Ladies and gentlemen, good day and welcome to BLS International Services Limited Q2 and H1 FY 2027 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Deepali Kumari from Arihant Capital. Thank you, and over to you, ma'am.
Thank you. Good evening, everyone. Thank you all for joining the Q2 H1 FY 2027 earnings call of BLS International Services Limited. Before we proceed, let me remind you that the discussion may contain forward-looking statements that may involve known or unknown risks, uncertainties, and other factors. It must be viewed in conjunction with the company's business risks that could cause future results, performance, or achievements to differ significantly from what may be expressed or implied by such forward-looking statements. From the management today, we have Mr. Nikhil Gupta, Managing Director, Mr. Shikhar Aggarwal, Joint Managing Director, and Mr. Amit Sudhakar, Chief Financial Officer. I would like to hand over the call to Mr. Shikhar Aggarwal for his opening remarks, post which Mr. Amit Sudhakar will discuss the financial performance of the company, and then we will open the floor for an interactive Q&A session.
Thank you, and over to you, sir.
Good afternoon, everyone, and thank you for joining us for BLS International's Q2 and H1 FY 2027 earnings call. I hope you've had a chance to go through our results and investor presentation. We have had a good first half, with both businesses contributing to growth. In Q2, revenue reached a record INR 973 crore, an increase of 32% over last year. EBITDA grew 17% and PAT by around 10% for H1. For H1, revenue was up 29% and EBITDA grew by 20%. The margins in both businesses remain healthy. The movement in the consolidated margin is mainly because digital business now makes up a large share of our revenue, following the consolidation of Atyati. I will leave the digital financial explanation to Amit. We also crossed around 500 million applications processed globally during the quarter.
It is a significant milestone for our team and reflects the scale of the platform we have built over the years, with operations now spanning more than 100 countries. In Visa and Consular Services business, we continue to perform steadily. Q2 revenue and EBITDA both grew by 11% year-over-year, with EBITDA margin of about 42%. For the first half, segment revenue was around INR 1,070 crore. We processed around 11 lakh applications in Q2. Net revenue per application increased by 10% to INR 3,553. This was supported by better pricing on new contracts and higher contribution from value-added services. It is encouraging to see revenue per application improving even as volumes vary across markets. We remain focused on improving operational efficiency, growing self-managed operations, and maintaining service quality. We are actively participating in tenders across Europe, North America, and other markets.
We will share updates on new contracts once they are finalized. In digital services, the company continues to grow strong. Q2 revenue increased by 66% to INR 463 crore, and EBITDA grew by 67% to INR 34 crore. The growth came from our BC business and loan distribution business, as well as full quarter contribution from Atyati. Our BC business recorded GTV of around INR 41,400 crore in Q2 and over INR 70,900 crore in H1. Loan disbursements were over INR 9,500 crore during the quarter. At the end of September, our network has more than 188,200 touchpoints. We also continue to expand our citizen services work. This includes operating Aadhaar Seva Kendra under the UIDAI contract and supporting more than 1,000 government citizen services through our technology and last-mile network. Atyati adds banking technology, financial inclusion, and micro-lending capabilities to this business.
Our focus now is on integrating the platform and using our wider network to create further opportunities. Alongside business growth, we have continued to invest in capabilities and systems needed to support our expansion. During the quarter, we achieved CMMI Maturity Level 5 certification and continue to maintain our ISO certification for quality and information security. We are also investing in AI, automation, and secure technology to make our services more efficient and reliable. We have strengthened our global advisory board with the appointment of former Estonian president as our global strategic advisor. This follows the earlier appointment of different strategic advisors. We were also certified a Great Place to Work in India in September. Alongside this, we are investing in AI-focused training and upskilling so that our people are ready for the changes in our business.
I now hand over the call to Mr. Amit Sudhakar, our Chief Financial Officer, to take care of the financials.
Thank you, Shikhar. Good afternoon, everyone. I will take you through the consolidated financial performance for the quarter and six months ended 30th September 2026. For Q2, consolidated revenue was INR 973 crore, up 32% from INR 737 crore last year. This is the highest quarterly revenue we have recorded. EBITDA increased by 17% to INR 248 crore compared to INR 213 crore in corresponding quarter. The EBITDA margin was 25.5% compared to 28.9% last year. This is mainly due to the changing revenue mix. Digital service is growing faster and now contributes a large share of revenue, but its margin is lower than the Visa and Consular Services. Both businesses continue to maintain healthy segment margins. For H1 FY 2027, revenue was INR 1,863 crore, up 29%. EBITDA grew by 20% to INR 500 crore, with a margin of 26.9%.
