In conversation with Shikhar Aggarwal, Joint Managing Director, BLS International Services Ltd

The investment we have made in putting our technology and base together along with a strong balance sheet and liquidity position keeps us hopeful, opines Shikhar Aggarwal, Joint Managing Director, BLS International Services Ltd.

With new variants of the virus being discovered routinely in various parts of the globe and restrictions being placed on international travel, what are the trends you are currently witnessing amidst your clientele? By when do you envision international travel making a comeback to pre-Covid levels?

International travel is likely to recover soon despite the progress being halted by the omicron variant. With aggressive vaccination and booster drives in all major countries, the travel business has been showing momentum. Even after the Omicron variant, the majority of our centres globally are going full, rather demand is surpassing the available appointments. While all the major countries have opened up borders with specified Covid norms. Although, I feel the situation will be much better by March 2022. About the industry reaching pre-Covid levels, with recent trends like ‘revenge travel’ and ‘VFR (Visiting Friends & Relatives)’ it should bounce back within a quarter of the situation becoming normal. 

To boost travel, few global tourism destinations like Spain, Italy and other countries are enticing the travellers with incentive schemes like reimbursement of airfare by 50 per cent, offering a free night of accommodation and other innovative schemes. Hence, travellers are leveraging these schemes and planning trips to grab the freebies. 

As a company, we are at the cusp of a growth trajectory with a visible rebound in our visa and consular business. We are seeing “revenge travel” taking place across the globe and the visa business showed signs of growth on a month-on-month basis from June 2021 onwards while our banking correspondent and e-governance business are the biggest beneficiaries of financial inclusion and digitization in the domestic market. 

What keeps us hopeful and confident is the investment we have made in putting our technology and base together along with a strong balance sheet and liquidity position, which differentiates us in the industry. We believe that digitalization will be the mantra in the post-Covid world and thus, we are focusing on leveraging our technology assets to tap emerging opportunities. Going forward, we are even more committed to leveraging our technology and operational excellence to deliver enhanced service and customer experience. 

Net profit of BLS International Services rose 101.10 per cent to Rs 27.47 crore in the Q2FY22 as against Rs 13.66 crore in Q2FY21. What factors have contributed the most to help you outperform?

We have registered the highest EBITDA of Rs 27.5 crore and EBITDA margin of 14.4 per cent in the last 7-8 quarters along with the highest Profit Before Tax (PBT) of Rs 28.5 crore in the last 11 quarters. Various factors helped us to significantly increase our net profit in Q2FY22 compared to Q2FY21. 

• After the second wave, economies slowly and steadily started opening up and there was "revenge travel" taking place across the globe. Our visa and consular business grew in lower double digits on a month-on-month basis with demand surpassing supply most of the time.
• We have also been able to rationalize our costs to a great extent and don’t expect many of the pre-Covid costs to come back into the system. With the help of technology and software, we have become more efficient and execute high volumes of visa & consular related work without extra manpower.
• E-governance and the banking correspondence business have outperformed in the last few quarters, thereby contributing to better revenues, margins and profitability in Q2FY22.

Can you throw some colour on the new projects BLS International Services has undertaken over 2021? How are you focusing on diversification towards e-governance and other value-added services?

This year, we won multiple projects in India as well as from other governments globally. The global wins include the Republic of the Philippines, which is set to provide e-passport renewal services, initially starting with Italy, Qatar & Malaysia. The list also includes the Embassy of Italy, which will process visas across 20 centres in Russia while the Embassy of India in Kuwait is set to provide consular, passport, and visa services. Apart from these, the Republic of Estonia also aims to provide e-residency digital IDs by the Estonian Police & Border Guard Board (PBGB) in Japan, Thailand, Singapore, Brazil & the South African Republic as well as the Embassy of Thailand in India. Earlier this year, we also won a contract from the Embassy of Brazil in China to provide visa application processing across 15 centres in China. Before that, we were mandated by Brazil Embassy in Lebanon for visa processing.  

This year, we also partnered with a Singapore-based company, Knowledge Catalyst to provide digital health certificates also known as ‘HealthCerts’, for passengers travelling to and from Singapore; and File Solutions Limited, a data and digital enrolment service company of Nigeria, to manage the identity management services for Nigerians in London, UK. 

Alongside in India, we were mandated by the UP government to provide citizen services with a comprehensive digital platform; and by the Rajasthan government for e-Mitra Kiosks in Jaipur, Alwar, Ajmer, Jodhpur and Nagaur. As part of these contracts, BLS enables a decentralized self-governance backbone to the administrative system through the PPP (Public-Private Partnership) model. We also partnered with e-commerce giants to provide assisted e-commerce services to the rural and semi-rural areas of the country and are quite optimistic about the potential in this area. 

With respect to the National Banking Correspondent (NBC) business, Starfin - we are now empanelled with 5 banks i.e. Bank of Baroda, Punjab National Bank, Central Bank of India, Uttarakhand Gramin Bank and India’s largest bank - SBI.

All our recent projects have started to pick up with countries opening up their borders and shall continue to witness steady growth in the next financial year. 

What is your earnings outlook for the upcoming quarters?

BLS International has a unique business model and the performance in Q2FY22 is a clear indication of the fact that not only is the visa and consular business improving, but we are also expecting a higher contribution in revenue from other businesses as well. We believe once the travel around the world starts completely, the incremental revenue from the visa business will propel the financial performance of the company. We are hopeful that in the coming quarters the company should achieve an all-time high profit and the margins will rebound sharply in the coming quarters on account of better performance from visa and consular service businesses. All of this is subject to the severity of rising Covid cases in the world and how long until everything is back to normal.