Deutsche Bank:: Pantaloon D/G to Hold; Spectrum pricing

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Pantaloon Retail India Ltd: Free cash flow struggle continues. D/G to Hold
[Harrish Zaveri]
We are downgrading Pantaloon from Buy to Hold due to a) poor cash flow from
hypermarket stores, b) struggling consumer and trade finance business (30% of
balance sheet), and c)  weak bargaining power with brand-name suppliers for
consumer staples and durables. We are 42% below consensus on EPS estimates.
We believe the Street is focusing on the core retail earnings and is not factoring in
the financial impact of non-retail subsidiaries. We are lowering our target price
from INR705 to INR250.

Indian telecom sector: Spectrum pricing report released [Srinivas Rao]
TRAI has released its recommendation on Spectrum pricing which is based on a
report from an expert group. Key takeaways: * Based on the spectrum allocated
beyond 6.2Mhz and the balance period of the license in those markets. Potential
payout for Bharti is $750m, potential payout for Idea is $300m. * The pan-India per
MHz price of spectrum for 20 years is Rs 46bn for allocation up to 6.2Mhz and Rs
17.7bn for spectrum beyond 6.2Mhz. * The price is applicable from 1st Apr, 2010.
Indian Auto sector: What's in the price? [Srinivas Rao]
Indian auto companies have underperformed a falling market (the BSE Auto Index
is down 5% vs. the Sensex) since the  beginning of 2011 due to the perceived
risks of inflation, input costs and interest rates. We lay out the various scenarios
that current prices are implying in terms of margins, growth and valuations. We
conclude that Tata Motors, Bajaj and TVS’s prices discount pessimistic scenarios,
while M&M and Maruti discount moderately conceivable scenarios. Ashok Leyland
and Hero Honda could further de-rate if market sentiment weakens.
Health Care: Teva’s weaker than expected guidance matches our UW view
[Abhay Shanbhag]
Teva (TEVA.OQ, Buy, TP: USD 64.0 covered by DB US) leads global and US
generics (~20% vol. share). Its 4Q revenues of USD 4.4bn (+16% yoy, DBe USD
4.7bn) was driven by  (a) manufacturing issues at Irvine (US) plant (b) delay in key
US approvals and (c) year-end supply  issues. However non-GAAP Q4 EPS was
inline at USD 1.25 (+33% yoy, DBe 1.25) due to higher gross margin (+32bps) and
lower costs compared to expectations.
BPCL: 3Q result disappoints on lower govt compensation [Harshad Katkar]
BPCL reported lower than expected net profit at INR1.9bn (-51% YoY, -91% QoQ)
due to higher net under-recoveries of INR5.2bn (20% above our est.), lower other
income of INR3.1bn (-33% yoy, - 42% qoq) and tax of INR1bn for previous years.
M&M: 3QFY11: In line results; tractor margins strong [Srinivas Rao]
Mahindra & Mahindra's 3QFY11 operating results are in line with our expectations.
* Revenue at Rs 61.2bn (36% YoY, 1% above DBest). * EBITDA is at Rs 9.2bn
(35% YoY, in line with DBest) and EBITDA margin was 15.1% (-70bps QoQ).
Adani Power: Q3FY11 results in line with est., reiterate Buy [Manish Saxena]
Adani Power's Q3FY11 recurring result is largely in line with our estimates. The
reported earnings at INR INR 1.09bn looks -30% below DBe.
Asia Economics Special: India: Raising our inflation and policy rate hike
forecast [Taimur Baig]
The new projections incorporate (i) sticky food price levels but no additional spike,
(ii) 10% increase in petrol price, and (iii) 5% increase in diesel price in the first half
of the year. We still find inflation hovering around 8% for the rest of the year. We
are now forecasting four additional rate hikes of 25bps each in 2011