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    Insurance firms are long-term structural growth stories, says Kotak Institutional’s Sanjeev Prasad

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    Insurance firms are long-term structural growth stories, says Kotak Institutional’s Sanjeev Prasad

    Insurance companies are long-term structural growth stories, said Sanjeev Prasad, managing director of Kotak Institutional Equities, adding the brokerage likes the space as it "can only increase (grow) over a period of time".
    "Insurance penetration, whichever way you look at it as a proportion of premium per capita relative to other economies or general life insurance production... it's very low in the country. So this can only increase over a period of time and that’s the reason we like this space," said Prasad in an interview with CNBC-TV18.
    On the corporate tax cut, he said it’s a step in the right direction and reflects the fact that somewhere the government is making a paver to more of an investment-led growth model versus consumption-driven economy, which is the case until recently.
    “This is a necessary condition for increased investment in the economy but not a sufficient condition and I hope the government does follow the actions which would be important for the private sector to start looking at investing once again a lot more carefully,” Prasad said.
    About frontline IT, Prasad said, “No great positive or negative news in that sense. So take a call on valuations. If you are worried about the macro situation due to rating, rupee weakening, then keep some exposure to the sector otherwise we have a slightly neutralist kind of a view on the sector as of now.”
    According to him, we need to see if recent demand pickup in auto is only due to festive season.
     
    Disclosure:
    Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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