(Corrects headline and first bullet to say the stock was
downgraded to 'underperform' from 'neutral')
* Credit Suisse downgrades Larsen & Toubro to
'underperform' from 'neutral', on concerns about deteriorating
order flow mix and rising working capital cycle, which could
impact margins and cash generation.
* Over 40 percent of L&T's orders are from the Middle East and
real estate segments which are "prone to execution delays" and
would earn lower margin.
* It would be difficult for L&T to sustain this growth momentum
on its historic high inflows, Credit Suisse said in a note.
* Credit Suisse believes L&T is expensive at 17.5 times FY14
parent EPS for 10 percent EPS CAGR (FY12-14E) and also does not
expect any material improvement in return on equity.
* At 0555 GMT, shares were up 0.81 percent at 1,679 rupees.