BLS International


(rvetri) #84

The world CSR congress awards BLS International as India’s most ethical company in the VISA outsourcing category. This should put all doubts about the ways and means of BLS securing contracts. Here you have a company declared as the most ethical by a world reputed neutral body

Hope the critics will think about their criticism now.


#85

(ramanhp) #86

So finally it is curtains down on BLS’s service centres in Punjab.


#87

So finally the inevitable happened…
end of the day we are left with 133.3 cr trade receivables major portion of which is the punjab project due, 98cr debt on the books…(nov 17 figs)
5 more similar gov projects BLS is looking forward…
Screenshot_20180125-233538|281x500

I sincerely hope they become cautious now, otherwise this can turn into a debacle… As of now, they may move the court , which i feel will go in favour of bls… In recent past we saw when Tata power appealed to the SC regarding reconsideration of tariff in mundra case as it was becoming an unviable prospect, SC uploading the scantity of a ppa agreement and rule out against the argument of tata power… Still what kind of legal contract was there with bls is yet to be known…

The company has enough accruals to pay off the loans, otherwise since this is not a cash demanding business, rather the major visa processing is a negative capex cycle business we need not worry about accruals being depleted , rather i would want the debt to be gone, finance coats should not affect the bottom ine… In a cnbc interview https://youtu.be/3CIJPVPpRFU ,Mr. Karan Agarwal has mentioned that they are going to wipe off the debt by the end of fiscal 18…But that was with a different scenario in mind or were they already anticipating this? May be and more likely the later…

I would like to see them going for the international business where the margines are excellent…
I am not worried with this outcone of the punjab project, that wasnt giving much topline either…
Rather i feel they will take this experience further and grow internationally rather than all this rubbish digital india…

Disc… Invested and averaging up and down


#88

People should invest in modest quantities in scrips like this and wait for a long long time… Since on the pe multiple front we dont have a basis to compare, and the kind of mandate mutual funds have they are most likely to avoid bls, we will require a lot of time till the market discovers this company, post that we can expect valuations skyrising to even 50s in expectation of growth…
With such a small equity base of 10cr shares outstanding, and of that 74percent is the promoter hold, so we are left with 2.5cr floating shares or even lesser considering the fiis will continue to increase stake… in this scenario or compressed liquidity, this ia high beta bet…also note the face value is already 1, and this liquidity issue is not going to change unless bonus or rights issue is declared…
So minor issues such as with punjab project should be rejected on a longer term scope, and the fact that company is planning to expand in asia and african e gov space where unlike the visa space the compitition is not that steep…
Infact i expect more shengen countries ar3 going to be added anf the growth is going to happen in leaps and bounds from here, not to ignore the steady growth in already registered visa processing counts…
For a fig ex. The present fy will generate an eps of 11 which may grow to 13 next fy again 25 next fy to 26 next fy to mayb 36 nxt fy and so on…as oer my conviction a stable skyrise valuation will be obtained in coming future and after that also we will enjoy growth jumps both on steady and leap format…

Diac… invested


(abi.varghese) #89

Have a look,


#90

abi.varghese yes i noted your post… But i think a large portion of smart money was already factoring this , since from the last 6 months not a single penny was paid to bls and news of employee going to strike with management saying “how can we pay salaries if we dont get paid by the gov”…

What effect it will cause to the prices is not my concern,rather i want dips so that i can buy more , but since the news was already out during the last trading session, and the stock didnt react drastically, i doubt there will be a 5% circuit down on monday, but anyways either things can happen…
If Mr.Baid had invested seeing potential in the digital india projects and bls being a part of it through punjab, i am confused why did he exit…Egov in india is not going to be popular any soon and it will take time and a lot of patience to generate revenue and unlock value and event like this was expected in this political doldrum, that is common sense…But his reaction was too knee jerkish i think…with all due respect…
Also the punjab project was generating receivables and liabilities, he rightly mentions but within that we saw huge traction in the profits which was purely spearheaded by the spanish contracts… Not only is the growth potential and margines in the visa processing business attractive, but also great potential to expland with coming time…And i feel most of the investors here have come to invest in bls just on this aspect’s potential…

