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.