Summary
BLS International Services Ltd. is one of the largest tech-enabled outsourcing partners globally focused on visa, passport, consular, and citizen services with operations across 70+ countries. The company benefits from long-term multi-year government contracts, anchoring predictable, quasi-annuity revenue with a diversified client base. Recent contract wins like the three-year Ministry of External Affairs India deal and the INR 20.55bn UIDAI Aadhaar Seva Kendra engagement exemplify strong revenue visibility. The business is pivoting towards higher gross margin digital services such as digital identity, and e-governance platforms, which are expanding rapidly and enhancing recurring revenue potential, despite shortterm margin pressure due to integration costs. BLS’s operational efficiency and scale support improving EBITDA margins, projected to reach 29.4% by FY27E. With revenue forecasted to grow at a 24% CAGR to INR 33.5bn and PAT at 26% CAGR to INR 8.54bn by FY27E, the company maintains a strong balance sheet with a healthy net cash position enabling strategic acquisitions. We initiate with a BUY rating, valuing the stock at 21.5x FY27E EPS with a target price of INR 445.
Key Highlights and Investment Rationale
Key differentiating factor: Long-term government contracts provide stable revenue and renewal-dependent cash flows, minimizing volatility and deepening client relationships.
Key digital strategies: Digital transformation strategy drives higher margin, recurring revenue streams through e-visas, digital identity platforms, and e-governance services.
Healthy balance sheet & scope for inorganic expansion: Strong balance sheet and cash flow enable M&A-led growth despite recent regulatory tender restrictions in Indian Missions till 2027; global diversification helps mitigate risks.
