Broking companies turn bearish on Larsen & Toubro

MUMBAI: India's largest capital goods company Larsen & Toubro's business is under pressure as the investment cycle has substantially slowed down on the back of various macro headwinds such as policy logjams, rising interest rates and commodity prices.

Over the past couple of days several brokerage houses including Citigroup, Barclays, Nomura and ICICI Securities has raised concerns over L&T's future growth prospects.

Citigroup has downgraded the stock to 'Neutral' from 'Buy' and has cut its target price to Rs 1,732 from Rs 1,855, citing cancellations of orders in the second quarter of fiscal 2013. Barclays has downgraded the stock to 'Equal-weight' from 'Overweight' and has cut its target price to Rs 1,750 from Rs 1,851. Nomura has put 'Reduce' rating on the stock while ICICI Securities has put a 'Sell' rating.

"Fiscal year 2014 could be challenging due to a slowdown in the economy," said a company source.