BLS International Services Ltd Management Discussions

GLOBAL ECONOMY

Overview: The global economic landscape witnessed a slowdown, with growth declining from 3.5% in 2022 to an estimated 3.1% in 2023. Notably, Asia is expected to be the primary driver of global growth, despite challenges such as the ongoing recovery in China, sluggishness in the USA, heightened energy costs in Europe, and geopolitical tensions impacting consumer sentiment. Monetary policy tightening led to increased policy rates and interest rates for new loans.

Key metrics

Global trade in goods saw a substantial decrease of nearly USD 2 Trillion in 2023, while trade in services expanded by USD 500 Billion. The average cost of Brent crude oil decreased to USD 83 per barrel in 2023, down from USD 101 per barrel in 2022, due to shifting dynamics in crude oil markets.

Equity markets globally concluded 2023 positively, with major benchmarks experiencing double-digit returns, driven by factors like declining inflation, a weakened dollar index, reduced crude prices, and expectations of rate cuts by major central banks.

Regional growth (%)

World output: 3.1 (2023), 3.5 (2022)

Advanced economies: 1.7 (2023), 2.5 (2022)

Emerging and developing economies: 4.1 (2023), 3.8 (2022) (Source: UNCTAD, IMF).

Performance of major economies, 2023

United States: GDP growth at 2.5% (2023) compared to 1.9% (2022) China: GDP growth reached 5.2% (2023) compared to 3% (2022) United Kingdom: GDP growth recorded at 0.4% (2023) compared to 4.3% (2022) Japan: GDP growth remained unchanged at 1.9% (2023) Germany: GDP contracted by 0.3% (2023) compared to 1.8% growth (2022) (Source: PWC report, EY report, IMF data, OECD data, Livemint)

Outlook: Asia is poised to continue driving global growth in FY 2024-25, with anticipated gradual easing of inflationary pressures anticipated. Despite challenges, the global economy has demonstrated resilience amidst inflation and monetary tightening, expected to maintain growth levels similar to those in previous years. (Source: World Bank)

INDIAN ECONOMY

Overview: The Indian economy showcased robust growth, expanding by 7.8% in FY 2023-24 compared to 7.2% in FY 2022-23, securing the 5th position in the worlds GDP rankings for 2024. Key sectors like information technology, services, agriculture, and manufacturing fueled this growth, leveraging Indias domestic market, skilled labor force, and expanding middle class.

Key metrics

Real GDP in FY 2023-24 was estimated at Rs. 171.79 Lakh Crore, with a growth rate of 7.3%, while nominal GDP stood at Rs. 296.58 Lakh Crore. Indias foreign exchange reserves reached a record high of USD 645.6 Billion in March 2024, reflecting stability and surplus in the balance of payments. The credit quality of Indian companies remained strong between October 2023 and March 2024 following deleveraged Balance Sheets, sustained domestic demand and government-led capital expenditure. Rating upgrades continued to surpass rating downgrades in H2 FY24. UPI transactions in India posted a record 56 per cent rise in volume and 43% rise in value in FY 2023-24.

Exports of goods and services were expected to reach USD 900 Billion in FY 2023-24, with notable growth in merchandise and services exports. Indias stock market flourished, becoming the worlds fourth-largest with a market capitalization of USD 4 Trillion.

Outlook: India is projected to maintain its status as the fastest-growing major economy, driven by demand, moderate inflation, stable interest rates, and robust foreign reserves. The economy is expected to surpass USD 4 Trillion by FY 2024-25.

GLOBAL TRAVEL AND TOURISM INDUSTRY

Overview: A flourishing global economy typically stimulates increased travel and related expenditures, benefiting sectors such as aviation, accommodations, dining, and entertainment. Improved economic conditions lead to higher disposable incomes and heightened business activities, fostering greater demand for travel services.

The global tourism sector, comprising lodging, transportation, attractions, and dining, contributed approximately USD 7.7 Trillion to the worlds GDP in 2022. Post the pandemic-induced disruptions, the industry rebounded in 2023, driven by factors like improved connectivity and pent-up demand.

The tourism sector also plays a significant role in creating indirect employment opportunities, accounting for approximately 234 Million jobs or 8.7% of total global employment. This implies that one out of every twelve jobs worldwide is in tourism. Moreover, tourism represents around 12% of global exports. Current global market trends show increasing interest in various forms of tourism, including long-distance travel, visits to neighboring countries, rural and cultural tourism, wellness and health retreats, ecotourism, sports and adventure holidays, coastal tourism, and cruises.

