Thank you very much. We will now begin with the question -and-answer session. The first question is from the line of Ravi Naredi from Naredi Investments.

Fantastic result you have posted for FY24. Sir, iDATA, you mentioned by June '24, we complete acquisition. Can you tell top line, bottom line, our margin of iDATA for CY23 or FY24?

So see, iDATA, the last audited balance sheet for CY22, they had a top line of around EUR 20 million and EUR 10.5 million EBITDA.

For CY22.

Okay. So after acquiring this company June 30, with complete formality, we are seeing any top line growth in FY25?

Yes, this revenue will get added to our existing revenue. Whatever is our existing business, this will add to that, and the existing revenues are also growing at around 15% every year.

15%. Sir, any modification in the business will happen due to iDATA, so many offices of our other countries will merge with this iDATA in future.

Yes, the whole advantage is that we will realign our offices with their offices. They are present, in more t han 10 countries and 5 countries are the common countries where we also have our offices. So the whole idea is to align those offices and get the necessary economy of scales from there.

Okay. And sir, last, our enhanced EBITDA margin, which ri ses by 600 points, it will be continuing FY25, what is your prediction?

See, this 20% is now the base, and we are now looking at improving it in the current year and you will see that happening because of the business model we are trying to change from partnership to our own management, which will improve our EBITDA margins going forward as well as by acquisition. Th is company is generating an EBITDA of around 50%. So, the overall EBITDA margin will move up in the current year. We expect th is to start happening from the first quarter onwards.

The next question is from the line of Avnish Khara from Investec.

My first one is on the gross margins. So you had a decent quarter -on-quarter improvement, so maybe you can provide some sort of colour on why exactly that has happened and whether it's sustainable moving forward?

Yes. As we explained in the previous question, that the business model, the way we are changing it, our margins will go on increasing now bec ause the margin we were paying to the partners will come down. And, as we start operations on our own, these margins will start improving. And that we have seen in the last financial year also.

Right. So then is it safe to assume that incrementally, I mean, can you provide some sort of an internal target as to where they'll sort of level off?

Our intention is to be around 25% - 27%. That is our target to reach immediately. And then let's see from there how we can improve it further.

Right. And what are your effective tax rate expectations for the next 2 years?

We are now around 7% to 8%. It will go to around 12%-ish.

Okay. 12-ish in FY '25. Is that fair to assume?

That's right. Because in the current year, there will be a higher taxes in Dubai, they have come up with a 9% effective tax. So we'll have some impact of that coming in.

And maybe if I can squeeze in one last question. You've spoken about volumes going down because of Ramadan festival, but that ended in April, right? And we've had sort of 1.5 months of Q1. So maybe you could throw some sort of colour on what kind of volumes we're seeing right now? And another question in relation to that, are we also may be planning any price hikes in the visa business?

So taking the second question first, the price rises are not there because the contracts have a fixed price rates, which have been fixed. So we don't have an option of just changing the pricing. But as you said, because of the festival reason, which started from 10th of March, those 20 days, in the last year, which started in the month of April previous year. So we have seen the volumes have come back and we'll see a better Q1 on volumes compared to the Q4.

Got it. And on the iDATA front, what kind of ramp-up in revenues do you think is possible for FY '25, given that in '22 calendar year, they've done about EUR 20 million, so any sort of colour on where that can be for FY '25 for us?

Got it. And in relation to that, so your other expenses have spiked up because of the bu siness model change, right? But do you think that because of the iDATA acquisition and then sort of since you have offices in similar geographies, there is a scope for reducing other expenses as a percentage of the revenues?

Yes, it will be. But again, once we get into the operations, we will know much better.

Also because of the increase in other expenses, the EBITDA has been impacted.

Got it. I guess the reason that I'm asking this question is that I'm trying to ascertain whether your margins will be pulled up because of the gross margins or because of the opex that we're able to get under control. Which one will...

The gross margin will improve much more because of the improvement, and that would reflect in the EBITDA margins improvement.

The next question is from the line of Anuj Jain from Globe Capital.

