This MF player expects near-term spurt in insurance stocks — here's why

The insurance sector is starting to gather some momentum, according to Taher Badshah, CIO-Equities at Invesco Mutual Fund. Speaking to CNBC-TV18 on Thursday, he said that the recent underperformance may lead to a near-term spurt in insurance stocks.

The insurance sector has been an underperformer of late but some traction has been coming in the last couple of weeks in stocks like HDFC Life Insurance, as per the market watcher.

"It has not done much, but stocks are still trading at pre-COVID levels on a valuation pyrometer," he said adding, “This sector is starting to get some bit of an excitement on the back of possible avenue of savings, once again, and that coming into play and that is leading to some traction.”

Badshah also reckons that a few new-age companies are beginning to look in a better investable shape now.

“We are looking at companies where we think balance sheets can support growth, have reasonably large total addressable market (TAM); companies which can continue to maintain leadership characteristics in their competitive market advantage that they started off with, at least for the next foreseeable future," he explained.

The investment management company also likes commercial vehicle (CV), agriculture and some passenger vehicle (PV) players. It also believes that the banking and financial sectors will maintain their strong momentum.