BLS International Services Limited — Q3 FY25 earnings call

Call held 12 Feb 2025

Management summary

BLS International reported a strong Q3 and 9M FY25, driven by robust organic growth and successful integration of recent acquisitions. Consolidated revenue and profitability saw significant year-on-year increases, with EBITDA margins expanding considerably. The company maintained a healthy cash position despite substantial investments in new businesses, and management expressed optimism for continued growth and margin sustainability.

Highlights

  • Consolidated revenue grew 17% YoY to INR 513 crores in Q3 FY25 and 22% YoY to INR 1,501 crores in 9M FY25.

  • EBITDA surged 79% YoY to INR 158 crores in Q3, with EBITDA margin expanding 1,059 bps to 31%.

  • Profit After Tax (PAT) increased 47% YoY to INR 128 crores in Q3.

  • Visa application processing volumes increased 27% YoY to 9.08 lakhs in Q3.

  • Net revenue per application grew 26% YoY to INR 2,837 in Q3.

  • The company invested over INR 1,000 crores in new acquisitions during FY25, maintaining a net cash position of INR 690 crores as of December 31, 2024.

  • Visa & Consular Service segment EBITDA margin reached 37.4% in Q3, up 1,564 bps YoY.

Key financials

  1. Revenue ₹513 Cr +17%YoY
  2. EBITDA ₹158 Cr +79%YoY
  3. EBITDA Margin 31%
  4. PBT ₹140 Cr +54%YoY
  5. PAT ₹128 Cr +47%YoY
  6. EPS ₹2.93

What they filed

Q1 FY27: revenue up 25.3%, net profit up 11.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue495 513 693 711 737 +49%736 +43%815 +18%891 +25%
EBITDA164 158 174 204 213 +30%198 +25%204 +17%252 +24%
Net profit146 128 145 181 186 +27%170 +33%187 +29%202 +12%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹513 Cr Total
  • Visa & Consular Service ₹376 Cr 73.3%
  • Digital Business ₹137 Cr 26.7%

Capital allocation

high confidence
  • M&A Citizenship Invest (CI) Acquisition · Closed

    Puts BLS at the forefront of the industry for residency and citizen programs with an expanded presence in over 15 countries, bolstering visa solutions and leveraging CI's influence in the HNI category.

    Contributed INR 4.75 crores to net profit in Q3 FY25.

    The acquisition of Citizenship Invest (CI) was completed in October 2024. Citizenship Invest puts us at the forefront of the industry for residency and citizen programs with an expanded presence in over 15 countries. The strategic move bolsters BLS expertise in providing comprehensive visa solutions but also leverages CI's esteemed standing and influence in the HNI category. With the acquisition of CI, we are poised to significantly increase our processing volumes and reinforce our market position. We began to consolidate the financial performance of CI into the performance in our quarter.
  • M&A Aadifidelis Loan Solutions Acquisition · Closed

    ASPL stands as a prominent entity in the India's loan distribution and processing sector with an extensive network that spans the nation. Consolidated under Digital Service Business.

    Contributed INR 53 crores to Digital Business revenue, consolidated from November 26, 2024.

    Further, I'm happy to report we also concluded the acquisition of Aadifidelis Loan Solutions on November 26, 2024, and it's being consolidated under our Digital Service Business as effective the same date. ... This increase includes Aadifidelis Solutions revenue of INR 53 crores consolidated from November 26, 2024, onwards.
  • M&A iDATA Acquisition · Integrated

    Contributed to strengthening margin profile and adding to numbers.

    Contributed INR 25 crores to profit in Q3 FY25.

    The integration of new businesses (we have acquired iDATA, Citizenship Invest and Aadifidelis,) coupled with our transformative shift from a partner and to a self-managed model, have significantly strengthened our margin profile in the current period. ... So, if you look at iDATA in the current quarter, they have contributed about INR 25 crores. ... Yes. So, the revenue in iDATA was around INR 59 crores...
  • Liquidity Cash ₹690 Cr Healthy balance sheet with a net cash position of around INR 690 crores as of December 31, 2024, despite investing over INR 1,000 crores in acquisitions.
    While the integration of new business is going as per plan, we continue to witness strong cash flow generation, which translates to a healthy balance sheet with a net cash position of around INR 690 crores as of December 31, 2024.

