Insurance shares have plunged more than 40% after the regulator announced commission caps, sparking a sell‑off that has outpaced fundamentals.
But Mukul Kochhar, head of equities at Investec Capital Services, argues the correction is over‑done, labeling the current prices "cheap" and urging deeper buying.
He added that the regulator will remain rational, incorporating industry feedback to temper future interventions.
Meanwhile, PSU banks are viewed as attractive plays, as RBI is poised to raise rates amid higher global rates and falling domestic real yields, a move that could lift earnings for state‑owned lenders.
Kochhar also highlights midcap and large‑cap private banks that have executed well, though he refrains from naming specific institutions, noting that returning to a more competitive environment could benefit those banks.
Other sectors see mixed signals: healthcare remains a top pick over core pharmaceuticals due to rising disposable income; infrastructure enjoys robust factory orders; and defence is regaining momentum with high‑quality, low‑cost systems.