MARKET EYE-Jefferies cuts India's Ashok Leyland to 'underperform'

Tue Jan 22, 2013 1:28pm IST

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* Jefferies downgrades Ashok Leyland, India's second-biggest bus
and truck maker, to "underperform" from "buy" and cuts its
target price to 21.8 rupees from 30.2 rupees.
* The brokerage says truck demand "continues to deteriorate",
while demand from Southern India, a critical market for Ashok
Leyland, hasn't recovered "to the extent expected."
* Jefferies also cites Ashok Leyland's "stretched" balance sheet
and "weak" cash flows. 
* The downgrade comes ahead of the company's October-December
earnings on Thursday. 
* Shares in Ashok Leyland are down 1.3 percent at 26 rupees as
of 0755 GMT.

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