Vinit Sambre, Head of Equities at DSP Mutual Fund, which manages assets worth over $242 billion, prefers life insurance over general insurance despite recent regulatory challenges. According to reports from CNBC TV18, Sambre believes the long-term opportunity remains intact because insurance penetration in India is still low. He stated that "the sector should see the momentum come back because there is definitely a big need of insuring more people." While regulatory changes and slower growth have weighed on the sector in recent quarters, Sambre considers life insurance a better play due to the large opportunity size and consolidation among players.
On private sector banks, Sambre believes the worst of the net interest margin pressure may now be over, as reported by CNBC TV18. While deposit mobilisation has remained challenging, improving liquidity and healthy asset quality should support earnings going forward. He noted that "on the private sector banks, the valuations are pricing in some of these challenges, and hence it makes a case to hold on to the private sector." Sambre expects investor interest in the sector to improve as earnings growth becomes more visible, with the latest earnings season showing encouraging results outside commodities and large private banks.
Among sectors, auto ancillaries remain DSP Mutual Fund's strongest conviction, according to CNBC TV18 reports. Sambre explained that these companies are no longer dependent only on automobile demand and are increasingly expanding into newer areas such as aerospace, electronics manufacturing services (EMS) and semiconductor-related components. He stated that "the auto ancillaries should continue to do well. They are expensive. They are not cheap. But at every possible opportunity, one should be looking at that from a long term perspective."
The fund is gradually increasing exposure to specialty chemicals and agricultural input companies after signs of improving pricing and profitability, as reported by CNBC TV18. While commodity price volatility remains a risk, Sambre believes the sector's medium- to long-term outlook is improving after several weak years. Regarding the information technology sector, the fund house remains selective as AI-related concerns continue to weigh on investor sentiment, but several companies have started reporting large deal wins with management suggesting the worst of pricing pressure may be behind them.
