On the life insurance space, Pandey noted that growth trends have been uneven through the year so far. “On the life insurance side, Q1 of FY26 was pretty soft, with growth of about 5.5%. However, when we look at April to November, numbers have definitely improved for the industry to around 12–14%,” he said.
That said, margin pressures remain a concern. Pandey pointed out that distributor payouts are likely to be fully implemented by the fourth quarter, which could weigh on profitability in the second half. “Margins are going to be under pressure, and that is why we are very selective in this space. Our sense is that FY27 will be a more normal year for the industry,” he added.
Within insurance, Pandey prefers companies that have focused on non-participating and unit-linked products. “HDFC Life is our preferred pick, with a target price of around ₹860,” he said, while indicating limited enthusiasm for chasing broader sector exposure at this stage.
Turning to the IT sector ahead of key earnings from TCS and HCL Tech, Pandey played down expectations of any major upside surprise. “Result-wise, not much is expected. Tier-I IT companies could deliver anywhere between 0.3% and 2.2% quarter-on-quarter growth,” he said, adding that HCL Tech could be at the higher end of that range due to seasonality in its software products business.
He stressed that management commentary will matter more than headline numbers. “What we will watch closely is commentary on CY26 budgets, any signs of discretionary spending revival, and how Gen-AI is scaling up for companies,” Pandey said. Among IT stocks, his preference lies with LTIMindtree and KPIT, where growth visibility appears relatively stronger.
On real estate, Pandey pushed back against fears of a broad-based slowdown, despite some companies flagging softer numbers. “Real estate was the best-performing sector in 2024, delivering around 38% returns, while in 2025 it has been among the worst performers,” he said, adding that interest rates remain at lifetime lows.“This is not the time to turn negative on real estate, but one definitely needs to be selective,” Pandey said. He highlighted Phoenix Mills as a preferred name, noting strong consumption growth in malls and improving leasing activity in key Mumbai assets. “Mall consumption is expected to grow at around 20%, and leasing has improved from about 67% to 77% in some locations,” he pointed out.
Addressing concerns around the disconnect between pre-sales and revenue recognition in the sector, Pandey said execution timelines remain a challenge, especially on the residential side. “Some companies may miss their full-year pre-sales guidance, and residential could see a soft patch,” he acknowledged.
However, he remains constructive on players with a balanced mix of residential and commercial assets. “The commercial side continues to be robust. That is why we like companies such as DLF and Max Estates, where commercial contributes meaningfully to overall performance,” Pandey said.
Overall, Pandey believes the recent correction has already priced in a fair amount of risk. “Most real estate companies are trading below their NAVs. Incrementally, we will turn positive on individual names, but we are not expecting any major fireworks this quarter,” he said.