Coming to numbers now, 97.9 cr of debt against a cash stack of 101.6cr and generating, is a comfortable picture and this situation can be solved …i repeat here as i hv already mentioned in the previous post of mine, they were planning to wipe the debt off the books by and around the end of this fiscal…And they have enough internal accruals to do that, may not be in a single strike but within few quarters…

To me , booking out now will be like as if the company is bank rupt, it lost all the contracts and is so debt ladden they they cannot even generate finance cost ka cash flow…

This would be implorable idea if done, the egov space is open to bls outside india too!! Within india 5 more states have put for tenders… So there are furher oppertunities in this space, so all of the investors who have invested on this egov theme must wait and see the company work things out!! And if indian egov scene is going to take time to unfold, see what happens in african and afgan projects that bls is operating !! Selling now in my opinion is pure panic selling… And we dont know yet if bls is going to move the court and what will be the outcome, may be they will get the receivables and write off debt… which is most likely…

In summary, in feel its very easy for bls to turn the situation of bad debt around and also the potential in indian egov space will take time to unlock, maybe 5 years or 10 years or more… In the mean time we have the rest of 75% of the business which is international and growth sprut is already happening and is due to come… This event does not dent the track records of bls rather makes a mockery out of the indian state gov who thinks such e gov activities are less important to promote rather panchyat clubs are better instead … On a different note, i fear whats coming after 2019 elections…

Anyways, stay invested dont follow twitter biggies, rather follow the basics involved and grow with your company…

Disc…invested, will add to double the investment amount ,if correction happens on this news…


(blueeyedinvestor) #91

Invest at your own risk and understanding in equity. Just because someone else has invested don’t get biased. If you follow this approach then equity is not a product or investment alternative for you.

The same @Gautam1313 invested in Shree Pushkar Chemicals but never tweeted about the ongoing serious fraud case which is even more scary compared to BLS as the cash flows are strong in visa business which can help them to face the governance project challenge. No wonder the stock corrected from Rs 300 to 235 level. I don’t think much downside is left. You may see sudden blip because of this news based on sentiment for next 2 to 3 days. But I don’t thinkuch down side is left and stock seems to be discounting the visa business at current valuation.

My two cents the management should be proactive to hold an investor call to clear things.

Just because some Mr.Baid invested or someone else do not base your decision based on biased approach. The Bull market will produce many such Baid and others whose strength will be tested only during bad themes. Who knows if vested interests are themes here for theimeshereweeting about one company and not about another where he invested.


#92

Such rallies we saw in december jan… These are bubble rallies, ignited by media coverage, not backed by fundamentals, deflating in these bubbles doesnt happen with any perticular reason…
Instead i feel market have been factoring this punjab debacle since the q2 balance sheet and news about employee strike and the change in gov…


(blueeyedinvestor) #93

Did anybody noticed that why such rally happened especially between November and December (including the fall in December). If you look at the December shareholding, the entire domestic MF exited their holding. The rally was created artificially so as to provide exit to MFs at comfortable profit. During the quarter the retail investors holding went up considerably.

So invest in equities only if you understand all risks and don’t get biased and base your investment just because someone else has bought it. @Gautam1313 and many like him can always bias your views. So just judge your decision and invest.

The stock went again ahead in January to 290 levels and then again retraced back to 235. Who knows if the rally has been created to provide exit to GMO.


#94

blueeyedinvestor excellent observation… But these small rallies and falls dont matter to me much personally speaking…
I believe in business cycle and try to remain invested throughout one or many of such cycles…
I feel price is a by product and i am not interested in that except when making my entries…
Bls has potential and its the only listed company in this space, market will have no where to go but buy it at anycost to get the benefit of this business, so valuation wise i have no doubt it will not get premiums…
From the business model point of view , i find growths in unknown domains…
Its better not to invest with short term horizon, every business has risk and hence the return…
If nokia can crash, who cant?


(Mayank Narula) #95

Got to know from a source close to the company that they have received payment to the extent of 20 crs from Punjab govt. They have been doing business at a rate of around 15 crs per month. Even with 20 crs payment, receivables should be more than 150 crs as on Dec which does look like a scary number. There could be more downside, if company discloses this number along with Q3 results, which they are not bound to do as balance sheet will come out at year end only.

Disclosure: not invested currently.