Geographically, there has been a notable rise in the number of Asian tourists, particularly from China and East Asian nations. Additionally, the average age of international tourists is decreasing, with more young travelers seeking respite from demanding professional lives through travel.

The future growth of tourism is likely to be driven by ongoing global prosperity, increasing recognition of tourisms role in employment and economic development, improvements in infrastructure, targeted marketing and promotional efforts, air transport liberalization, enhanced intra-regional cooperation, and a rising number of Public-Private Partnerships (PPPs). Opportunities: The Global Passenger Load Factor (PLF) fluctuated from 2019 to 2023, reflecting the impact of the COVID-19 pandemic on the aviation industry. In 2019, the PLF was 82.4%, indicating strong passenger demand. However, it dropped to 64.8% in 2020 due to travel restrictions and reduced confidence. Despite a slight increase to 67.2% in 2021, uncertainties persisted. The PLF improved to 78.7% in 2022 as restrictions eased. By 2023, it reached 82.3%, nearing pre-pandemic levels, signaling recovery and increasing confidence in air travel.

Global air passenger market*

Particulars	2019	2020	2021	2022	2023
Revenue Passenger per Kilometre (RPK)	84,88,856	28,94,700	35,31,364	58,05,563	79,47,815
Active Seats per Kilometre (ASK)	1,03,06,201	44,67,130	52,55,006	73,76,827	96,57,127
Passenger Load Factor (PLF) *	82.4%	64.8%	67.2%	78.7%	82.3%

Source: International Air Transport Association (IATA)

Similarly, the PLF with respect to international passengers declined from 82% in 2019 to 62.8% in 2020 and to 58% in 2021 before witnessing an upward trend in 2022 to 78.5% and crossed pre-covid levels to 82.8% in 2023.

International air passenger market

Particulars	2019	2020	2021	2022	2023
Revenue Passenger per Kilometre (RPK)	52,61,950	12,83,916	12,89,178	32,57,752	46,12,977
Active Seats per Kilometre (ASK)	64,17,012	20,44,452	22,22,720	41,50,002	55,71,228
Passenger Load Factor (PLF)*	82.0%	62.8%	58.0%	78.5%	82.8%

Between 2017 and 2023, there were 8,151 aircraft deliveries, indicating steady growth in the aviation sector. Looking ahead, from 2024 to 2030, a total of 12,864 aircraft deliveries are expected, highlighting promising growth prospects for the industry. This increase reflects the growing demand for air travel and signifies opportunities for airlines to expand their fleets and meet the needs of passengers worldwide.

The increase in PLF coupled with the rising revenue passenger per kilometre and Active seats per kilometer reflects a growing demand for air travel worldwide. Airlines are increasingly ordering new aircraft to capture this demand, indicating optimism for the future of the industry. With the global economy recovering and travel restrictions easing, airlines have significant opportunities to expand their operations, open new routes, and attract more passengers. Global air passenger traffic is expected to witness 1.5 times jump from 2.1 Billion in 2023 to 3.2 Billion in 2030. Outlook: The global travel industry is expected to witness strong traction due to the growing global economy. As economies expand, individuals and businesses benefit from higher incomes and increased opportunities, leading to greater spending on leisure and business travel. This results in higher demand for flights, accommodations, dining, entertainment, and other travel-related services. Improved economic conditions often prompt investments in tourism infrastructure, making travel more accessible and appealing. Businesses engage in more international activities, boosting demand for business travel. Overall, a flourishing global economy creates a conducive environment for increased travel and higher expenditures in the travel and tourism sector.

While the outlook for the air passenger market is promising, there are still challenges to navigate, including fluctuating fuel prices, geopolitical uncertainties, and evolving consumer preferences. Additionally, sustainability concerns are becoming increasingly important, with airlines under pressure to reduce their carbon footprint and adopt more environmentally friendly practices.

VISA AND CONSULAR SERVICES INDUSTRY

Overview: The visa and consular outsourcing industry plays a vital role in facilitating visa applications and consular services for individuals and businesses. Third-party companies manage various aspects of the application process, enhancing efficiency and customer experience.

