Congratulations for the good set of numbers. So, my question was regarding visa segment of our business. So, in Visa segment how much we are going to grow in the future, like we said, we are going to grow 20% year over year and for nine months it is actually 11% growth nine months over nine months. So, it is slightly slowing down. So, what we must expect going forward without the acquisition we had iDATA and with the acquisition how much we expect in visa segment growth?

See if you see from a profitability point of view, you know from a PAT level we have grown more than 90% if you compare the same quarter last year, even if you see that from EBITDA level you know we have grown more than 33%. So, definitely there is a major growth. Regarding revenue, you know also we grew there was some seasonality in the business, some contingent open up this quarter that is why there was a little drop in the volumes. But still if you see the revenue we have achieved is similar. So, that is why there is an increase in the revenue that's actually and whatever numbers we have achieved we wish to maintain that. If you have seen in the last 3-4 years we have given more than 50% CAGR growth, and next year also coming years our objective is obviously to grow the company. We cannot give you any firm numbers or percentages where target to grow, but definitely we have aggressive growth internally set within the company.

Sir, my next question was regarding our digital service segment. So, on the margin front, can we further see the margin improvement in digital service segment going forward?

See the margins that we have achieved, obviously this is a volume driven business spread across the length and breadth of the country where we have 4 lakh people coming into our centers every day. Margin is little less than the visa business around 14.5% margin, whereas in our visa business we are doing upwards of 20% margin. Definitely our even the margin for visa business was less, it grew with time. So, definitely our objective and agenda is always to grow the margin in whatever business we get into and that will be the same objective even in E-services.

Sir, what is our thought process behind the acquiring the iDATA and how is the margin profile iDATA will have and can we expect similar margin profile in that acquisition also once we fully accommodate the company in our system.

See first of all, it took us 15 years to acquire such a big company. The money that we have generated is our hard-earned money. First we invested in Starfin then Zero Mass and now this €50 million, it translates 450 crores acquisition. We expect the money to be recovered within five to six years. This is a niche player based in certain geography of the world wherein they are operating only for Germany, Italy , Czech Republic also from many year, 2006 they have been in business. Definitely margins in this company is little higher than BLS International because it is a niche player working in certain geographies only with certain governments at higher service charges than us. So, that was also the objective of buying this company to learn from them and obviously adding a new client base. In this geography it gives us we can use economies of scale, combine our offices, lead to further growth, reduction of our expenses, we get qualified for more tenders. So, definitely there are multiple advantages. That is all added advantages other than the fact that we will recover our money within five to six years, and these are all extra advantages that we will get.

Okay sir. Best of luck from my side for your future endeavors. Thank you.

Thank you. The next question is from the line of Ravi Naredi from Naredi Investments. Please go ahead.

First of all Nikhil ji and Shikharji congratulations to you and your team along with us for good listing of BLS E-services, because you have given the quota for shareholder of BLS and we get the allotment and sir 100% you acquired fully this visa company, so how much net profit in last calendar year 2023?

So, see, we have signed a definitive agreement. Certain CPs are still to be done and after getting the approvals, we will be able to complete the buy out, the CY22 audited numbers, they have a calendar year was about 20 million revenue and had EBITDA of €10.2 million. This is all in Euros.

Very nice, very nice and our quarter three top line revenue could not grow any reason?

I think we just answered this question previously. We just answered this question.

OK, so I will listen in the system and this digital services, it will stand with us or it will transfer to BLS E-services.

No BLS E-services, which is the subsidiary of BLS International, will continue to remain a subsidiary of BLS International and all the revenue, profitability will get consolidated into BLS International. But definitely the E-service arm will handle all the regional service business everything.

Thank you, Sir. Our next question is from the line of Avnish Khara from Investec. Please go ahead.

So, I just have two questions. The first one is on the visa services. I just wanted to understand whether the quarter-on-quarter increase is primarily, is it led by volumes or do you also see some kind of a price jump over there and secondly on the digital services, it's quarter on quarter, it is falling a little bit. So, maybe you could throw some light over there as well on what exactly happened?