Congratulations on the very good set of numbers. So just want to understand, regarding that iDATA acquisition, I mean, due to what kind of problem, this acquisition is being delayed?

See, basically, we are doing a multi-jurisdiction acquisition. This company we're acquiring is present in 15 countries. So as a precondition, we have to get certain regulatory approvals from different countries. So those formalities are going on. And that is the reason the acquisition timeline has shifted. Otherwise, the entire due diligence, everything is completed. But since we are a listed company, we cannot acquire a company without all the compliances.

So right now, we are comfortable with the date that you have given like 30th June. So we are comfortable with that date, or it can be extended further?

I think we are working towards according to that date. But you can understand this is a multi- jurisdiction acquisition, so I think so we are on track.

Okay. And I just want to understand one more thing. I mean, if we add up the iDATA numbers for FY25, we'll get some growth. So let's sa y, for example, without iDATA, what are the growth we are expecting from this visa business?

I can tell you the past historical figures, we did. 3 years back, we did a INR50 crores PAT then we achieved INR 100 crores and last year, we had INR 200 crores. And now for FY24, we closed at INR 325 crores of PAT, so which was a 60% growth compared to last year. So we have been growing quite, I think, above average, I would feel. And our objective always is to maintain whatever we achieve first, so whatever we have achieved last year, our objective will be to maintain that. Now last year, we won a few contracts with different governments. We renewed some contracts like the Spanish government, with Indian government. We won a few new contracts with Portugal government, Poland, Czech Republic, Germany, Italy. So all these contracts some revenue came in last year, but majority of the revenue will start coming in this year. So definitely, there will be a good growth in terms of the organic business that we have. On top of that, if you add the countries that have not fully opened up, if they open up, numbers should increase further. New tenders that we are bidding for. If you add on these acquisitions of iDATA and other companies also that we are looking at. So definitely, we are in the last 2, 3 years, we are in a growing space right now, and that is the trajectory we want to scale.

Yes, that is very exciting, Shikhar. I just want to understand one more thing. I mean, like VFS Global, that is the major player. What kind of market share they are commanding and what is our market share?

See, there is no proper market share available in the world. So definitely what we know is VFS is probably double or more than that, maybe 3x our size. That is what we feel in terms of the market share that they are handling globally. But there is no proper numbers to find that out.

Got it. And one last question. I just want to understand like when you are planning to utilize this is for this BLS E-Services, when you're planning to utilize the IPO proceeds?

If you see in our DRHP, we have worked out a plan of investing this money over the next 1.5 years. We have started the process and a couple of acquisition s are also part of the object of this money. Those are also in advanced stages. As and when we finalize those, the money will get utilized.

Okay. And for the cash portion that we are holding, I guess, we are running 5%, 5.5% on those cash levels, if I'm right. Is that correct understanding?

So it depends. The money, which is in dollar, will be around 5.5%, to 5.75% maximum. And in India, the deposits are at the range of around 7%.

The next question is from the line of Priyam Poddar from Value Equity.

So this is with regard to the revenue. If you can share the revenue breakup of digital business between the BC and e-assisted and e-governance for the full year?

So yes, for digital, for the year, it was IN R 315 crores. And visa business for the year was INR 1,361 crores.

Now there basically, we are workin g in more than 66 countries globally, and we work with more than 46 client governments. So as of now there is no top country, but I could say that regions, in terms of region, we get a good amount of revenue from our operations in North America, wherein we have renewed our contract with Indian embassy. We get a good amount of revenue from Gulf coming in. From Africa, Northern Africa, also our revenue is quite good. From the European countries, from UK, so these are 4, 5 regions wherein we get good amount of revenue.

The next question is from the line of Sakshee Chhabra from Svan Investment.

Yes. Sir, I wanted to just understand that for Q1, what would be the sort of volume increase that you are witnessing in the visa issuances?

See, definitely, normally, Q1 is the tourist season, at least from India outbound, if you see. So I would say exact numbers, it's too soon, and we don't want to give any forward -looking statement. But I think probably 5% to 10%, we will see an increase in volume in Q1.

Okay. But it would be not more than 10%?

