Citi downgrades Cummins India to 'sell', prefers L&T

Reuters

Reuters Market Eye - Citigroup has downgraded Cummins India(NSI:CUMMINSIND) to "sell" from "neutral" and cut the price target to 377 rupees from 410 rupees, noting that its shares rallied in the last month despite a difficult operating environment.

Citigroup says power demand in India has eased since November 2012, while diesel prices have risen, posing a challenge for the diesel engine maker.

"Given the tougher operating environment, we would not be surprised if this guidance gets revised downwards," Citi said in a note to its clients.

Citi added that investors should switch to Larsen & Toubro Ltd (NSI:LT.NS - News) instead. *At 0359 GMT, shares of Cummins were up 0.59 percent at 404 rupees.

(Reporting by Indulal PM)

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