So, I think on the visa service front, definitely, there has been a good growth in the revenue mix, the revenue mix has changed. We have definitely gotten some additional service charges, some of our service charges have also increased. If you see in the last year even the Spanish contract that we won or the new contracts for Germany, Italy, whatever we have won is at higher service charges and definitely there has been a good increase in different additional services like biometric, mobile biometric, etc. So, that is why also the profitability has increased and we expect to maintain that. Regarding digital services, I think from quarter 2 to quarter 3 there could be a minute change, but going forward we see good growth coming in.

Thank you. The next question is from the line of Omkar Kamtekar from Bonanza Portfolio. Please go ahead.

So, just a clarification to understand if the thought process is right as you said the iDATA acquisition that you have done - the entity is a niche player and it has a higher margins that's what BLS has. So, I think by what time you will be able to complete the acquisition because if it is a higher margin business, once that becomes incorporated in the numbers of BLS, the margin from the visa services should increase and if you are saying that the visa margin we are currently at 20, they could jump higher. So, would that be a material jump or a normal jump?

So, as I explained in the earlier question that iDATA has a much better EBITDA margin percentages compared to us because they are in niche market and the most lucrative market in which they work. So, obviously once we acquire our margins will go up overall and we see value coming from synergies of operations and we both have offices in more than five countries which we are looking at how to synergize those operations and improve the margin further in the consolidated financials. So, those are the potential EBITDA improvements which we are looking at.

Understood sir, but would the margins jump materially higher or would be it incremental marginal gain? So, would it be say for example if the margin is currently 20%. Would it go like 25-26-27 percent would be like 1 or 2% higher? It's just that would it be a material jump or a normal jump?

See, actually we cannot give any substantial numbers right now, because we are also not aware, but as you have seen in the past BLS international EBITDA margins have jumped from 15% to 20%. Now we are up to 20% and our endeavor is definitely to grow the margins always even with this acquisition and other than this acquisition also our endeavor is to grow the margins. So, definitely, we will be focusing on that, but we do not have any visibility on exact numbers.

And final question is with respect to the length of the contracts that you also have with respect to your awards that you get for visa and other processing and what iDATA has, do they have the similar length of contracts or do they have a higher or a shorter length of contracts and what is our length of contracts currently?

If you are following on the history of the company, maybe if you have seen that we have renewed our major contracts recently. We recently won a contract again with the Indian Embassy in Canada. Last year, we won again the Spanish global contract at a higher service charge. So, every government has different topographies. Germany typically works on a 7 year period even the new contract that we work with German government in USA is for seven years. Accordingly, all the contracts with this company also are there for the next few years and whenever they come up for bidding, then there will be a tender.

Thank you. Our next question is from the line of Aniruddha Thackeray who's an investor. Please go ahead.

I have 2 questions. Can we expect this to happen in FY 2023-2024, the iDATA complete acquisition; also is there any probability or chance with our synergies to have a new business of forex exchanges for the customer?

Sorry, I understood your first question. That answer is yes, you can expect this transaction to close soon after the approval. I did not understand your second question. Can you please repeat?

What I am trying to understand is that we are into visa services, and we are providing a lot of digital services. So, in case can we have a new business line for the exchange of currencies like can we make available the currencies to our offices, Forex exchanges.

See, we are not averse to any value addition that can come to our existing customer base. So, you know in some countries we have tie up already with certain banks wherein we are offering Forex card services at our centers and already this is happening. So, you know we don't want to invest in any new line of business wherein we want to utilize the customer base that we have. So, definitely we are very open or any business that can lead to incremental revenue from our existing customer base.

If you could reiterate, I have noticed recently the revenue growth was not significant so if you could highlight or give a color on the reason for the same.

Certain geographies that had not fully opened up or there was some seasonality in certain geographies. That is why volume was a little less compared to a similar quarter last year, but in fact our revenue has increased because our revenue has gone up from the existing applications that we are getting and going forward also we see the volumes going up. So, the volume should grow more. So, that is why there should be a further increase in revenue.

