Sell Maruti Suzuki; buy ING Vysya Bank: AnandRathi

AnandRathi's research report

Maruti Suzuki India - Demand pressure continues; Sell
"We adjust our estimates to factor in lower volumes in 1Q. Our estimates for FY14 and FY15 are lowered 5.8 percent and 6.6 percent, respectively. MSIL would benefit ahead in FY14 from a favourable exchange rate and a low base for its vehicle sales. However, headwinds from curtailed demand for passenger cars and new launches by competitors would be spoilsport in the next two quarters. We believe that the near-term positives are factored in the price and the stock now trades at fair valuations. Hence, we maintain Sell with a price target of Rs 1,521."

ING Vysya Bank - Equity infusion to enhance prospects; Buy
"We raise FY14 and FY15 net profit 2.8 percent and 2.5 percent, respectively, and increase our target from Rs 713 to Rs 739, to factor in the capital infusion. We value the bank at 1.9x FY14BVe (2.1x earlier) on lower RoE. High NIM of +3.4 percent, better productivity and high NPA coverage are likely to expand RoA to 1.5 percent by FY15 from 1.2 percent in FY13. We reiterate Buy, with our target based on the two-stage DDM (CoE: 14.6 percent; beta: 0.9; Rf: 8 percent)," says AnandRathi research report.

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