Visa services includes short-term business, work, study and tourism in some countries as well as other types of visas for applicants. In recent years, many governments have outsourced their visa processing to external partners. This has helped them to manage the increasing demand for visas in the age of booming international travel. Visa outsourcing also benefits travellers, reducing processing times and improving customer service.

Market insights: The global visa outsourcing services market is estimated to grow at a CAGR of 14% from USD 3.7 Billion to reach USD 8.3 Billion by 2028, driven by factors like increasing demand for visas and enhanced service offerings. Notably, over the last two decades, the industry has witnessed an increase in the outsourcing of visa services by many countries to third party visa processors. The industry has seen the share of outsourcing services increase from 22% in 2010 to 35% in 2021 which is expected to increase to 50% by 2025.

Major players include VFS Global, BLS International, TLScontact, CGI, and GDIT, with North America leading in market share. And if we look at the top 10 mostly travelled countries, they are France, Mexico, Spain, Turkey, Italy, the United States, Greece, Austria, Germany and the United Arab Emirates and these contribute over 26% of the global travellers. Outlook: Visa requirements serve multiple purposes, from security and economic management to health, diplomacy, and legal compliance. These multifaceted roles ensure that visas will likely remain a crucial part of international travel and immigration systems in the foreseeable future.

Business Correspondents (BC)

India being a developing nation with approximately 70% of the population staying in rural areas requires greater financial inclusion vision and implementation. To achieve banking outreach and extensive financial inclusion, the Reserve Bank of India has been taking several initiatives to achieve banking outreach and extensive financial inclusion. A significant step in this direction was the issue of RBI guidelines in January 2006 for engagement of Business Correspondents (BCs) by banks for providing banking and financial services. Since then, the regulatory framework for the BC model has been progressively honed to ensure that consumer protection is not compromised while facilitating enhanced outreach of banking services.

Business Correspondents (BCs) work on a commission-based model. The commission is paid as a certain percentage of the value transacted or a fixed fee per transaction depending on the agreement. Factors affecting the BC industry includes increasing outreach of BCs in rural areas, increasing volume and value of transactions through BCs, facilities to make various types of bill payments through BCs, etc.

In India, the BC industry witnessed a growth of 17% CAGR from FY 2017-18 to FY 2022-23 and is expected to grow at a CAGR of 19% from FY 2021-22 to FY 2024-25.

tracking progress through factors like branch and business correspondent (BC) numbers. BCs, agents offering banking services outside branches or ATMs, promote financial inclusion and job creation. The BC model, faster-growing than traditional branches, provides services like savings accounts, remittances, and subsidies.

The above charts depicts that the contribution from Basic Savings Bank Deposit Account (BSBDA) transaction expanded from 26% in FY 2015-16 to 49% in FY 2022-23. This is primarily due to Pradhan Mantri Jan-Dhan Yojana (PMJDY) and the increase in Direct Benefit Transfer (DBT) amounts and beneficiaries. Another major highlight is that the number of transactions through BCs witnessed a 8.5% CAGR growth, while the value of transactions grew 32% from FY 2015-16 to FY 2021-22. This signifies a strong demand from a rural segment of the country.

During FY 2023-24, an impressive 33 Million new accounts were added to the Pradhan Mantri Jan Dhan Yojana (PMJDY), bringing the total to 519.5 Million accounts. Cash deposits in PMJDY accounts reached a record high of Rs. 36,153 Crore, with an average deposit per account peaking at Rs. 4,524 Crore. Indias banking system includes public and private sector banks, foreign banks, regional rural banks, urban cooperative banks, and rural cooperative banks. The ATM infrastructure remained steady, with on-site ATMs, off-site ATMs, and cash recycling machines (CRMs). The proliferation of micro ATMs contributed to improved access to banking services across India.

Banks aim to enhance business correspondent models to expand operations and promote financial inclusion, utilizing correspondent banking partnerships for wider service accessibility.

Key growth drivers for Business Correspondent and e-governance would be rising Indias middle-class population, increasing digitization, the governments focus on providing e-governance services to every citizen of India and achieve greater financial inclusion in order to provide basic banking related services to citizens across the country.

Global e-governance overview

The e-governance market is experiencing significant growth, with projections indicating a surge from USD 18.68 Billion in 2023 to USD 50.36 Billion by 2032, reflecting a notable compound Annual Growth Rate (CAGR) of 4.57% during the 2023 to 2032 period. This expansion would be driven by increasing government initiatives aimed at digital transformation, spurred by heightened citizen demand for online services and facilitated by advancements in communication technologies.

