JP Morgan downgrades Larsen & Toubro Ltd (L&T) to "neutral" from "overweight" and maintains its target price of 970 rupees, saying the current share price adequately discounts near-term positives.
The investment bank adds it remains wary of risks associated with deteriorating working capital, higher-than-expected margin drag on overseas orders and a rise in the proportion of slow-moving orders.
JP Morgan says valuations at 18 times one-year forward earnings are not cheap for the company.
L&T shares down 0.7 percent at 1030 IST.
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