Guidance & targets

Profitability

  • Consolidated EBITDA Margin Profitability · Ongoing · High confidence Maintain ~30%
    Our objective is to maintain this number [30% consolidated margins]. We don't want to have haphazard growth. So, our objective is to maintain the number. And we are looking at cost efficiencies and economies of scale in the future.

    — Shikhar Aggarwal

  • Visa & Consular Service EBITDA Margin Profitability · Ongoing · High confidence Maintain ~37%
    But if you see our Visa business, our margin has grown over 36% in the last quarter. ... So definitely, Visa business specifically, we want to maintain the margins.

    — Shikhar Aggarwal

Revenue

  • Aadifidelis Q4 Revenue Revenue · Q4 FY25 · High confidence INR 150 crores
    Okay. So, if I'm not wrong, in FY '24, this company has done a revenue of INR 577 crores. So, can I assume that in quarter 4, the number could be around INR 150 crores for Aadifidelis? Yes. That is what we are expecting, yes.

    — Shikhar Aggarwal

Tax

  • Effective Tax Rate Tax · FY25 · High confidence 12%
    So, what we are working on last year, the tax percentage was around 9%. This year, we think it will go to around 12%.

    — Amit Sudhakar

  • Effective Tax Rate Tax · FY26 · High confidence 12%
    12%. I said, 12%.

    — Amit Sudhakar

What to watch in Q4 FY25

Aadifidelis Revenue Contribution

Q4 FY25
Current INR 49 crores (Q3 FY25, partial quarter)
Target INR 150 crores

Why it matters

To verify the growth trajectory and increasing contribution of the Aadifidelis acquisition to the Digital Business segment.

Okay. So, if I'm not wrong, in FY '24, this company has done a revenue of INR 577 crores. So, can I assume that in quarter 4, the number could be around INR 150 crores for Aadifidelis? Yes. That is what we are expecting, yes.

Risks & concerns

  • Seasonal volatility in visa application volumes

    low

    Visa application volumes experienced a sequential dip in Q3 FY25 due to less travel during November and December, which are seasonally slower months.

    Analyst acknowledged

Q&A highlights

5 direct, 1 evasive
Contribution of recent acquisitions (iDATA, Citizenship Invest) to Q3 FY25 financials Direct
So, if you look at iDATA in the current quarter, they have contributed about INR 25 crores. ... Yes. So, the revenue in iDATA was around INR 59 crores and Citizenship was about INR 13 crores. ... And Citizenship Invest has contributed about INR 4.75 crores of the net profit.

Clarifies the specific financial impact of key acquisitions on the current quarter's revenue and profit, providing transparency on inorganic growth drivers.

Asked by Hatim Broachwala

Organic growth performance after adjusting for acquisitions and perceived de-growth Partial
So basically, we look at the net revenue growth, as we have talked about, the change in the business model. ... Can you check that there is a Net Revenue growth matching with the growth in the EBITDA numbers?

Addresses analyst's concern about potential organic de-growth by redirecting focus to net revenue growth and business model changes, rather than directly addressing the adjusted organic revenue figure.

Asked by Hatim Broachwala

Contribution of Aadifidelis to E-Service segment Direct
It's about Aadifidelis, has contributed about INR 49 crores.

Provides a specific financial contribution from the Aadifidelis acquisition to the Digital Business segment, detailing its immediate impact.

Asked by Hatim Broachwala

Decline in other income and sustainability of operating margins Direct
Shikhar also talked about that we have done the investment in the new businesses. So, the interest from fixed deposits have come down. ... See, we have been saying that we want to maintain over 30% margin in our Visa business. And Digital business will change because of the mix of Aadifidelis and the other businesses.

Explains the reason for the decline in other income (reinvestment) and outlines the company's strategy for maintaining and managing margins across its diverse business segments.

Asked by Sandeep Agarwal

Sequential dip in visa applications and seasonality Direct
So obviously, since this quarter, there is seasonality. People travel less during November, December. So that is why we have done lesser numbers compared to last quarter. Still, because of the acquisition of iDATA and new contracts that we had started, there has been an addition in the numbers.

Clarifies that the sequential decline in visa applications is due to seasonal travel patterns and a one-off surge in the previous year's comparable quarter, reassuring about underlying demand.

Asked by Arpit Shah

PAT guidance for FY26 Evasive
See, actually, what I've told you is that, I don't want to comment on any specific numbers. But what we have done in the past, we want to maintain. Whatever number, we want to make that as a base.

