Goldman Sachs on Thursday downgraded motorcycle maker Hero Honda and utility vehicles maker Mahindra & Mahindra to sell, from neutral and buy ratings respectively.

We believe Hero Honda saw the maximum margin decline relative to the industry during the strong demand momentum in 2010, and believe margins could come under further pressure due to moderating growth over FY12/13, analyst Sandeep Pandya said in a note.

Goldman said the valuation for Mahindra & Mahindra has historically moved in line with the demand cycle, and looks likely to correct with moderation in demand growth.

It raised its rating on carmaker Maruti Suzuki to neutral from sell, citing underperformance and reasonable valuation relative to the sector.