Credit Suisse cuts Tata Motors to 'underperform'

Credit Suisse downgraded Tata Motors to "underperform" from "neutral" after cutting its volumes forecast and increasing its tax rate assumption for the Indian auto maker's unit Jaguar Land Rover.

Credit Suisse said Tata's earnings out on Thursday were in-line with expectations, but added margins for key unit JLR would decline due to increasing pricing pressures in various markets.

The investment bank cut its JLR volumes forecast for fiscal 2013 to 365,000 units from 374,000 units, while saying it assumed a tax rate for the unit of 24 percent from its previous assumption of 22 percent following management guidance.

Credit Suisse also cut its target price on the stock to 218 rupees. Tata Motors shares were last down 1.9 percent to 234.80 rupees.