Understood and given the recent IPO that we had if you could elaborate on like how much funding was raised or where are we going to use that fund?

We can reiterate that, but we have also explained this a lot of times in the last 2 weeks to lot of investor interviews, but I can tell you that see we have raised around 300 odd crores. Funding will primarily used for four verticals which is growing of all the three verticals of our banking correspondent, our E-governance and assisted E-services and we are going to spend the money on strengthening our existing technology infrastructure, to develop new capabilities, invest in inorganic growth, opening of different kind of BLS stores within our network. So, couple of things that we have already mentioned in our RHP also and we have reiterated in our responses and interviews that we did in the last one / week 10 days.

Understood, Sir. And we had our subsidiary in the US. So, correct me if I am wrong, we have recently stepped down that subsidiary which were in the US. So, if you could tell me what the reasons behind that were and how do we plan to work on our growth prospects given in the US.

See, we have a presence in the US currently. We have created this company with $200 of equity more from the operations point of view, nothing else. So, it is just to streamline our operations in the US.

Thank you. The next question is from the line of Omkar Kamtekar from Bonanza Portfolio. Please go ahead.

The question is with respect to the gross margins. So, in the nine months we can see that there is a good jump in the gross margins go up close to 42% on a rounded basis. So, my question was with respect to what it is attributed to, approximately 10% jump in the gross margin. What is the breakup of this jump? How much is it with respect to increasing prices and what is the breakdown of it?

So, it's a mix of all what we just talked about. There have been new contracts where the revenue per application is higher. We have added new value added services and they all are higher margin businesses, which is improving our gross margin over the years. You can see that changing over the last year, quarter on quarter. The 5% overall EBITDA margins have been improved and we are now maintaining those.

Understood and the cash on the books that is shown in the presentation is approximately 750 odd crores. So, once the acquisition of iDATA is complete, that would go down, so that would be the correct understanding?

Yeah, that is right. But we are generating around 80 crores a quarter also. So, that will also go on adding to the cash.

Understood and finally, one question with respect to the E-services business. So, from what I recollect from one of the previous con-calls, you had said that we were experimenting and exploring with respect to last mile cash delivery system, cash delivery in the E-services business. What is the status of that and are we seeing any traction with respect to that?

So, we went into an agreement with the public sector banks alliance where there are 12 public sector banks that have given us nearly 58% of the transactions across India whereby in the last mile we have started doing various services, to the residents at their at their homes, for example picking up cash or giving them cash and even any kind of checkbooks that they want, they want bank accounts to be opened. We have already started many of these services in the last three months.

Understood. So, this would fall under the bank correspondence services or would it be different from the existing multiples?

It's separate contract, but within the BLS E-services.

No, but would it fall under the bank correspondence sub segment or will it be a separate head?

No it's separate, it will be in the same segment, but it's a separate agreement.

OK, understood and are we seeing traction or it is still in its nascent stage or are we seeing ramping up very quickly?

It's in its nascent stage, but the banks expected to be ramped up very rapidly over the next couple of months.

It would be a contributor. We will have to see how significant it is over time.

Thank you. Our next question is from the line of Mohit Doshi, who is an investor. Please go ahead.

Good afternoon, sir and so just two questions and the first one being a tech enabled service provider, So, what is our budget on R&D for innovation.

Are you talking about BLS International?

Yes, Sir.

The budget for R&D, I think what we have been spending is 20 odd crores every year, and definitely now with the new things in place and not no new kind of business that we are targeting in visa consular services across the world, we are going to maybe have a little bit more investment going forward in the technology space as our revenue and profits increase.

So, what would be an approximate scale up in this if you could provide a number.

No it is not defined the percentage as and when we get new contracts accordingly we have to invest in technology for each contract some different kind of technology. So, probably that, but I think it will be utilized from the internal accruals of the company.

And sir in the future, if one wants to assess the company I mean measure the company success in any particular indicator or something that we should look out for?

I think EBITDA and PAT are the indicator that we internally look at and definitely sustain growth that is what we are looking at.

