BLS International


#104

The upload tab u hv on the extreme right bottom of ur editor is your universal insert tool, screen shots, pdf, xls etc


(nkabra) #105

Thank you for the suggestion


(blueeyedinvestor) #106

It’s very simple…its been last 9 to 10 months since Q4FY17…The management has been saying to bid for new visa contracts but has not been able to source a single contract which is substantial both in terms of units and value. Plus any new contracts will go and rest in overseas dubai subsidiary and repatriation of cash flows will continue to be a challenge unless they end up paying big tax…hence debt repayment using visa cash flow will be a challenge…One need to understand this.

Punjab contract…despite of raising apprehensions multiple times…The management has never been upfront to accept the ongoing issues. The contract was awarded by old government and with new government the political vendetta will never allow such pricey things to continue…and hence the cot rcat cancellation occurred. …The RFP if you do a deep dive…has no clause of compensating the winning company in case of cancellation…As per RFP the government can safely cancel the contract by giving three months notice without any single penny of compensation…Receivable of Rs 150 credit will put big dent on balance sheet…Further existing debt of Rs 100 credit will intensify the stress…auditor in my sense will come hard on management to write off the he debtors…If not…then it will put questions on statutory auditors. Management till date not coming in public there explain the pain they are going through and keeping all in the dark…If you ask them they will say since no formal communication has been received they have no clue and hence won’t comment on the same. Very adamant…I have my doubts…

HDFC securities also in the process of downgrade…I believe it’s a matter of days or so…

Punjab was a major contract for the work reason…One it was lying in Indian entity and hence the prospects of better profitability and thus better dividends were bright…which is gone now…second to he woke project was significant to provide uptick on revenue and ebitda margins were much better … This is also gone…

Disclousre: have sold of for the time being…


#107

Brother please enrich me with the source of this statrment, because what i am finding is a totally different situation…

Section 73 of the Indian Contract Act, 1872 lays down the basic guidelines for identifying the losses. Section 73 reads as follows:

“Compensation for loss or damage caused by breach of contract:

When a contract has been broken, the party who suffers by such breach is entitled to receive, form the party who has broken the contract, compensation for any loss of damage caused to him thereby, which naturally arose in the usual course of things from such breach or which, the parties knew when they made the contract to be likely to result from the breach of it.

Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.‚ÄĚ

Keeping in view the provisions of section 73 and the court judgments, the aggrieved party would be entitled to one of the following types of damages, depending upon the circumstances of the case:

A. General or ordinary damages.

Damages arising naturally and directly out of the breach in the usual course of the things.

B. Special damages.

Compensation for the special losses caused to the aggrieved party by the special circumstances attached to the contract.

C. Exemplary damages.

Damages for the mental or emotional suffering also caused by the breach.

Also how can you suggest that the punjab gov is following standard legal procedure in giving a 180days notice but not delivering the receivables… We have yet the have details of the disolution of the contract, but its very irritating , because in the q2fy18 concall th3 company didnt share any light of this situation whivh may arise and even when asked of this possibility, they started to be unrealist optimistic and inturn back the gov situation, in that post gst disruption the tax collection has slowed down and hence the delays…!! Shows the character they suit up towards theirs shareholders, very disappointing…

As i also mentioned in my previous post, 170.4cr of PAT was estimated to be generated over the whole 5 year period…according to CENTRUM RESEARCH ESTIMATES posted in BLS official site…considering margines from 26% to 33% (which i feel is unrealistic and too high)

In H1 the total revenue from operations is 381.7cr and punjab project is just 92cr, effectively only 24 percent of the topline and with seasonal uptick in h2 in visa processing business, this punjab pie percentage is going to go down further…
In q2, out of 186.5cr revenue from operations, 47cr has been from punjab, again 25 percent …

So i feel if the debt receivable situation is mitigated, this punjab project will have a miniscule effect on the financials, a effective loss of Rs.16 eps over 5 years, Rs.1.5 eps this year and next, cannot be my reason to justify to stop holding shares with bls international…

Also, the management has repeatedly said , realising new tenders is a gov process and it typically takes 6 months to 2 years for any tender to show any progress…

I will be keenly looking into how the h2 shapes up, without the punjab project…

Disc… Invested and using dips to average down and double up stake


(blueeyedinvestor) #108

Gentlemen I think you are smart and intellectual enough to browse through the RFP as it is a public document. There is no need to go so far up to section 73 and if you just look into first few section which talks about the clause of CAVEAT EMPTOR in India Judicial System. RFP is a legal document vetted by both contractor and contractee and Indian Contract Act or any other Act cannot override the clause of RFP.

I know investment decisions are always emotional…but we need to control the same if you want to generate sustainable returns.

The platform, I believe is not a recommendation for buy or sell…nor are my inputs any indications of the same…It is just an open view…


#109

Investment decisions might be emotional to you @blueeyedinvestor but not to the most of us, and i dont need advices from you regarding generating sustainable returns…

You may always have a reaction to whatever is happening around you and that may frequently trickle down to selling ur holdings on knee jerk negativity, and quite ironically you preach of controlling emotions and generating sustainable returns…
You rightly said,

Thankfully, else people would have taken you seriously…

If you cannot maintain fellowship and help out a member asking to clear confusion regarding a legal situation which i believe most dont have much background in in a cordial fashion, instead attacking taunts about intellectuality and sense, its implorable that i had made a futile attempt in evoking a honest response from a person…

Ps.dont take everyone as a challenger, some do really come to discuss and learn from eachother, ofcourse thats a language u cant understand …


(blueeyedinvestor) #110

We all are in learning mode…


(Left this forum) #111

We will debate eternally as long as keep anything and everything subjective. Unfortunately we deal with such subjects which are difficult to broken down to objective. So MINUS hard feelings this will go on, welcome to world of social (for better call intellectual :blush:) networking!