PAT was INR 403 crore compared to INR 367 crore in the last half last year, an increase of 10%. Visa and Consular Services contributed about 52% of the revenue in Q2, while digital service contributed about 48%. A year ago, the mix was 62% and 38% respectively. In terms of EBITDA, Visa and Consular Services contributed about 86%, with digital service contributing the remaining 14%. This show how quickly the digital service is scaling up. Visa and Consular Services continues to contribute the larger share of the profit, while digital is expanding our reach and adding new growth opportunities. Visa and Consular Services segment Q2 revenue was INR 510 crore, up 11% from INR 459 crore. EBITDA also grew by 11% to INR 214 crore, with a margin of 41.9%.
For first half, segment revenue was INR 1,070 crore, up 16%, and EBITDA was INR 440 crore, also up 16%. EBITDA margin was 41.1%.
Net revenue per application for the first half was INR 3,537, up 11%. Digital segment revenue for Q2 was INR 463 crore, up 66% from INR 278 crore. EBITDA grew by 67% to INR 34 crore from INR 21 crore, with a margin of 7.4%. Growth was driven by business correspondent and loan distribution activity, along with full quarter consolidation of Atyati. For H1, revenue was INR 793 crore, up 50%, and EBITDA was INR 61 crore, up 57%. The margin improved to 7.7% from 7.4% last year. As we integrated Atyati and offer more services through our network, we see scope of improving the margin over time, while recognizing that digital service has a different margin profile from Visa and Consular Services. The balance sheet, the company has a healthy net cash position of INR 1,665 crore as on 30th September 2026.
We will continue to deploy capital carefully with priority given to opportunities that strengthen our existing businesses or add complementary capabilities. During the current quarter, ICRA rated the company to AA- for the long term and A1+ for the short term. This reflects the growth of our financial position. We remain well-placed to support our growth plan through investment in our businesses, technology, and selective strategy opportunities while maintaining financial discipline. With that, I will hand over the call to the moderator for the question and answer session. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Preetam Kamaji from Purnartha Investment Advisors. Please proceed.
Hi. My first question is related to net revenue per application. Now, as most of the transition is complete, what growth is company expecting in net revenue per application going ahead?
The current net revenue per application basically means the direct cost which we incur against the revenue which we earn. This basically is a cumulation of all the business we are doing globally at different countries, and it varies country to country. As the new contracts are coming at a better pricing and we are adding new services, we see this growing at 5% to 6% per annum.
Okay, great. I have one more question. In the PPT, it was mentioned that till FY 2030, we were targeting like 22%-25% revenue growth. Can you also give split of how much growth are we targeting in visa and how much growth are we targeting in digital business?
Actually, we missed out. Can you repeat your second question?
Yeah, yeah. Actually, in PPT, I saw that we are targeting growth of 22%-25% till FY 2030. I just wanted to understand how much growth are we expecting in visa business and how much growth are we expecting in digital business?
I think it will be approximately what we anticipate over the time is going to be between 60%-65% to be your visa and the balance from digital business.
Okay, okay. Got it. Also, the margin guidance given was like target guidance was 28%-30%, but as digital business has lower with the margin, are we expecting some kind of margin expansion in visa business to bring overall margin back to 20%-30% range?
It will basically depend on the mix of both the businesses at that particular time. If you see this quarter also, our consolidated EBITDA margin are around 25.5%.
Right, right. So basically to bring it back to, like bring it to 28%-30% range, are we expecting margin expansion across Visa and Consular Services or digital business will bring margin expansion?
We believe Visa and Consular Services business is at its, has been stabilized at around 38%-40%, and scope is there to improve in the digital business going forward.
Okay, okay. Thanks, that was very helpful. All the best and wishes for the upcoming festival. Thank you.
Thank you.
Thank you. The next question is from the line of Shreya Kejriwal from Moneyvesta Wealth Management. Please proceed.
Yeah. Firstly, congratulations on your results. My question was regarding the number of applications. If we check year-over-year, it is 3% down. What drove it? Was it something specific country-wise or any demand issue? My second question was regarding the visa revenue. It is also down 9% quarter-on-quarter. Was that seasonal?
Yeah. First, there was a down in the numbers, mainly last year versus this year because of the geopolitical situation in the Middle East. You are right that our number in Q1 are the highest, and then it is a seasonal impact which we see in the Q2 and Q3, and then again it starts going up, which is a seasonal. Every year it has that seasonal impact.
It is based, particularly in Q2, you are talking about like there is a seasonal impact other than the geopolitical tension. Okay.
That is right.