Management explicitly declined to provide specific PAT guidance for FY26, indicating a cautious approach to long-term numerical targets despite analyst's push for a ₹700 crore figure.

Asked by Arpit Shah

Sustainability of margin expansion from current levels Partial
See, first of all, we as a company want to operate as a sustainable basis. We are always aiming for obviously more efficiencies that we can bring into the business. ... But definitely, whatever we have achieved, we want to maintain that.

Addresses the challenge of further margin expansion, stating the focus is on maintaining current achieved margins and driving efficiencies, while acknowledging the impact of lower-margin acquisitions like Aadifidelis.

Asked by Ankush Agrawal

Digital business being a 'drag' on total business and potential spin-off Direct
See, first of all, we do not believe it's a drag. If you see retail business, it is a volume-generating business. And since it is a business mostly operating in India, we get paid in INR. It's a volume business. So, if you see our overall profit this quarter is at INR 18 crores compared to INR 9 crores last year same quarter. So actually, we have doubled our profits in this business.

Management refutes the idea that the Digital business is a drag, highlighting its significant profit growth and potential, indicating no plans for a spin-off.

Asked by Gopal Krishnan

3 min read 6 chapters

Detailed narrative

Robust Financial Performance in Q3 & 9M FY25

BLS International delivered a strong financial performance in Q3 FY25, with consolidated revenues reaching INR 513 crores, marking a 17% year-on-year increase. For the nine-month period, revenue stood at INR 1,501 crores, up 22% from the previous year. The company's EBITDA surged by 79% to INR 158 crores in Q3, with the EBITDA margin expanding significantly by 1,059 basis points to 31%. Profit After Tax also saw a substantial rise of 47% to INR 128 crores in Q3, and the company has already surpassed its full FY24 EBITDA and profit numbers within the first nine months of FY25.

Strategic Acquisitions Drive Growth and Margin Expansion

The company's strong performance was significantly bolstered by the integration of recent acquisitions, including iDATA, Citizenship Invest, and Aadifidelis Loan Solutions. iDATA contributed INR 59 crores in revenue and INR 25 crores in profit in Q3 FY25. Citizenship Invest, acquired in October 2024, added INR 13 crores in revenue and INR 4.75 crores to net profit. Aadifidelis, consolidated from November 26, 2024, contributed INR 53 crores to the Digital Business segment, reinforcing the company's shift to a self-managed model and strengthening its overall margin profile.

Visa & Consular Services Segment Outperforms

The Visa & Consular Services segment demonstrated robust growth, with net revenue increasing by 60% year-on-year to INR 258 crores in Q3 FY25. The segment's EBITDA grew by 77% to INR 140 crores, achieving an impressive EBITDA margin of 37.4%, an expansion of 1,564 basis points. Visa application processing volumes rose by 27% year-on-year to 9.08 lakhs, and the net revenue per application increased by 26% to INR 2,837, reflecting strong operational efficiency and value creation.

Digital Business Segment Shows Significant Growth

The Digital Business segment reported an 87% year-on-year revenue growth, reaching INR 137 crores in Q3 FY25, with organic growth contributing 16%. The segment's EBITDA increased by 88% to INR 18 crores, resulting in an EBITDA margin of 12.9%. The consolidation of Aadifidelis Loan Solutions played a key role in this growth, contributing INR 53 crores in revenue from its partial quarter of operations. Management views this segment as a volume-generating business with significant future potential.

Healthy Cash Position and Capital Allocation Strategy

Despite investing over INR 1,000 crores in new acquisitions during FY25, BLS International maintains a strong financial position with a net cash reserve of approximately INR 690 crores as of December 31, 2024. The company's capital allocation strategy focuses on maintaining a high return on investment, targeting an ROE of around 15%. Management is actively pursuing both organic expansion and inorganic growth opportunities, leveraging its healthy cash reserves to fund future ventures and tenders.

Commitment to Margin Sustainability and Efficiency

Management is committed to maintaining the consolidated EBITDA margin around the 30% level achieved, emphasizing sustainable growth over haphazard expansion. The Visa business specifically aims to maintain its margins, which were above 36% in Q3. While acknowledging that some acquired businesses like Aadifidelis may operate at lower individual margins, the company's overall strategy involves continuous efforts to bring in efficiencies and achieve economies of scale to sustain and improve profitability.

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