Buy ING Vysya Bank; target of Rs 636: Firstcall Research

Firstcall Research is bullish on ING Vysya Bank and has recommended buy rating on the stock with a target of Rs 636 in its January 29, 2013 research report.
 
“ING Vysya Bank Ltd., is an entity formed with the coming together of erstwhile, Vysya Bank Ltd, a premier bank in the Indian Private Sector and a global financial powerhouse, ING of Dutch origin, during Oct 2002. ING is a global financial institution of Dutch origin offering banking, investments, life insurance and retirement services to meet the needs of a broad customer base. ING is serving over 75 million private, corporate and institutional customers in over 40 countries in Europe, North America and Latin America, Asia and Australia. The origin of the erstwhile Vysya Bank was pretty humble. It was in the year 1930 that a team of visionaries came together to form a bank that would extend a helping hand to those who weren't privileged enough to enjoy banking services.”
 
“ING Vysya Bank was ranked among top 5 Most Trusted Brands among private sector banks in India in the Economic Times Brand Equity – Nielsen survey 2011. It's been a long journey since then and the Bank has grown in size and stature to encompass every area of present-day banking activity and has carved a distinct identity of being India's Premier Private Sector Bank. ING has gained recognition for its integrated approach of banking, insurance and asset management. Furthermore, the company differentiates itself from other financial service providers by successfully establishing life insurance companies in countries with emerging economies, such as Korea, Taiwan, Hungary, Poland, Mexico and Chile. Another specialization is ING Direct, an Internet and direct marketing concept with which ING is rapidly winning retail market share in mature markets. In 1980, the Bank completed fifty years of service to the nation and post 1985; the Bank made rapid strides to reach the coveted position of being the number one private sector bank. In 1990, the bank completed its Diamond Jubilee year. At the Diamond Jubilee Celebrations, the then Finance Minister Prof. Madhu Dandavate, had termed the performance of the bank ‘Stupendous’. The 75th anniversary, the Platinum Jubilee of the bank was celebrated during 2005.”
 
“The company’s net profit jumps to Rs. 1623.30 million as against Rs. 1195.20 million in the corresponding quarter ending of previous year, an increase of 35.82%. Net Income for the quarter rose 24.95% to Rs. 12388.70 million from Rs. 9915.10 million, when compared with the prior year period. Reported earnings per share of the
company stood at Rs. 10.59 a share during the quarter, registering 32.92% an increase over previous year period. Net Interest Income is Rs. 5895.30 millions as against Rs. 4935.20 millions in the corresponding period of the previous year.”
 
“At the current market price of Rs.573.40, the stock P/E ratio is at 14.35 x FY13E and 12.84 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs. 39.95 and Rs.44.65 respectively. Net Income and PAT of the company are expected to grow at a CAGR of 30% and 28% over 2011 to 2014E respectively. On the basis of Debt-Equity Ratio, the stock trades at 10.29 x for FY13E and 10.09 x for FY14E. Price to Book Value of the stock is expected to be at 1.96 x and 1.70 x for FY13E and FY14E respectively. We expect that the company will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 636 for medium to long term investment,” says Firstcall Research report.

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