/>
</RateList>
</xsl:template>
<xsl:template match="ROW">
<!--Look for preceding row which has not the same data (RATE_AMOUNT and DISCOUNT ) as the current.
And generate a id, here month concatenated with an '#'.-->
<xsl:variable name="notSameData"
select="concat(preceding-sibling::ROW
[not(RATE_AMOUNT=current()/RATE_AMOUNT
and DISCOUNT=current()/DISCOUNT )][1]/MONTH,'#')"/>
<!--Count following month which has same data as current
and also the same preceding month with not the same data as the current-->
<xsl:variable name="noOfMonths"
select="count(following-sibling::*
[ RATE_AMOUNT=preceding-sibling::*[1]/RATE_AMOUNT and
DISCOUNT = preceding-sibling::*[1]/DISCOUNT]
[
concat(preceding-sibling::ROW
[not(RATE_AMOUNT=current()/RATE_AMOUNT
and DISCOUNT=current()/DISCOUNT )][1]/MONTH,'#') = $notSameData
]) +1 "/>
<!--Output only for rows which don not have a not a direct (first) preceding one with same data.-->
<xsl:if test="not(preceding-sibling::ROW[1][RATE_AMOUNT=current()/RATE_AMOUNT][DISCOUNT=current()/DISCOUNT])">
<Rate>
<NoOfMonths>
<xsl:value-of select="$noOfMonths"/>
</NoOfMonths>
<StartDate>
<xsl:value-of select="START_DATE"/>
</StartDate>
<RateAmount>
<xsl:value-of select="RATE_AMOUNT"/>
</RateAmount>
<Discount>
<xsl:value-of select="DISCOUNT"/>
</Discount>
</Rate>
</xsl:if>
</xsl:template>
</xsl:stylesheet>
Which will generate the following output:
<?xml version="1.0"?>
<RateList>
<Rate>
<NoOfMonths>2</NoOfMonths>
<StartDate>15/04/2013</StartDate>
<RateAmount>10</RateAmount>
<Discount>-2</Discount>
</Rate>
<Rate>
<NoOfMonths>1</NoOfMonths>
<StartDate>15/06/2013</StartDate>
<RateAmount>10</RateAmount>
<Discount>-5</Discount>
</Rate>
<Rate>
<NoOfMonths>1</NoOfMonths>
<StartDate>15/07/2013</StartDate>
<RateAmount>10</RateAmount>
<Discount>-2</Discount>
</Rate>
</RateList>
Comment: I did not use xlt:key because my favorite xlst processor xsltproc does not support current() in xls:key statements.