Indian e-governance overview

In India, e-governance utilizes IT and communication for government activities, focusing on convenience, efficiency, and transparency. Initiatives like Digital India, National Portal, and Aadhaar demonstrate its importance, comprising interactions between the government (G2G, G2C, G2B, and G2E) to simplify governance, enhance transparency, and provide quick services. Challenges include computer literacy, internet accessibility, reduced human interaction, data theft risks, and potentially lax administration.

With 1.43 Billion people, India leads in real-time payments with 692 Million internet users. Strategic partnerships with the private sector have helped improve public services. Initiatives like the digital seva portal offer 28 Core services, emphasizing digital infrastructure, last-mile service delivery, and eliminating intermediaries. Outsourcing digital services accelerates e-service implementation, providing specialized assistance, especially in remote locations. The lifecycle approach in e-governance aims to deliver public services throughout citizens lives.

Department of Administrative Reforms & Public Grievances (DARPG) formulated the National e-Governance Service Delivery Assessment (NeSDA) in 2019 to boost the e-governance endeavors and drive digital government excellence.

A total of 56 mandatory services were assessed for every State and Union Territories and 27 services were assessed for Central Ministries.

As per the NeSDA report for States / UTs (March 2023), Departments across States / UTs provides 15,601 services. 12,561 out of this 15,601 services are provided online (i.e. 80.5% of the services are digitized across States / UTs).

Key trends shaping the market landscape

Shift towards cloud-based solutions: There is a notable trend towards cloud-based solutions driven by the need for scalability, flexibility, and cost efficiency.

Mobile-first approach: A mobile-first approach has emerged as crucial for enhancing citizen engagement and improving service delivery, with mobile apps playing a pivotal role.

Market segments: E-government platforms serve as the cornerstone for online service delivery and citizen engagement. Cloud-based solutions offer scalability and security advantages, while mobile apps help reach citizens on-the-go and deliver customized services. Data analytics continues to drive efficiency and personalization in governance processes. Cybersecurity measures are becoming increasingly critical to safeguard sensitive data and infrastructure.

Outsourcing for cost-effective solutions: Governments are turning to outsourcing for cost-effective solutions to address challenges such as limited resources and a shortage of qualified IT personnel. This trend aligns with broader themes of digital transformation, globalization, and citizen empowerment.

Rise in global digital identities: The rise in global digital identities, projected to exceed 6.5 Billion citizens by 2026, underscores the importance of data-centric e-governance strategies.

Role of private entities: Private entities are playing a significant role in supporting seamless government services and responding to citizens needs for prompt, convenient, and accessible services. Streamlining and privatization within e-governance remain vital to effectively meeting citizens expectations and bridging the gap between their desires and government experiences.

Assisted e-services

In some regions of India, e-commerce has become integral to daily life, with people using it to purchase everything from shampoo to mobile phones, electronics, and furniture. However, a significant portion of the population remains unexposed to this digital marketplace. This gap is primarily due to a lack of awareness and understanding of the benefits of e-commerce. Additional barriers in rural areas include poor internet connectivity, the absence of smart devices, and inefficient distribution channels. This lack of exposure hinders the understanding of online purchasing processes. In an assisted e-commerce model, a representative helps the local community by guiding them through the online shopping process, helping them select items within their budget, ordering these items through various websites, receiving the deliveries at a central location, and then distributing them to the customers in exchange for cash or other payment methods.

Outlook: Assisted e-services in India offer numerous opportunities for enhancing service delivery and improving access to various governmental and financial services, particularly in underserved areas. Some key opportunities include financial inclusion, government services, healthcare, education, agriculture, employment, digital payments, commerce and retail, and citizen services. By leveraging assisted e-services, India can significantly improve service delivery, promote inclusivity, and drive socio-economic development across diverse sectors.

