In conversation with Shikhar Aggarwal, Joint Managing Director, BLS International Services Ltd
All the company's recent projects have started to pick up with countries opening up their borders and shall continue to witness steady growth in this financial year.
"Our focus is to build robust tech-enabled processes with efficient execution and investments in technologies to utilise exciting possibilities related to digitisation, last-mile penetration and enhanced service experience." says Shikhar Aggarwal, Joint Managing Director, BLS International Services Ltd.
Travel and tourism being crucially hit by COVID-19 pandemic, how intense has the impact been on your business?
BLS International is a trusted global tech-enabled services partner for governments and citizens. Our business is diversified into visa & passport services, consular services, e-visa services and front-end as well as citizen services to the governments in India & abroad. Our business is also globally diversified wherein, we serve over 46+ client governments, spread across approximately 66 countries. We have also established a robust network of banking points to deliver banking services to the unserved as well as underserved rural and remote population of India by bringing last-mile connectivity & financial inclusion. With this, we have successfully reduced the impact of the pandemic on our business to a larger extent. If we compare our revenues of FY19 (as it wasn’t impacted by COVID-19), our revenues of Rs 803 crore for the year or Rs 200 crore, an average quarterly revenue, has come down to Rs 150 crore. This impact is mainly due to the closure of visa centres in most of the location; however, our consular services and other business stood strong with a positive EBITDA of 11 per cent. So yes, the decline in global travel & tourism has impacted our business but we have mitigated the impact with diversification to other businesses.
Additionally, our asset-light model and continuous efforts to streamline costs aligned to the level of operations helped us to stay strong during this pandemic. We managed to limit the decline by continuous focus on cost rationalisation and realigning expenses in line with the current level of business operations wherein our employee costs came down from Rs 17.9 crore in Q3FY20 to Rs 12.5 crore in Q3FY21. And for 9MFY21, reported PBT was at Rs 32.7 crore compared to Rs 46.6 crore in 9MFY20, which is exceptional in relative terms if we compare with the industry that’s grappling for survival. We were honoured to be a part of the prestigious ‘Vande Bharat Mission’ by the government during the most critical times and we ensured that we deliver best-in-class consular services to our fellow citizens during the most adverse time.
To sum it up, despite the challenges and a not-so-stable global economy, owing to the pandemic, we have been able to manage & maintain healthy financial performance.
Despite this crisis, the company has reported positive financial numbers in Q3FY21. According to you, which factor has contributed the most to keep the financial performance on track?
Despite these turbulent times, we managed to record strong financials inFY21. During Q3, we were able to register a 15 per cent QoQ increase in our revenues as we were able to witness an improvement in Punjab, StarFin (banking correspondent business) & consular services operations and registered 280 bps improvements in gross margins. The revenues during the last financial year (FY21) were mainly contributed by consular and citizen services globally. Our citizen services contract in states like Punjab started functioning at pre-COVID levels, where we had processed almost 1.5 million applications during the third quarter. The passport and consular services also picked up momentum and are now close to pre-COVID levels. Our banking correspondent services, being carried under a subsidiary, StarFin, continue to perform well. Through this arm, we were delighted to be a part of the direct benefit transfer (DBT) programme by the Indian government wherein, our venture facilitated transactions to the tune of Rs 350 crore to the marginalised section of the society on monthly basis.
Meanwhile, we also won multiple projects in India as well as from other governments globally this year. Some of our recent global wins are from the Republic of Estonia to provide e-residency digital IDs by the Estonian Police and Border Guard Board (PBGB) in Japan, Thailand, Singapore, Brazil and South African Republic; and the Embassy of Thailand in India. We also won the Embassy of Brazil in China to provide visa application processing across 15 centres in China; earlier to this, we were mandated by Brazil Embassy in Lebanon for visa processing. Also, we won the contract to process Portugal Visa Application in Russia from 22 locations and got accredited by Royal Canadian Mounted Police (RCMP) to run fingerprinting services for the Government of Canada. Alongside in India, we were mandated by the UP Government to provide government services with the help of a comprehensive digital platform.
All our recent projects have started to pick up with countries opening up their borders and shall continue to witness steady growth in this financial year.
3)To what extent have customers’ sentiments changed regarding international travelling and do you expect them to normalise and come back to pre-COVID levels?
Last year, people worldwide have been socially distancing themselves due to the pandemic. However, people are now willing to travel post-vaccination. According to a survey by American Express, 69 per cent of people in India are planning one big international trip. In fact, right before the second wave hit the nation, Indians were also seen engaging and in fact, paying in excess for revenge travel. Besides, the latest advancement of vaccination drive in India has brought back hopes amongst citizens. I am confident that the various initiatives undertaken by the government are going to be successful to win this battle against the virus.
Our projects in countries like Russia, China, Canada, Singapore, Malaysia, Morocco, UK, the USA, etc. have resumed operations. While the situation in India is indifferent, the world is coming back to normal. And since our business is diversified across almost 66 countries, our projects globally continue to pick up and show momentum.
About the change in customer sentiments, we have seen the trend that travellers are now ready to shell out extra bucks to minimise physical interaction. They prefer our premium/priority services like ‘premium lounge’ wherein, only one applicant is entertained at one point in time. Along with this, people are also opting for mobile biometric service, where the applicant prefers submitting the application at the comfort of their home/office; courier service instead of coming over to collect the passport.
4) What are your top three strategic objectives?
Our focus is to build robust tech-enabled processes with efficient execution and investments in technologies to utilise exciting possibilities related to digitisation, last-mile penetration and enhanced service experience. We continue to leverage competence and deepening presence with our existing client base by offering greater services thereby, increasing wallet share in the front-end & citizen, visa, consular, e-governance, attestation, biometric and e-visa vicinity.
Our top key objectives are:
To focus on diversification towards tech-enabled e-governance services in global as well as domestic market.
Establish dominant global presence at the back of our core tech strengths, to access international markets and target missions, which are already outsourcing the services.
To strengthen our relations with the existing customer base that will eventually help us to get more contracts in the vicinity of e-governance, visas, consular, e-visas, retail, etc.
5) What are your growth levers?
Our seamless progression including automation of processes, application submission, appointments, helplines, collection and remittance of fees on applicant’s behalf, biometric enrolment and a host of value-added services for the applicant’s convenience has definitely helped us to move ahead in our overall business.
Some of our growth levers are:
India and global opportunities in outsourcing of citizen services like Punjab & UP projects, which would enable us to grow our citizen services business to other states and countries, globally.
More governments to outsource consular, citizen, visa & identity management services, which is a moat for our global as well as domestic business.
Through strategic organic & inorganic growth.