LEADCOM, a real growth company.

How much of the BSNL job, if and when, will be attributed to 2007 figures ? Its a question I keep pondering.

Based on a 300m $ contract for Leadcom, over a 24 month period, would the split be say 80m in 07 and 220m in 08 ? or 100m in 07 and 200m in 08, or would it be spread over 3 Leadcom financial years, say 70m in 07 and 180m in 08 and 50m in 09 ?

I'll take my worst case for 07 and say just 70m in 07, to add to the 180m would make 250m sales in 2007, (an increase of 113m$ or circa 82% YOY), that should give around about circa 14 cents EPS in 2007 (also allowing for a reduction in tax from 30& to 29%). 14 cents in 07 at todays exchange rate is 7.14p EPS (should the dollar return to 1.8 levels then that is 7.77p EPS).

Based on running a lowly current year PER of times 15 for 07 that would mean 107p target price based on conservative ratings.

If Leadcom is then rated at such levels 20 times current and 15 times forward, the target price should of course be nearer 150p - expecially when you consider they should be bagging the Reliance mega tender as well, which will again rerate 2008 and 2009 revenue forecasts.

I would thus expect Altium to raise their target price to 105p as soon as Leadcom gets its first orders from Ericsson and Nokia for the BSNL work (court ruling pending of course on 15th Jan).

With the fear of placings extinct for Leadcom through their new credit rating and ability to tap the bond market, a much higher rating should be implied than simply 15 times current year forecasts IMO.