ING Vysya Bank can move to Rs 630: SP Tulsian

SP Tulsian, sptulsian.com is of the view that ING Vysya Bank can move to about Rs 630 in next six months or so.

Tulsian told CNBC-TV18, "ING Vysya Bank is owned by the Dutch ING group which is holding 30-40 percent stake in the company. Looking at the financial performance, for the first nine months, the bank has posted a profit after tax (PAT) of Rs 443 crore, while PAT for FY12 was at Rs 455 crore or so. So it resulted into an earnings per share (EPS) of Rs 29 for first nine months of FY13, while it was at Rs 32 for whole of FY2. That means it is likely that Q4 will be having an EPS of close to about Rs 10. So that will make the EPS of FY13 at Rs 39 or maybe Rs 40."
He further added, "The bank has been gradually improving their bottomline. There has been gradual improvement of about 2-3 percent in the bottomline of ING Vysya Bank every quarter sequentially. For Q3, the EPS has been closer to about Rs 11, which was Rs 10 for Q1. I am expecting that this trend is likely to continue. FY14 should have an EPS of closer to Rs 44 that translates into a price to earnings ratio (P/E) multiple of closer to about 13 times based on FY14 earning."
"If I take their current book value and extrapolate that as on March 31, 2014, it is ruling at a price to book of 1.7. The asset quality has improved in the Q3 with lowering of the gross non-performing assets (NPAs) as well as owning of the net NPA also. The bank has closer to about 550 branches, which has a strong foothold. As I said, the price to book, earning multiples are quite low."
"Some of the private sector banks have not largely participated in this rally along with the other private sector banks. This seems to be one such stock which is likely to do well in the times to come. So, I expect the stock can move to about Rs 630 in next six months or so." Disclosure: I have no holdings or interest in the stock discussed.