Thank you. The next question is from the line of Supan Parekh, who is an investor. Please go ahead.

I just wanted to know about way forward for the investor as well as for the stakeholders to monitor the success of the BLS going forward. Like, what are the main things that the indicators they should look upon?

See, you should look at the history of BLS last 3-4 years how we have grown as a company and this maybe definitely next few years the company that we have acquired, iDATA, the revenue profitability that is generated in that company will get consolidated into BLS. We see growth coming in from that area, entering into new geographies. So, I would say that definitely we as a company have now become a little matured in terms of our entry into different geographies. Now we understand how to aggressively grow the company even further. So, definitely you know there could be good growth coming in the next few years.

Okay. I wanted to ask about the current visa volumes per annum or quarter like what are the current volumes?

We have not disclosed that number properly because we are working in multiple territories and multiple countries or different governments. So, I think we have to get back to you on that.

Okay. Sir have you lost any contacts in the last few months?

No, we have in fact won new contracts.

OK, so I also wanted to ask the follow up question for the volumes regarding what is the volumes in China and Russia as well like what is the situation in Russia and China?

20% of our global volume, the volume that we are generating, any contract that we do 20% of used to come from Russia and China. China is starting to look at coming back now. Russia still has not started to come back.

Okay and the last question I would want to ask is like any short term or road map for BLS E- services post IPO?

We have already announced our road map, the money that we will be utilizing for it is all growth capital. You know this is all fresh issue of equity, money has come into the company and we will be our main objective will be whatever we have mentioned in RHP we want to we want to follow that, and our main objective will be to implement that.

Thank you. The next question is from the line of Omkar Kamtekar from Bonanza Portfolio. Please go ahead.

Thank you. Could you share the free cash flow generated for the nine months, if it is available.

You can check. we have given the cash as on 31st March as well as now I don't have the figure with me, but it was about I believe around Rs. 550 cr as on 31st March and now it is about Rs. 750 cr.

Free cash flows, not the cash, free cash flow.

Yes, free cash flow.

So, in our case, if you add the depreciation and the tax, you'll get the free cash flow from the business. We have generated around 200 crores in the nine months, free cash.

Understood. Thank you and with respect to CAPEX, what is the steady state CAPEX that we would require? I know it would be dependent more upon how many contracts do we get and where are the offices that are being opened in various regions but an approximate steady state CAPEX that we generally do on an ongoing basis so that the operations are running?

Sure. we have a normal CAPEX in the range of around Rs. 15 crores every year and additional comes from the new contracts which we win and its depends how much we need to invest in those new contracts, but the normal is about Rs. 15 cr.

15 crores, so 15 crores is on average it could happen depending on the contracts.

Anything addition will be on account of new contracts.

And all this is generally funded by us only or for example the counterparty, the government is also fixing a bit or is it fully funded by us?

No, it is done by us only. No government supports on the CAPEX.

Understood and can we share what is the approximate market share if we can disclose that what is the market share BLS has in the visa services business or domestically and globally or otherwise?

I think there is no authenticated source available to give that.

Okay, no issues. If the investor relation teams could share the number with respect to the volumes, would that be so I would separately ask them offline this question.

Yeah, we can discuss offline on that.

The next question is from the line of Ravi Naredi from Naredi Investments. Please go ahead.

Yeah, this higher margin we have get in this nine months will this margin stay for future years also, future quarter?

Yes. I am shareholder since last 10 years. So, I am minutely studying everything and last for this digital services that is BLS E-services concall you will do separately?

Yeah, we will start doing that from next quarter.

Thank you. As there are no further questions. I would now hand the conference over to Mr. Shikhar Aggarwal from BLS International Services Limited for closing comments.

Thank you everyone for taking time to participate in our Q3 and 9M FY24 Earnings Call. In case of any further queries, you may get in touch with Gaurav Chugh, our Head of Investor Relations or Adfactors PR. We look forward to interacting with you again next quarter. Thank you.

Thank you. On behalf of BLS International Services that concludes this conference. Thank you for joining us and you may now disconnect your lines.