I'm saying that could be the average and could be more or less, I don't know right now. But definitely, the numbers will be higher.

Okay. But the issues that were there last year in terms of visa issuances, all that have been resolved now, right?

Which issues?

There was like the time taken for visa issuances was much longer last year in the same quarter, right, in Q1, so according to that.

See, time issuance, judgment is not our prerogative. We work under the guidance of the government and whatever they inform us, we have to collect the application and transfer it to them. Time taken, everything is dependent on them. So right now the government that we are working for, we know that they are taking quite smooth time and the visa is being turned around in a short duration of time. So that is what we know.

The next question is from the line of Mayur Bapodara, an Individual Investor.

Sir, congratulations on good set of numbers. Actually, my question was regarding iDATA. So the question is why there is so much difference in EBITDA margin? Like that is a huge difference, that 50% EBITDA margin of sales and ours is 20%. So can we expect that we can also improve our EBITDA margins after we synergize with iDATA?

See, they are a very niche and regional player working in only certain geographies from the last 15 years. And the government that they are working for, they've got contract at a very higher service charge. So definitely, that is the reason. And that was also one of the reasons we have acquired them. So that will also lead to an increase in our EBITDA margin, and we will also learn. We'll add value wherever we can to increase their profitability, but we will also learn and incorporate the things in BLS International. We are more focused on volume, so we will also learn and probably that will lead to an increase in EBITDA for us also.

The next question is from the line of Manoj Agarwal, an individual investor.

I'm an individual investor. I'm pretty new to your company. So if you can tell me what you mentioned that in the press release that there is some transformation in your business model. So what were the issues you were facing in your current business model that you want to transform it? And what would be a few challenges you would be facing?

First of all, we are looking at transforming and improving on the company every day. So that it is not like we have done something wrong, but it is a normal growth of the company that every day you think about what can be improved further, how you can transform the company going forward, next month, 1 year down the line, 2 years down the line. It's the changing environment we live in. So from that respect, we have mentioned that transformation. And definitely, for example, in certain countries, laws have been changing. We were working with some FMC partners in certain Gulf countries wherein you're not legally allowed to own 100% of the entity. So we had to do revenue sharing with local FMC partners, and that has been changed now. We have done our 100% investment on our own. We are now getting the fruit of that revenue and profitability also. So from that aspect, we have mentioned that business transformation. But from a positive outlook, next year also, we will look at transforming something else. Wherever we see we can improve efficiency and benefit the shareholders and the company, we work on that.

Okay. So that would be for a few geographies or countries only, you are transforming on a global level?

Correct, correct.

Okay. And this would be for your visa and consular business only or you are taking this transformation to your digital business?

See, as of now, digital business is in a nascent stage. Right now we are not looking at implementing the same model. But right now only the visa and consular business.

No. If you see the revenues that we have done, we achieved a revenue of INR 309 crores, which is a growth of 25% compared to last year. EBITDA, we have achieved around INR 50 crores, which is a growth of 37.6% compared to last year. So definitely, revenue and profitability has gone up. And this year also, we expect because of certain things that we have done, acquisitions that we are planning, the increase in the contract that we have got from different banks, e-governance contract that we have got, revenue and profitability to increase further.

The next question is from the line of Manoj Sah from Laxgov Investments.

My question is the software that you use for the visa and consular services, is it like an in - house developed software or you use a third-party software?

See everything is in -house from us. The source code, everything is retained by us in -house, but we do use certain outsourced partners globally. In different countries, we have different partners for different kind of requirements.

Okay. Just like for different countries, you will be using it in a local language or the language for the working is in English only across the globe?

Across the globe, it is in English. It depends on the requirement of the client government.

Okay. And regarding your visa business and consular is around 81% of the total revenue. You're doing the digital business in that e -governance business. So you are doing it at the centre government level curr ently or you have tie up with state governments in India? And what are your plans for doing these kind of e-governance business in other countries as well?

