Growth sustains on strong operational execution
• BLS International Services (BLSIN) posted an impressive performance in Q3FY25. Revenue from operations rose 17% YoY to INR513cr led by an 87% surge in the digital services segment following the integration of Aadifidelis Solutions (ASPL). Excluding earnings for iDATA, the VC business posted tepid revenue due to the seasonality factor.
• EBITDA grew 78% YoY to INR158cr, with EBITDA margin expanding by 1,060bp YoY to 30.8%, aided by the shift to a self-managed model and the iDATA integration in the visa consular business. The management is targeting an EBITDA margin of over 30% in coming quarters.
• PAT (after minority interest) grew 47% YoY to INR128cr, slightly impacted by higher depreciation and interest expenses.
• iDATA contributed INR59cr to Q3FY25 revenue, with an EBITDA of INR25cr (42% margin). Another acquisition, Citizenship Invest, contributed INR13cr/INR4.75cr to revenue/EBITDA (37% margin).
• The number of visa applications grew to 9.08lk from 7.15lk YoY. This data includes visa applications processed by iDATA.
• BLSIN’s business correspondent network processed 3.43cr transactions, with a gross transaction value of over INR21,000cr.
• As of December 31, 2024, BLSIN, including its controlling stake in ASPL, operates more than 41,500 customer service points (CSPs) and over 136,700 touchpoints across India.
• The full benefit of the integration of ASPL will accrue from Q4FY25. In Q3FY25, its contributed INR53cr to total revenue. For Q4FY25, its contribution is pegged at INR140–150cr.
• In 9MFY25, BLSIN invested over INR1,000cr in strategic acquisitions (iDATA, Citizenship Invest, and ASPL), funded primarily through internal accruals. Despite these investments, it maintained a robust net cash balance of INR690cr as of December 31, 2024.
• The company in continuously adding newer geographies and offices to its existing network.
• It is actively bidding for multiple contracts worth several billions of dollars that are up for renewal and are at various stages of the bidding process.
• Several countries are opening up their visa consular services for outsourcing for the first time, presenting new opportunities.
• With 50% of the market yet to be outsourced, the potential opportunity remains significant.
An established player in the visa services business
The USD2.6bn visa outsourcing industry has high entry barriers and is dominated by three players, with VFS Global commanding a market share of 50–55%. BLSIN and TLS Contact each control 10–15%. Despite being less than two decades old, only 40% of the visa market is outsourced, up from 22% in 2010, thus offering significant growth potential. Consulates have delegated tasks to service providers for better efficiency and cost savings. This niche industry offers BLSIN substantial opportunities to leverage its strong brand and competitive advantages. Since its inception in 2005, it has expanded to 70 countries, served 46 government clients, and processed over 36cr applications till date.
High growth potential in digital services
BLSIN consolidated its e-governance and BC businesses in the digital services segment, targeting G2C services with low tech penetration. It is active in several Indian states and benefits from greater outsourcing of citizen services by governments. As a tech-enabled provider, it offers: i) BC services to major domestic banks, ii) assisted e-services, and iii) e-governance services that deliver essential public utility services, social welfare schemes, healthcare, financial services, educational support, agricultural assistance, and banking services to G2C and B2B clients. The BC business has expanded rapidly, especially after acquiring Zero Mass Pvt, increasing its touchpoints and aiding growth.
Valuation and view — Maintain ‘BUY’
Its operational performance aligned with our estimates. It posted a record high quarterly revenue. As the only listed Indian company in global visa processing and G2C services outsourcing, BLSIN operates a capitallight and cash-generating model, with strong growth potential. New visa contracts and an expanding digital services network can further enhance profitability. Its strong track record of acquisitions continues to broaden its market reach and service portfolio. Given its in line performance in Q3FY25 and higher-thananticipated margin guidance, we have revised our FY25/FY26 EBITDA estimate upwards by 6% each. Consequently, we raise our SoTP-based TP to INR637 from INR604. Maintain ‘BUY’.
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