#96

As per CENTRUM report, over the course of 5 years the punjab sewa kendra project would have generated 170.4cr PAT (net of tax and expenses)…which translates into a total 5 year aggregate eps of Rs.16.66, effectively we will lose Rs.3.33 each financial year( not on fy weighted average basis )…
Regarding the present debt level and receivable, the gov is going to give 180days prior notice to Bls before stopping the service, my guess is the receivables due will be received and the debt will be prepaied else legal doors are already open, where bls will surely get back receivables and extra compensation also, hopefully the new punjav gov is not that kind of a dork to make bls pursue the later option…

30per ent loss of eps in a year (with isolated fy18 guidance of 11eps)is definitely not a welcome thing still the growth potential of bls is not at all in the punjab project, and only a few handfull of retail had invested here looking at the punjab prospects…

BLS-International-Visit-Note-Centrum-12092017.pdf (1.2 MB)

Rather the immense potential is here in the following attatchment…

@Mayank_Narula


Check this video from 4.45 to 4.56 , the management himself said they hv received around 50 TO 60 cr from the gov already, your “close source” is misleading…

Disc…invested,will add to double the investment amount ,if correction happens on this punjab news


(blueeyedinvestor) #97

Even if you knock off entire 150cr from the net worth it will have an impact of nearly rs 15 per share. As I said…It looks like the current valuation is only factor in the visa business since the pain in Punjab project started reflecting from post Q1FY18 results onwards and which is why the market also dI’d not sustain the uptick in the price.


(rvetri) #98

Looking at it positively, this headwind is gone as one shot, and Co can
focus on its high fcf biz of visa processing… Personally i don’t think
this will become a bad debt… We are not yet a banana republic for govts to
renege on contracts…


(Mayank Narula) #99

Dude, I am writing here what I came to know. Numbers can be here and there a bit. But mutual funds cutting on investment is not a normal thing.

Just to put things in perspective, one of my holdings Satin Creditcare went through a horrible time in last one year, but at the end of the day MF ended up increasing the holding as the issues are temporary in nature. Point here is, that MFs are not as panicky as individual investors and won’t chicken out if issue is not so big.


#100

@Mayank_Narula
Ofcourse you wrote what you know, i appreciate that… But that might be untrue…

As far as mfs, i dont track the mf activity at all, as they have their own mandate of investing, which most likely different from each individuals… I have seen stocks going up multiple times after ace mf book out, most notably UPL and another cases i have had experiences that you have as u said…

So drawing conclusions by fund activity is totally futile and is better avoided by investors who have analysis skills of their own…


#101

While i maintain my bullish stand of the company, i am aware of 2 main risks to this busniness…

  1. On a macroscopic view the most disruptive effect that can be played is by E-VISA which is presently being issued in select countries on tourist and business visa, key benefits include almost half the cost and double the length of visa term on e-platform…

  2. On a more local aspect, with expansion there is an inherent need for qualified and skilled employee in large numbers in a business where level of sophistication is high on a average basis, not only to train then and retain them…

Of the other sporadic risks, like terrorist activities, intercountry relationships are other of risks to be noted…

The egov projects coming up internationally and in india are being sought without adequate pilot drills and hence sustainability in the longer term remains as a risk both in terms of logistic and financial justification…

Yet, considering the scenario at hand, bls is just 4.3% strong in the visa outsourced market… Any expansion is going to multiply the topline , and in the spain bidding even the cost advantage which gave them the lead may carry over to upcoming biddings… Notably france will be coming out for tenders in schengen space this year and also japan…

In summary, Bls international is in a infliction point …

Disclaimer… Invested


(learning) #102

IMHO, definetly loss of Punjab business is short to medium term negative. I really don’t have any clue on the BS /P&L impact. Will wait for the numbers. I am personally not very excited about seva kendara.

However, I really feel, if mgmt is any good, it should win few Visa contract in next 2-3 quarters, if they can, i would stop worrying about Punjab. I would wait patiently for any new order wins, if that doesn’t happen perhaps by end of 2018, might as well sale my holding.

VFS though seems to be doing well in the mean time.

I think people selling now also have a valid reason,as stock might correct in short term, providing good entry point.

Disc: Invested


(nkabra) #103

rvetri,

How do we insert video links like you have inserted for BLS international.
Also, if we can insert data from screener or moneycontrol balancesheets, can someone help me here.
Thanks in advance.