About BLS International Services Limited

BLS International Services Limited is a leading global outsourcing and technology solutions company headquartered in New Delhi, India. The company specializes in providing visa, passport, consular, attestation, and citizen services to governments and diplomatic missions worldwide. With a strong presence in 66+ countries and providing services to 46+ client governments, BLS International has established itself as a trusted partner for governments seeking efficient and secure tech-enabled solutions for their citizen services. BLS International has successfully developed and enhanced the entire process system by implementing seamless information sharing, automated application and appointment systems in order to manage queues effectively, document collection from applicants, fee collection, biometric enrollment, and additional value-added services to enhance the applicants experience. Over the last few years, our technology-driven innovations have transformed the management of visa and passport application services. The company provides a comprehensive range of services aimed at securely handling visa applications and issuing visas and e-visas. BLS specializes in establishing dedicated visa application centers on behalf of diplomatic missions and has set up advanced, tailored visa application centers worldwide to ensure a pleasant applicant experience. Regarding the companys digital services business, the company, through its subsidiary BLS E-services Limited, provides (i) Business Correspondent (BC) services to various public sector and private banks in India, (ii) Assisted e-services; and (iii) E-governance services at grass root levels in India. BLS E-Services is a leading technology enabled digital service provider and through a robust network of over 100,000+ customer touch points and 1000+ stores, we provide access points for the delivery of essential public utility services, social welfare schemes, healthcare, financial, educational, agricultural and banking services for governments (G2C) and businesses (B2B) alike in addition to a host of B2C services to citizens in urban, semi-urban, rural and remote areas.

The companys strengths lie in its global presence, expertise in visa processing, strategic partnerships, technology integration, and customer satisfaction. Opportunities for BLS International include expansion into new markets, diversification of services, and digital transformation initiatives. However, the company also faces challenges such as competitive pressure, geopolitical risks, technological disruptions, and economic uncertainty.

Strengths

Global presence: BLS International operates in multiple countries, providing visa outsourcing services through a network of offices and service centers. This global presence gives the company a wide reach and access to diverse markets.

Expertise in visa processing: The Company has established expertise in visa processing and related services, including document verification, biometric enrollment, and customer support. This expertise allows BLS International to offer efficient and reliable services to clients.

Strategic partnerships: BLS International has formed strategic partnerships with government agencies, diplomatic missions, and other stakeholders involved in visa and passport processing. These partnerships enhance the companys credibility and strengthen its position in the market.

Technology integration: BLS International invests in technology solutions to streamline visa processing and improve the efficiency of its operations. This technological integration allows the company to offer innovative services and stay ahead of competitors.

Customer satisfaction: The company prioritizes customer satisfaction by providing timely and responsive services, ensuring accuracy in processing, and offering convenient access to application centers. Positive customer experiences contribute to the companys reputation and customer loyalty.

Opportunities

Expansion into new markets: BLS International endeavours to explore opportunities to expand its operations into new geographic markets where there is growing demand for visa outsourcing services. This could involve targeting emerging economies or regions with increasing travel and immigration trends.

Diversification of Services: The company can diversify its service portfolio beyond visa processing to include related services such as travel insurance, consular support, or value-added services for travelers. Diversification could help BLS International capture additional revenue streams and mitigate risks associated with dependency on visa processing.

Digital transformation: Embracing digital transformation initiatives, such as online visa application platforms, mobile applications, and biometric authentication technologies, can enhance the efficiency and convenience of BLS Internationals services. Digital initiatives could attract tech-savvy customers and improve overall service delivery.

Threats

Competitive pressure: The visa outsourcing industry is competitive, with multiple players vying for contracts and market share. Intense competition could lead to price wars, erosion of margins, and challenges in retaining clients.

Geopolitical risks: Geopolitical tensions, diplomatic disputes, or changes in immigration policies in various countries can impact the demand for visa outsourcing services and disrupt BLS Internationals operations in affected regions.

Technological disruptions: Rapid advancements in technology, such as automation, artificial intelligence, or blockchain, could disrupt traditional visa processing models and pose a threat to BLS Internationals business model if the company fails to adapt to technological changes.

Economic uncertainty: Economic downturns, currency fluctuations, or geopolitical events like pandemics can affect travel patterns and discretionary spending on visas, potentially reducing demand for BLS Internationals services and impacting its financial performance.

BLS growth strategy

BLS has charted out a long term growth strategy for itself and several strategic initiatives have been identified to drive the revenue growth and profitability. First, our volume-driven business model is set to capitalize on operating leverage, boosting revenue and margins as volumes increase. Moving away from the partner model will enhance both revenue and profitability, ensuring greater control and operational efficiency. Additionally, by tailoring client experience services to regional needs, we will enhance satisfaction and loyalty, fostering repeat business and revenue growth. The expansion into long-term visa processing contracts presents a significant revenue opportunity, diversifying our service portfolio. Furthermore, with travel from China opening up and anticipated increased volumes from Russia, we expect to capture additional revenue streams and strengthen our market presence. Our expansion into new geographies, along with repeat business and new client countries, will drive sustained revenue growth and margin expansion. In addition, we are keenly looking at inorganic growth, such as strategic acquisitions and partnerships, to accelerate our market expansion and diversify our service offerings.

