LEADCOM, a real growth company.

I cannot see it slippin back.

The news on the A3 credit rating is massive going forward for Leadcom, how many other small caps are there with a rating as such to use the Bond market for funds, thus having access to cheap finanance, not expensive bank debt or dilutive placings ?

Obviously they fully understand Leadcom, something which the market obviously cannot at present.

The fact they have access to funds to seriously go after big growh now, including lumpy contracts like 300m$ from BSNL (which is not in forecasts at present) and then the even bigger Reliance project, and these funds are low cost and also non-dilutive, well, at 54p has the market got Leadcom priced right ? or wrong ?

The Altium update ignored the fact that higher margin work was being won, and also noted the potential for higher cost of money to expand. Looks like Altium were wrong and got it wrong, as Bonds is the answer. Will they be upgrading again now to a higher price target ? I think not yet, that will wait for BSNL contract win news, which we hope will be mid Q1 07, pending the court decision on 15th Jan.

I also think Altium were incorrect on their concerns over higher costs due to the dollar weakening. I think they should be aware that like any company, they have access to different currencies, and if you are buying things based on US$ prices, then now its cheaper to buy, so in effect you are somewhat covered in this aspect. I think margins are going to be better than Altium expect come the late February results.

This new contract in India will use up some cash as it gets moving in the initial stages, thats what working cap is here, pending payments later, so with this new smaller contract in the bag I would expect cash to be lower than the present Altium update, with the obvious increase in debtors levels , as you'd expect from these types of delivery of contracts/systems.

Given the potential for a 300m$ contract in Q1 07 (thats not in forecasts), given they are delivering 40% YOY growth, given they have progressed away fom being a "placing to raise working cap" company now they have access to bonds and also a new even bigger mega tender for Reliance India in 07, then Leadcom should not be falling back, it should now be onwards and past the price target, people are failing to realise what this credit rating means, IMO.

We also should not take anything away from the contract news just out, this is not the big mega tenders, but shows progress is being made and Leadcom India are putting themselves into a position of being able to grow and gain good contracts outside of the big mega tenders that are going to become the norm as India undergoes massive telecom growth in the coming 6 years.

I would expect to see a rising trend, and the institutonals now snapping up spare stock as any comes up when short termers sell on a small rise.