Buy ING Vysya Bank, Power Grid: Phani Sekhar

Phani Sekhar, Angel Broking is of the view that one can buy ING Vysya Bank, Power Grid at current level.

Sekhar told CNBC-TV18, “The first thing investors need to do in this kind of market is not to go by sectors or not to be tied down to particular themes because that is what many of the investors do. So in this kind of a market this is extremely company specific so even within sectors you have disparate performance coming out of different companies. Earnings outlook remains paramount for any investment decision. So I would tend to go with themes such as large cap IT or large cap pharma or utilities, large private sector banks because this is where earnings outlook still remains reasonably ascertain over the next three quarters or so. And valuations are not very expensive and there is a good chance that you can account around 15-18 percent returns.”
He further added, “As far as ideas are concerned as long as you are in good quality midcap stocks also, you can make money. Stock like ING Vysya Bank is something that I would recommend because it has been growing its CASA (current account savings account) franchise at a very good pace around 32 percent CASA. Asset quality is the best among the peer assets, the net nonperforming assets are to the tune of only 0.2 percent and valuations at just 1.5 times and a loan book that has started growing over the last four quarters or so presents an excellent opportunity for the investors.”
”Similarly within the utility space Power Grid is something that would merit a close attention post the correction from Rs 120 levels to Rs 105 because with a regulated return profile of around 14 percent ROE, I think that much of the pessimism in the stock for example investors are vary about what will happen beyond FY17. Now that is a very long call to take. So over the next two-three years as long as you know that they are going to grow their assets by around 16-17 percent, earning ROE in excess of 14 percent then it is a good stock to buy at these levels.”