Financial performance

For FY 2023-24, the companys revenue from operations stood at Rs. 1,676.8 Crores, up by 10.6%, compared to Rs. 1,516.2 Crores in FY 2022-23. Operating EBITDA for the year was Rs. 345.7 Crores compared to Rs. 221.0 Crores, a growth of 56.4%. EBITDA margin expanded by 600 bps from 14.6% in FY 2022-23 to 20.6% in FY 2023-24. This is attributable to strategic initiatives, including the renewal of contracts, the addition of new agreements, favourable business mix and structural modifications in the business model from a partner model to now managing its own operations.

PBT before exceptional items in FY 2023-24 recorded a robust growth of 57.8%, at Rs. 352.1 Crores, compared to Rs. 223.1 Crores in FY23. Profit after tax stood at Rs. 325.6 Crores in FY 2023-24 as against Rs. 204.3 Crores in FY 2022-23, a growth of 59.4%.

Rs. Crore	FY 2022-23	FY 2023-24	YoY Change (%)
Revenue from operations	1,516.2	1,676.8	10.6%
Operating EBITDA	221.0	345.7	56.4%
Operating EBITDA margin	14.6%	20.6%	600 bps
PBT	223.1	352.1	57.8%
PAT	204.3	325.6	59.4%
PAT margin	13.5%	19.4%	595 bps

Visa and consular business: For FY 2023-2024, revenue in the visa and consular business increased by 8.1% YoY to Rs. 1,361.8 Crores contributing ~81% to the consolidated revenue, driven by growth in application volumes as well as revenue per application. The visa & consular business generated EBITDA of Rs. 300.5 Crores in FY 2023-24 compared to Rs. 186.6 Crores generated in FY 2022-23. The EBITDA margin expanded to 22.1% in FY 2023-24 up sharply by 726 bps YoY from 14.8% reported in FY 2022-23.

Visa & consular business

Rs. Crore	FY 2022-23	FY 2023-24	YoY Change (%)
Revenue	1,259.9	1,361.8	8.1%
EBITDA	186.6	300.5	61.0%
EBITDA margin	14.8%	22.1%	726 bps

Key highlights of visa and consular business

In January 2024, the company signed a definitive share purchase agreement to acquire a 100% stake in iDATA, a Turkey-based visa and consular service provider managing over 37 visa application centres (VAC) across 15+ countries which is expected to significantly extend BLSs reach across additional geographies significantly. The said acquisition was consummated July 2024. The total consideration paid for the acqusition was Rs. 720 Crores IiDATA achieved Revenues of ~Rs. 246 Crores and an EBITDA of ~Rs. 144 Crores in CY2023, as per its audited consolidated financials. During the year, BLS secured the renewal of a global contract from Spain and a contract for India operations in Canada with the inclusion of additional services to enhance our offerings The Company also secured a global contract from Slovakia and Visa outsourcing contracts from Germany, Italy, Poland, Thailand, Malaysia, Hungary, Czech Republic, and Portugal The Company introduced a new appointment system, featuring a state-of-the-art facial recognition system to increase efficiency and security across its network

BLS introduced a dedicated mobile app for Italy in order to enhance the accessibility and convenience for its customers The Company also integrated a chatbot to enhance its customer service capabilities, offering real-time assistance and support A new website platform was launched to provide a seamless and user-friendly online experience. Digital business: Revenue from digital business grew by 22.9% YoY to Rs. 315.0 Crores in FY 2023-24 from Rs. 256.3 Crores in FY 2022-23. The EBITDA stood at Rs. 45.1 Crores as against Rs. 34.4 Crores in FY 2022-23. EBITDA margin expanded by 90 bps from 13.4% in FY 2022-23 to 14.3% in FY 2023-24.

Digital services

Rs. Crore	FY 2022-23	FY 2023-24	YoY Change (%)
Revenue	258.4	333.6	22.9%
EBITDA	34.4	45.1	31.3%
EBITDA Margin	13.4%	14.3%	90 bps

Key highlights of digital business

In February 2024, the company successfully completed its listing on BSE and NSE, with a ~ Rs. 300 Crores IPO. The net proceeds from the IPO will be deployed to strengthen the technology infrastructure, consolidate the existing platform and provide funding for setting up BLS Stores and also for inorganic opportunities.

