ING Vysya still a 'Buy': Espirito

Espirito Santo Securities has reiterated its ‘Buy’ rating on ING Vysya Bank with a fair value of Rs 711 as it believes it to be the best candidate for a re-rating closer to new generation private banks in line with its thesis that ING Vysya is increasingly close in profile to new generation private sector banks.It has forecasted ING Vysya Bank to deliver a RoE of c.16.0% in FY14E and expect RoE to increase steadily further to c.17.4% in FY15E.

It expects the bank to re-rate to 1.9x FY14E P/B, which is a premium to old generation private sector banks and closer to the valuation of new generation private sector banks. This is in line with its thesis that ING Vysya is closer to new generation private sector banks on account of its strong corporate franchise.