I am not sure how much of business do they do with indian MEA. Not sure of the impact
Not concerned about the existing business impact, i am more concerned on how this may affect their growth target and how it may affect other region operation
On the other hand it’s a wake up call for the management to have more importance for customer satisfaction
Hopefully it helps to move in right direction
Existing Visa consular operations awarded by Indian MEA to BLS in following countries :
Norway, China, Canada, Oman, Kuwait, UAE, Singapore. Now after this order they won’t be able to bid for any fresh tenders in next two years. Also, if any from the above seven contracts is expiring it would go to some other company. Anyone having any idea about the contract timelines for above seven countries?
As per a voluntary clarification issued by them, MEA contributed 12% of revenue and 8% of EBITDA in quarter one, FY 26.
In their clarification, they have chosen to word their ban as ‘Temporary’ rather than a more specific ‘2 years’.
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The Debarment may also disqualify them from bidding for other Govt proejcts in India and possibly abroad
I am more concerned if this is an indication of governance issues, the proverbial smoke indicating a fire. Why would the government go for a debarment if it was minor or unsubstantiated?
@shankarnath, are you still tracking this company? Any insights?
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Was the stock under performance of because of action initiated internally and news was available to institutional? Because this stock has under performed in last 1 years even after posting good result. Any Say on this?
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What should be next action for those are invested? Panic selling tomorrow? or waiting for further management actions?
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bls.pdf (1.3 MB)
Clarification issued by the firm. Usual talk about diversified business and growth trajectory intact. Below words are interesting:
“The company is working to resolve the matter. The company views this as a procedural development within the visa outsourcing industry and remains confident of a constructive resolution in due course.”
My question is can these type of orders by MEA are reversed or not. I was also wondering about recent fall of the stock considering the financials. We get the answer now and as always retailers are the bag holders if further issues arise.
Disc: invested
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Even before this, I was really intrigued by the stock performance given decent growth, decent profitability, growth runaway given the increasing proclivity towards foreign travel and their high cash flow conversion. Now I have a feeling it would continue to drift lower for a longer time.
Discl: Invested and planning to hold as of now.
Planning to hold as of now. As was expecting some issues given the growth trajectory in the last few years.
Just curious to know the reason for “planning to hold as of now”
Well, I hope that’s me being 'let me not have a knee jerk reaction and wait a bit to get more clarity on the why’s '.
To be honest, I don’t know if it would prove to be the right decision, let’s see. Besides, the market has already published them for this news on opening bell.
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I’ve had the experience of them nudging me to take the lounge service for the Spain visa. (The big daddy VFS does that all the time).
But this seems more of manipulation, not just nudging to take a premium service. Voices such as these won’t help when they are already in the spotlight for the wrong reasons.
Maybe I should cut my position a bit instead of not selling at all.
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Debarment by Indian MEA from participation in new tenders for a period of 2 years.
Co’s disclosure has very little explanation except that the MEA debarment is ‘procedural’ in nature, India forms only 12% of rev and 8% of EBITDA, and existing business is unaffected.
The following key questions need explanation by management -
- What is the exact (alleged) reason for debarment as per the MEA order? What are the “court cases and complaints by applicants” that has led to the debarment order - as mentioned in the co’s stock exchange disclosure
- MEA might have given a show-cause notice (SCN) before the debarment order. Did co. address issues arising out of such SCN, if any?
- What remedial measures is the co taking presently?
- How does this affect tenders with other foreign govts - both existing and esp. future (w.r.t any impact on pre-qualification for bidding for future tenders of other govts.)
Anyone having any insight will be very helpful.
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Moot questions to ask
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The company has been debarred by Ministry for a span of 2 years. What’s the gravity of the matter - will such action be initiated for minor complaints or is the matter grave enough to let the management know - we mean business.
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Will this action bring about additional action - there is possibility of the Ministry reviewing the allotment of Aadhaar Card Business (2000 Cr)
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How should we as investors react - Buy in this panic / hold / exit.
This is a classic case of Business Vs Jockey.
Should you invest in exceptional business with average or mediocre management
OR
Should you invest in mediocre Business with Exceptional management.
- What are the key monitorable, going forward. How do we know the steps taken by management to address the issues to ensure they donot recur?
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Here’s how I am extrapolating it:
- Impact on EBITDA margin, assuming the company tries to course-correct.
- Impact on new tender wins globally, as debarment might affect their eligibility.
A question I would like to get an answer to: Whether, before the debarment, the company was given a chance to clarify its stance and failed to do so?
Note to self: The quality of your offering matters. If it’s subpar, it will eventually catch up with you.
Disc. : Invested. Not a buy/sell recommendation. DYOR.
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Just wanted to share a quick update and my thoughts on what’s happening with BLS International lately. Yes, the Ministry of External Affairs has temporarily barred them from bidding for new Indian mission tenders for 2 years, but this segment contributes only about 12% of their revenue and will not affect their existing contracts, which usually last 2 to 5 years. The company’s overall business remains very strong, with a proven track record of robust growth. They posted record financials in FY25 with over 30% revenue growth, an 82% jump in EBITDA, and strong profit margins, while their global footprint covers 70+ countries with multiple major contract wins. Management is actively working to resolve the issue and keeps emphasizing the long-term growth momentum. For me, this looks like a temporary hurdle rather than a fundamental problem, and I believe BLS International remains well-positioned for sustained growth and value creation. So, I’m holding with confidence and keeping an eye on the positive signs ahead.
Disc: Invested 5% of portfolio since 2023
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what are the thoughts on exact issues with respect to customer satisfaction?
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I agree. The business of visa processing is an oligopoly and has high barrier to entry. The business is not going to be automated or digitised away. I don’t think any of the major players have good customer satisfaction.
This does look like a temporary situation to me too.
Disc: invested. dyor.
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