The investment bank also notes L&T's shares look expensive, given the declining outlook for earnings.
Credit Suisse downgrades Larsen and Toubro to "underperform" from "neutral" and cuts the price target to 713 rupees from 955 rupees ahead of the Indian engineering and construction firm's earnings on Friday.
Credit Suisse says it expects L&T's domestic order flow to have slowed down, while an increasing share of overseas orders is of lower margin.
The investment bank also notes L&T's shares look "expensive," given the declining outlook for earnings.
L&T shares down 3.5 percent at 841.30 rupees as of 0903 GMT.