During the year, BLS commenced door-step-banking services for the elderly population across 25 States / Union Territories The Company signed business facilitation agreements with three private banks - HDFC, Kotak and Karur Vysya Bank for providing various banking services through a network of BCs. Business correspondent RFP wins with Indian Overseas Bank, Indian Bank, Baroda Gujarat Gramin Bank and Baroda Rajasthan Kshetriya Gramin Bank Penetrating in the rural region through various initiatives including CSP+ project covering 200+ gram panchayats in Orrisa, Ayushman Bharat Quality Check and initiation of Aadhaar demographic update service in Karnataka Expansion of assisted e-services with Hospicash & Wellness drive with over 22,000 customer enrolments Launch of BLS Store mobile application Tie up with India Post Payments Bank (IPPB) through the Directorate of Electronic Delivery of Citizen Services (EDCS), e-Governance Department of Personnel and Administrative Reforms (DPAR), Govt of Karnataka (GoK)

Significant changes in key financial ratios

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, details of significant changes in key financial ratios and any changes in the Return on Net worth of the Company including explanations thereof are given below:

Ratios	As at March 31, 2023	As at March 31, 2024	Reason for variance
Current ratio	5.68	7.70	Increase in current liability
Debt to equity ratio	0.01	0.03	Increase in lease liabilities and equity
Debt service coverage ratio	1.68	27.29	Increase in interest and lease payments
Return on equity ratio	29.76%	32.39%	Increase in profit
Trade receivables turnover ratio	55.22	45.86	Increase in revenue
Trade payable turnover ratio	43.1	31.68	Decline in cost of services
Net capital turnover ratio	6.46	3.46	Increased revenue due to higher level of operations
Net profit ratio	13.47%	19.42%	Increased revenue due to higher level of operations
Return on capital employed	27.91%	28.70%	Increase in profit and capital employeed
Return on investment	0.03	0.05	Increase in Investments
Inventory turnover ratio	-	896.41	Due to increase in inventory and reduction of cost of services

Human resources

BLS International places significant emphasis on its workforce, considering them essential for the Companys foundation. The organization prioritizes employee development and growth through a dedicated human resource team. Regular engagement activities and skill enhancement initiatives aim to boost organizational efficiency. BLS International is committed to nurturing talent, building capacities, fostering innovation, and cultivating a culture of efficiency and productivity. As of March 31, 2024, the Company employs over 357 individuals.

Training

BLS International ensures its staff members are well-versed in their job responsibilities by offering thorough training exercises and manuals through visa service centers. This dual-level system guarantees efficiency, competence, and seamless customer service. The Companys training staff plays a crucial role in onboarding new employees, providing them with essential skills to improve customer satisfaction and enhance productivity at the respective visa service centers.

Personnel

BLS International enhances staff competency at visa service centers by recruiting locally, starting with visa service center managers. The Company emphasizes customer service, recognizing that the technical aspects of visa processing require minimal local technical expertise. BLS International adopts a polycentric staffing approach for global operations, prioritizing hiring local managers to fill key positions. This approach eliminates the need for extensive staff assimilation, fostering cultural empathy and flexibility for seamless adaptation to the local environment. Utilising local managers enhances the productivity of visa service centers, providing comfort to both staff and applicants. It also facilitates the onboarding process for new personnel by leveraging the awareness of local responsibilities.

Internal control systems and their adequacy

The business that the Company is engaged in requires a robust framework of control systems that ensure operational consistency and informational security. The Company has implemented a series of checks and controls to ensure the assets and interests under its care are protected and that all financial data reported by it are accurate and reliable. The highly-sensitive nature of the business places emphasis on security and the Company has invested in robust data security tools and a state-of-the-art monitoring system. BLS Internationals global operations are certified with ISO 9001:2008 for quality management and ISO 27001:2005 for information security. The framework is periodically reviewed to ensure that the audit systems, policies, procedures, and financial controls are adequate and efficient. A committee reviews audit findings on a regular basis to ensure effective compliance, control, and risk mitigation.

