Shares in the company fell as much as 17 percent on Thursday morning on the London Stock Exchange.

Revenue from mail business, which accounts for nearly half of the company's total revenue, is expected to fall by about 6 percent in the six months ended Sept. 30, the company said.

However, overall financial performance for the half year is expected to be broadly in line with its previous expectations, said UK Mail, which provides mail, parcels and logistic services.

"The seasonal pickup after the normally quiet summer period (due to holidays) does not seem to have occurred yet at the rate anticipated and volumes in Q2 have been below expectations," Investec Securities said in a note.

The brokerage cut its rating on the stock to "add" from "buy" and target price to 600 pence from 700 pence.

The Berkshire, England-headquartered company had reported first-half revenue of 243.4 million pounds last year.

Average daily parcel volumes in the first half are expected to rise by about 6 percent, driven by an increase in home

deliveries related to online shopping. The volumes grew 10 percent in the first quarter.

Parcel and post providers have been vying for a bigger share of the burgeoning online shopping delivery market, at a time when mail volumes are falling as people pay their bills and communicate electronically instead of sending stamped mail.

However, the level of parcel volume growth has continued to moderate compared to last year, the company said.

Shares in the company were down 17 percent at 469 pence at 0738 GMT.

(Reporting by Esha Vaish and Aastha Agnihotri in Bangalore; Editing by Gopakumar Warrier)