Investing in the stock market can bring big rewards if you choose the right stocks, but it also comes with risks if decisions aren’t made wisely. Shareholders of BLS International Services have seen great returns, as the company’s shares have surged significantly in recent years.
Two years ago, the stock was valued at ₹120 per share. Today, it trades at ₹384.50 per share, marking an impressive 220% gain. The performance is even more remarkable when looking back to July 2020, with the shares skyrocketing by 1850%. Between March 2022 and February 2024, the stock had a continuous rally, jumping by 700%.
On a yearly basis, the stock saw a 124% rise in 2021, followed by increases of 246% in 2022 and 93% in 2023. So far this year, it has gained an additional 20%.
BLS International Services, with a market value of ₹16,000 crore, is a global service provider that offers tech-enabled solutions, mainly focusing on government-related services like visas, passports, consular services, e-governance, attestation, biometrics, e-visas, and retail services. The company, founded in 2005, works with over 46 client governments, including diplomatic missions, embassies, and consulates, and operates more than 50,000 centers worldwide.
Strong Performance
The company showed strong performance in the June quarter. Revenue from operations grew by 28.5% year-over-year to ₹493 crore in Q1 FY25. This was largely driven by the visa and consular (VC) business, which saw a 36% year-over-year growth due to an 18% increase in both volumes and net revenue per application. However, the digital business reported slower revenue growth in Q1 FY25.
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) surged by 66.3% year-over-year to ₹133 crore, benefiting from the move to self-managed centers from partner-run ones in various locations within the VC business, along with a better service mix in the digital segment.
The EBITDA margin expanded by 615 basis points year-over-year to 27%, largely due to the high-margin VC business, which accounted for 91% of EBITDA, up from 89% year-over-year and 85% quarter-over-quarter. As a result, PAT (Profit After Tax) rose by 70% year-over-year to ₹114 crore, driven by strong operational performance.
The company handled over 3.5 crore transactions in the business correspondent segment, with a gross transaction value exceeding ₹20,000 crore in Q1 FY25. The digital business maintained more than 27,000 customer service points (CSP) and 1.1 lakh touchpoints.
In addition, the company signed a service provider agreement with Axis Bank and generated leads worth around ₹1,000 crore for private banks like HDFC Bank and Kotak Mahindra Bank in Q1 FY25, compared to ₹602 crore generated in FY24.
It also completed the acquisition of iDATA in Q1 FY25. iDATA generated revenue of around ₹246 crore and EBITDA of about ₹144 crore in 2023. This acquisition has enhanced BLS International’s operational scale and profitability in the VC services market.
Optimistic Outlook
Domestic brokerage firm Nuvama Professional Clients Group remains optimistic about BLS International. They noted that the company exceeded their expectations in the June quarter and highlighted that BLS International is the only listed Indian entity in global visa processing and G2C services outsourcing, operating on an asset- and capital-light model. This model ensures strong cash generation with minimal growth-related costs.
The firm expects new visa contracts and the expansion of digital services across India to boost business correspondent (BC) revenue and profitability. The company has a history of strategic acquisitions that have enhanced its offerings and facilitated market entry.
Despite already having a strong cash balance, the management plans to raise ₹2,000 crore through equity to fund further acquisitions and accelerate growth in the medium to long term.
Even though the company’s Q1 earnings were better than expected, the brokerage has kept its estimates for FY25 and FY26 unchanged. It projects a revenue/EPS (Earnings Per Share) CAGR (Compound Annual Growth Rate) of 30%–35% over FY24–26. Therefore, it retained its ‘buy’ rating with a target price of ₹518 per share.
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