Morgan Stanley and Citigroup downgrade their ratings on cement maker Jaiprakash Associates Ltd.
Morgan Stanley downgrades Jaiprakash to "equal-weight" from "overweight", citing worsening headwinds for cement profitability, a reduced likelihood of the RBI cutting interest rates and a lack of asset sales so far to meaningfully reduce debt levels.
Citigroup cuts the company to "neutral" and high-risk from "buy", citing "an overleveraged balance sheet, perplexing diversification and recent move by RBI to tighten liquidity."
Jaiprakash reported on Monday net profit in the April-June quarter more than doubled, though that was helped mainly by one-time gain from the sale of shares in a subsidiary.
Jaiprakash shares are down 2.77 percent and have lost almost 40 percent in value in the last two months on concerns about mounting interest costs.