Indian markets are in an initial stage of a strong economic recovery aided by strong inflows and stable rupee, Pratik Gupta, CEO & Co-Head for Institutional Equities at Kotak Securities said on Tuesday.

In an interview with CNBC-TV18, Gupta noted that we are seeing the beginning of a multi-year upcycle in commercial vehicles and that a strong replacement demand will aid auto stocks.

“We continue to remain positive on auto stocks and Ashok Leyland is our preferred pick in that space and M&M is a big beneficiary of tractor upcycle, which already started but will continue for a much longer period,” he said.

He also likes the pharmaceutical sector from a long-term perspective. "From 3-5 year perspective the Indian pharma sector will do well and will see more free cash flows from pharma companies,” said Gupta.

On IT sector, he said, “We are positive on the IT services outlook and we do not see a major headwind as far as the currency is concerned or cost angle or H-1B visa – those issues are behind us now.”

For entire interview, watch video

(Edited by : Pranati Deva)