ING Vysya Bank delivered an extremely strong set of numbers. In Q4 FY11, it’s NII stood at 268 cr, up 8% YoY, however it’s PAT was up 145% at 91 cr. For the whole year, it’s NII stood at 1006 cr as against 830 cr, up 21% and PAT stood at 318 cr as against 212 cr, up 50%. The current FY11 EPS stands at 26.4 as against the expected EPS of 24. The company clearly delivered FY11 results above expectations and the management is looking confident to post strong set of numbers in FY12 as well.

The reason I recommend ING Vysya Bank as an investment because this company is growing at a rapid pace and it is trading at a discount to it’s peers. The current P/E stands at 12 or so. Comparing to it’s closest peer that is growing at similar pace and is trading low to it’s peers is Yes Bank which trades to a FY11 earnings P/E of 14. So clearly we can see why ING Vysya should be a top pick from a long term view, provided the company does manage to grow as we expect. Im sure if it does, we can surely see a re rating in this counter.

Now let us take a look into FY12 estimated numbers. In FY12, brokerages estimate an EPS growth of 35%. Considering the recent rate hikes and more to come, even if I discount the earnings estimates by 5%, the FY12 EPS stands at almost 34.5 that relates to one year forward P/E of around 9. So clearly ING Vysya is looking interesting that way. I value ING Vysya Bank around 13X FY12 earning estimates and give a target price of 450.

Buy ING Vysya Bank(cmp: 320) with a target price of 450 from a 12 months perspective.

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