On a serious note this has become a debate in some circle as to impact of over information (NON VALIDATED) on decision making. Couple of days in some of my old posts, I was trying to highlight.

  1. Easy information and resources (like online forum, free website etc) brought enormous psychological battle to mind of ordinary investor without VALIDATION process. I wonder when an news paper or regulated news paper publish certain things, have they audited the process of particular individual or company? Perhaps the rudimentary reading will be the next biggest reason for wealth destruction of ordinary investors like me.
    Now the problem is who is arbitrator for validation process? By the way this battle going to be insane and intense as we move from information age to conceptual age. This book is worth reading in my opinion.
    It peaks into some of these concepts and usage of right brain.

Interestingly few investors are expanding this concept to some what like this. Going forward analysis will play little role in success, rather it’s whole picture and intuition. Analysis is going to be outsourced, so zero marks for my Guru Mantra series or all other garbage I wrote here and somewhere else. :blush:

Amazingly pre 1929 stock market was following same whole picture story with R mode. Richard Wyckoff may be classic example. Fascinating human, back to 100 years still we are advancing in leaps and bounds!


#112

Its best not to base investment decisions on new articles…
The best line of action is to wait for the q3 results and attend the q3 concall…
I will be doing the same and for the benefit of all fellow boarders, i will highlight the concall to much details as possible…
I think we can base our calculations better with internal information, remember the whole project is not unviable as 500 centers still exists as per media reports …
To quote the reports…
‚ÄúTo make the sewa kendra project financially viable, the cabinet decided on shifting their operations to a new model.‚ÄĚ

‚ÄúOf the 2,147 such centres, only 500 will remain operational. The cabinet decided to serve a 180-day notice, as required, to end the contract with the current service provider of the sewa kendras.‚ÄĚ

Whats the new model?
Will bls still be operating the 500 sewa kendras and the current contract terms to be terminated to renew it?

Its all hazy a picture…
Unless i hear the management speak on this, i am not taking any decisions on this…
But anyways, i am not here to opt out of shareholding with the company on the basis of a single contract loss, while such incident may be repeated multiple times in future, its a part of the business…
It exposes the risks involved to the investors, but jumping and buying on news reports or selling on the same is never in any investment books…
And is the mentality of traders not investors who are serious and dedicated in thier investment philosophies…

Disc… Invested


#113

‚ÄúTill January 15, 2018, the government paid Rs 116 crore to the service provider and another Rs 147 crore was outstanding‚ÄĚ

‚ÄúMost of the kendras being closed are in rural areas. Of the total such 1,755 kendras, most were reporting around eight transactions per counter per day.‚ÄĚ

http://www.tribuneindia.com/mobi/news/punjab/accountant-general-questions-loss-to-state-on-sewa-kendras-construction/535242.html

The other 147cr may be paid in this 180day period of notice…
The only concern left is to get the bad debt out of the books and remove the finance cost, rhe investors will be more than happy with the rest of the business…


(atul1082) #114

while RFP needs to be carefully examined to see the scope of compensation to either party in view of pre mature cancellation of contract, my understanding of the law is that act is superior to the contract.In other words, any contract not in line with the act, the act would over ride the contract.


(Mayank Narula) #115

Hi,
It’s not my place to recommend you to buy or sell or accumulate more. However, just one observation here. Usually we use the dips to average down when facts have not changed and there is a just a market induced correction in the stock. Or we feel that the current issue is really a non-issue and market is disproportionately discounting the news. However, in this case there is too much uncertainty around the company. It may well be the case that this issue can end up hitting the company on both balance sheet and P&L level.
Just my 2 cents that it won’t be prudent to average down right now when stock can even correct more from here and would require lot to things to fall in place for further movement. Further, market will always take any new project win with a pinch of salt and this may reflect in the valuations. This is the biggest risk and any new investment should be made with revised view on returns expectations.

Thanks,
Mayank


#116

Here is the 2 volumes of rfp issued by punjab e gov regarding bidding process of sewa kendra…

5224.pdf (1.6 MB)
5184.pdf (1.8 MB)
Now where did i find any mention of revoking the agreement AFTER commencing of operations, if such a situation of financial viability of the said project may arise, and the successful bidder and subsequent service provider is at its own risk of the capifal employed or a termination of contract may be sought in the light of the situation at hand and the promised payment in the yearwise slab provided will not be adhered to, in any situation…

The disclaimer mentions that the psegs shall not be liable to any expense that the bidders may incur during the bidding process or to the ditection of the processs…

To me, as i interprete, the receivables are bound to be given to bls, and if the court is moved, bls will get rewards instead…

Disc…invested and averaging down

If anyone of you have other opinions please reply with reference to the text…


#117

Official notification has been released by bls finally… Here is the copy from bse site
b67e5a18-d429-429f-8f3c-6001e18d4661.pdf (938.5 KB)


#118

The Agreement was terminated by Government of Punjab in view of their precarious financial position and their inability to pay our dues as per their commitment. No deficiency in service on our part has been reported for term ination of the contract.
Now rhey are saying inability to pay the due even… Chalo, that is almost like declaring bankrupt, cant wait for the q3 concall


(Mayank Narula) #119

Contract was cancelled due to inability to pay and govt. will go ahead and clear all dues in 6 months. Ironic.


(rvetri) #120

Video Interview by Shikar of BLS just 2 weeks back. He expects big VISA contracts very soon…From Shengen countries…Just one order will make the stock zoom again…


(atul1082) #121

This is old report dt 12th oct2017


#122

I think bls is negotiating to ease the payments…

Either wise we have to pay the interest costs in the mean time!


(blueeyedinvestor) #123

HDFC downgraded the stock to sell with revised target price of 160. Wow