Agarwal said the latest draft regulations on insurance commissions could dent earnings, but banks likely see only modest cuts—an insight that places banks on a smaller margin swing compared to the broader sector.
He highlighted strong credit growth, stable margins, and benign asset quality as pillars supporting the underlying banking business, underscoring that earnings estimate cuts for banks would be limited to a few percentage points.
On the insurance front, Agarwal sees a long runway for growth; the sector has undergone significant derating over the past three to four years, making valuations across life and general insurance particularly attractive.
In the NBFC arena, especially microfinance, he cites benign asset quality, recapitalisation, reasonable growth prospects, and improving cost‑to‑income ratios as key drivers that could unlock value.
Agarwal remains constructive on NSE itself, describing it as a market leader and cash‑flow machine, and notes that its valuations are not expensive despite a softer grey‑market premium ahead of the listing.
He cautions about regulatory concerns around futures and options trading, particularly recent changes to the closing price mechanism, and stresses the need to balance speculation with revenue streams for exchanges.
Looking ahead, Agarwal keeps an eye on upcoming regulatory updates and the potential ripple effects on distribution channels, while maintaining a watchful yet optimistic stance on the broader financial market.