I think many of my friends are concerned about customer satisfaction.
I would like to share my recent experience with VFS for a Sweden visa — it was not satisfactory. There was unnecessary waiting and a limited number of staff available.
In such businesses, I believe management of government relations is more important than customer satisfaction from an investor’s point of view.
I am not sure how serious or deep the current debarment issue is, but I think the business itself is strong and has high entry barriers. No lower circuits after this issue demonstrates the strength of the business.
The company generates a ton of cash which cannot be efficiently reinvested into core business. Having said that they are also cognitive of not burning money into businesses with poor return ratios. If they wanted that,
they could have easily reinvested all this money to BLS e services but they chose to spin off the business.
All their acquisitions were deep value buys.
Current one is bought at 2 times sales.
In terms of synergy I think they are trying to cater to ultra high networth individuals.
There is debarment by Indian MEA from participation in new tenders for a period of 2 years.
It is possible that this tender was from earlier application..
There may be some other tenders also which will be under process for approval and will alloted to them in future..
Regardless of the circumstances, those who sold their shares below 300 should take this as a lesson. Never let market noise or short-term sentiment shake your conviction in a fundamentally strong stock unless there’s genuine cause for concern.
On paper and in Excel, the growth story looks almost too good to be true, but as investors it’s important to stay cautious. The MEA issue doesn’t directly affect their financials, but it does raise concerns around service quality and governance.
The recent hotel acquisition seems irrelevant to the core business, and BLS E-Services is seeing margin pressure due to the lending buis of AadleFi.
Yes, the company could potentially reach around ₹1,000 crore PAT by FY28, with the visa segment alone contributing ₹770 crore PAT assuming 10% growth. But for investors to actually make money, we need to see sustained growth in the visa business, since that’s what would drive a re-rating.
The hotel acquisition only complicates valuation and raises questions about capital allocation. Similarly, the earlier AadleFi acquisition (through the e-services arm) brought in a lending business that doesn’t really align with the company’s otherwise straightforward visa operations and just complicates valuing business read some broker reports of bls-intl all of them are valuing it differently some on sotp and some on ebita multiple and having a loan buis just puts other params to track and see, same goes for hotel. if they add other hotels soon we would need to create sotp of revpar ev/ebita etc
All these concerns are genuine and should be considered seriously, cheap can always get cheaper.
adding to this, the recent china tender is interesting considering during concall it was mentioned china was contributing a good before covid, I couldn’t check how much china contributed but could be good if relation with china improves overall
Disclosure: Trimmed my position earlier to 4.3% at breakeven. Will only consider increasing allocation if visa growth revives and capital deployment becomes more disciplined around visa buis.
Yes and I think even in the loss of capital, we need to analyze correct reason first and then to take decision of Sell or Buy.
Still in depth information is not available for debarment.
Due to PE derating. PE re-rating was swift in the past few years and priced in some future EPS aggressively, then the multiples were stagnant for sometime and now due to this MEA news there is decrease.
How genuine is this report calling for blacklisting BLS? Aren’t these shortcomings part of a comparatively large organisation like BLS. Or are they really disturbing?
I dont think that debarment by one organisation automatically leads to cancellation of running contracts. The news item appears to be motivated or maybe its by someone who had received a real bad treatment while availaing their services. However, it certainly does one thing, it highlights several instances of poor quality service delivery and customer dissatisfaction in many contracts managed by BLS.
Outsourcing of services traditionally delivered by Govt to private entities in lieu of a service charge is there to stay. It has improved service delivery and satisfaction levels by leaps and bounds. However, these services are typically monopolistic and when private entities gain access and control to these services/delivery channels they try to maximise their returns, often reducing customer satisfaction. Systems will evolve to one’s where customers have a better say. Govt and the service providers will gradually be more senstitive to these needs (or the model will die).
Passport sewa kendras operated by TCS have better service delivery than the services offered by BLS in their contracts (both contracts are managed by MEA).
BLS has shown that it has the ability to win contracts, establish the centres/service delivery points and successfuly operate them in a government setup. This competency which they have developed is not easy to master. However, I “hope” that they will also get better in improving their customer satisfaction (“hoping” that they improve is the risk I am taking in holding their stocks).
What do folks here think of 84 Cr spend on buying Treffedian hotel?
To me looks like a bad corporate governance move to buy a hotel with no clear explanation on how this fits into company’s overall strategy. On the conference call also management was continuously defensive
It’s a Bad capital move surely but also a very small amount relatively speaking. Their capital allocation is definitely questionable and that’s probably why they are trading cheap outside of MEA issue. I am still invested because they are also generating so much cash and hopefully, the promoters understand the market’s opinion of their moves and course correct. IF they do not, I would exit, personal opinion.