We have tied up with both at the central level and state level also. Some of the opportunities, some of the central schemes, Aadhaar, the data quality check and different kind of tenders we're doing directly with them. And a lot of tenders we are doing with state governments, like we recently won the Gujarat land record registration contract as well. So going forward, I see that ample amount of opportunities are there within India. But as we are a global company and we first want to excel in India and then take this model abroad, we are still looking at the same time in opportunities acr oss the world using our resources already present there. So I feel that when the time is right, we might take this global as well.

Okay. So as of now, you're doing this e-governance services in India in partnership with states and the centre, but in future, you might go abroad also.

Okay.

Okay. And what's the outlook for the FY25 growth, revenue growth? Because this year, it's like in this quarter, it was flat and for the whole year, it was like top line was just 10% growth. Any guidance for FY25?

First of all, as a company, I personally look at more EBITDA and PAT numbers. I feel we have done a 60% growth at EBITDA level. And a year before that, we also did more than 100% growth in EBITDA. So that is what we are focused on. And I feel definitely this year also, we will surpass the numbers that we achieved last year.

Okay. So are you trying to say that the focus is more on the margin side rather than the top line growth or a growth with the margin kind of.

See, definitely, our focus is the growth of the company from wherever it comes. Right now we see that there is a big amount of opportunity in the margin growth. So that is why we are focused on that. And revenue growth will come automatically with the new contracts, existing volume getting increased, everything. So definitely, if we focus on the margin growth, the revenue growth will come automatically.

And in the worldwide wherever you got orders, these are your direct orders from the government to you or you have got local partner, he gets the order, and you provide assistance with them. How does it go?

These are all direct orders.

The next question is from the line of Priyam Poddar from Value Equity.

So there is just one question that I want to ask. If you can help us, what was the contribution of Punjab government for FY '23 and '24, like the contract, which is no longer with us under digital?

I think probably it will be better if we talk on this individually because right now, we don't have the handy numbers, so from the numbers we can tell you later.

The next question is from the line of Rikesh Parikh from Rockstud Capital.

Congratulation on a good set of number. Sir, I just wanted to understand for the EBITDA, we have added that we'll like to maintain 20% plus going forward. So that was excluding iDATA, we are looking at? Or how one should be looking at?

Yes, excluding iDATA.

Okay, excluding iDATA. So including iDATA, that kind of be in the next year, it could be in the range of 24%, 25%, if I look at the current EBITDA number of iDATA.

Secondly, in terms of growth, 15% growth what we are guiding 10% to 15% kind of accrued, so that is also excluding this acquisition, or we have included this?

All of this is excluding acquisition or new contracts or growth in volume.

Okay. So on the base margin, you're looking at 10% to 15% growth, right?

So growth, I think on a normal conservative basis, this is the growth that even for the last 4 years, we have been telling this amount of growth only. 10% will grow, but definitely, numbers are changing. So we'll see.

And then, lastly, this iDATA acquisition is from our Dubai entity, if I'm not wrong?

Yes, it's from BLS subsidiary.

So means the cash, that we hold and means we have the profit that we can't fund it to India. So now again, the cash will be arising over there in Dubai, and we won't be able to reward the shareholders from that fund as well. So how do we propose to utilize t he cash holding at Dubai?

First, we are using the cash for the acquisition of iDATA, whatever we have at the moment. And then secondly, we get dividend from FZE in India, and we use it for payment of dividends as well as for our funding requirement in India.

We have no further questions, ladies and gentlemen. I would now like to hand the conference over to Mr. Shikhar Aggarwal for closing comments. Over to you, sir.

Thank you, everyone, for joining in our Q4 and FY '24 earnings call. We hope all your queries were answered. In case of any further queries, please feel free to get in touch with Mr. Gaurav Chugh, our Head of Investor Relations, or the IR team at Ernst & Young. We look forward to interacting with you again next quarter. Thank you, and goodbye.

Thank you. On behalf of BLS International Services Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines. ____________________________________________________________________________________________________

Disclaimer

This is a transcription and may contain transcription errors. The Company takes no responsibility of such errors, although an effort has been made to ensure high level of accuracy. Some minor editing may have been done for better readability. In case of discrepancy, the audio recordings uploaded on the stock exchange on May 15, 2024, will prevail.