Risk Management

Risk management is integral to BLSs corporate strategy and essential for realizing our long-term objectives. Our success relies on seizing opportunities stemming from our operations and market dynamics. We employ an integrated approach to risk management, placing risk and opportunity assessment at the forefront of the Boards agenda. Guided by principles of consistent, competitive, profitable, and responsible growth principles, our risk appetite is well-defined. Decisions concerning visa processing, B2B, and B2C business development prioritize agility and adaptability in response to evolving business landscapes. Aligned with our code of conduct, our actions uphold the highest standards of ethics and integrity. By integrating risk management into decision-making, we proactively address potential risks, fostering trust among stakeholders—clients, employees, shareholders, and the wider community. This approach empowers us to pursue growth objectives with confidence and success.

Risk Management Framework

As e-business and modern trade flourish, BLS seizes the opportunity for expansion by enhancing its e-commerce and B2C citizen services capabilities. The digitisation of purchasing behaviors necessitates the Companys adaptation to evolving customer needs.

Operational efficiency and effectiveness are paramount for BLS, guiding its approach to risk management. The Company ensures reasonable assurance of asset safeguarding, risk assessment, mitigation, and transparent information disclosure. Oversight of the risk management plan falls under the purview of the risk management committee, addressing risks associated with visa services and digital platforms. Emphasising liquidity risk management, BLS maintains adequate liquidity to meet financial obligations promptly. Cash flow generation from operations supports this objective, facilitating the fulfillment of financial commitments, including lease liabilities. BLS remains vigilant in identifying and managing key risks relevant to its business, recognising the potential emergence of new risks in the dynamic business environment. The Company prioritises material risks and continually monitors and evaluates risk management efforts in response to the rapidly evolving landscape, macroeconomic factors, geopolitical shifts, and system vulnerabilities. Commitment to robust risk management is foundational to BLSs long-term success. By proactively identifying and addressing pertinent risks, the Company safeguards its assets, nurtures stakeholder trust, and delivers value to its customers.

Principal risks and aitigation strategies

Currency Volatility Risk: Fluctuations in currency values can lead to transaction and translation risks, particularly if the Indian rupee strengthens against major currencies. This may affect reported revenue, profitability, and result in collection losses.

Mitigation: The Company follows a currency hedging policy aligned with market best practices to reduce the impact of exchange rate fluctuations on receivables, forecasted revenue, and other current assets and liabilities. The hedging strategy is regularly reviewed and adjusted as needed. Additionally, the Companys operations in various countries benefit from a natural hedge against foreign currency exposure, as their revenues and direct expenses are in the same local currency. Any surplus funds are consolidated in dollars or equivalent currencies pegged to the US dollar IT availability risk: The risk of potential disruption to critical business operations arises from issues with IT systems, including hardware or software failures, cyber-attacks, and security breaches.

Mitigation: BLS implements comprehensive security measures to protect its environment against external threats. These controls include conducting various levels of Vulnerability Assessments and Penetration Tests (VAPTs) internally and by external auditors, ensuring two factor authentication (2FA) for email security, and regularly reviewing Antivirus Reports. Backend security updates and patches are consistently applied, and all security policies and procedures are integrated into the Quality Management System (QMS). Additionally, G-suite is utilized for thorough monitoring and log maintenance of email communications. BLS recently attained CMMI ML5 V2 Services and development certification following a rigorous 9-month audit by MQAS, a third party Auditor, valid until April 4, 2026. In further bolstering security, WAF (Web Application Firewall) and ELB (Elastic Load Balancer) solutions were implemented on AWS, enhancing the appointment system. AWS conducted a security assessment of the BLS Cloud environment in January 2024, further ensuring robust security measures are in place.

Employee turnover and retention risk: Higher attrition rates lead to increased costs for onboarding and pose risks to retaining existing talent.

Mitigation: The Company has instituted a reward and recognition program to maintain employee motivation while conducting exit interviews and ensuring completion of exit forms. Regular training and development initiatives are undertaken to enhance employee skills, with a focus on retention. The employee stock ownership plan has been implemented in the past two years. Automation of attendance and payroll processes has been achieved through the ADP Payroll and Attendance module, while the implementation phase of the comprehensive HRMS software by Texla Culture is underway. Salary offerings are regularly benchmarked against market standards to ensure competitiveness.

CAUTIONARY STATEMENT

This statement made in this section describes the Companys objectives, projections, expectation and estimations which may be ‘forward-looking statements within the meaning of applicable securities laws and regulations.