Thank you. Yeah. Thank you, sir. That is it.
Thank you. The next question is from the line of Arjun Shah from Aran Investments. Please go ahead.
Two things in particular. The Spain issue, if there is any development on that.
Mr. Arjun, we cannot hear you properly. Can you please come closer to the device?
Yeah. Hold on. Hello? Is this better?
Yeah, please continue.
Yeah. Could you shed some light on the Spain issue, if there are any more developments there, or are we still in the clear? Have you heard anything about that? Also about Slovakia. I think we had some issues with Slovakia and Vietnam and a few other countries. So do we still have a global sort of
I think, first of all, we have clarified in our investor presentation also, there is no issue with Spain, neither there was. Slovakia also, there is no issue anywhere. Vietnam also, there was no issue. The articles, if they keep on coming, we cannot comment on that. But with our client governments, we have no issue. We have clarified that also.
Oh, okay.
Thank you. A reminder to all participants, anyone who wishes to ask a question may press star and one on their touchtone telephone. I repeat, anyone who wishes to ask a question may press star and one on their touchtone telephone. The next question is from the line of Viren Deshpande from Alphapeak Investments. Please go ahead.
Hello, sir. Good afternoon. We had decent results, and we have been posting consistently decent results over last many years. Due to high base, I think the growth rates have tapered off a bit, but we still continue to grow in double digits. But it is surprising that the company doesn't get the discounting which it should get in the market, considering the business moat and technological edge, as well as our experience, and being the only listed company in this space, because the leader is not listed anywhere. What might be the reason for that? Because we also have cash. We have been applying it quite well. Our ROE is good. But our subsidiary, BLS E-Services, which is a digital business, which is having low margins of about 6%-7%.
Our business is, Visa and Consular Services business is having margin of around 40%, and high cash generation also, negative working capital. But what is the reason you feel that the company is not getting the real valuation it should get? Hello?
Ladies and gentlemen, the line for the management got disconnected. Please stay connected while we reconnect them.
Yeah. Hello?
Hello? Can you hear us?
Hello? Hello?
Viren, can you hear us?
Yes, yes. I am in a position to hear now. Hello? Hello?
Ladies and gentlemen, the management is back online with us. You may continue, please.
Hello, sir. Should I repeat my question? Hello?
Viren, can you hear us?
Yes, yes. I'm in a position to hear you. Am I audible now to you?
Yeah, we can hear you well.
Yes. Should I repeat the question?
Whatever we heard, I will just try to respond to that. If something I have missed out, you can let me know.
Okay.
Viren, we are focusing more on the performance of the company and are trying to maintain our growth, what we have been doing to continue the growth path on which we are. Market, sometimes we are not aware of and how it works. We will not be able to give any comment on how the market and how they value it. Maybe you know better how they do it.
No, actually, sir, with due respect to you, our performance has been really good. With the strong moat and technological thing which we have, our company should have commanded a very good premium. But the BLS E-Services company listed is getting very good discounting, whereas our company is getting very low discounting, which is a low-margin business, 5%-7% margins. Here it is 40%. But in this business, we have a very strong moat. But okay, that as you mentioned, market may correct itself whenever it wants. But I wanted to know one more thing. Regarding this, in the annual report also I read about how e-visa, I think, is being the trend in few countries. So, whenever these e-visa applications rise, does it affect our revenue per application and profitability?
No. As we said that many countries are doing different models. The countries that we are working with currently continue to operate on the model that we are operating, and we are continuing to assist the countries in different kind of models. So, we are growing as a company. The countries where we provide services don't have e-visa.
But if at all they shift towards e-visa, it will affect the revenue per application because the cost will be lower, et cetera?
There was no biometric five years back, as we have answered this. You have seen the last eight quarters, last four, five years, it continued to grow. We will maintain our growth.
And another question is regarding this outsourcing, it is going to grow in a big way as per wherever we have mentioned that we hope to grow in our double digits minimum. And now this outsourcing, whenever it increases, which are the countries where we have made any fresh bids for that? Because some new contracts were expected, no?
No, all over Europe and different parts of the world. As and when it is finalized, we continue to announce results, as we have announced in the past.
So, is it expected in due course of time, or it will take more time to get some new contracts?
Due course of time. We recently announced, this year only we announced big wins with Portuguese government, Poland government. We won a INR 2,500 crore Aadhaar contract that we are deploying. So, we continue to win and deploy contracts.
Currently you are working with 46 governments.
Correct.
That number is expected to grow this year any further?
Yes.
More countries are likely to be added?
Yes.
Okay. Regarding this, as you mentioned, none of the countries where unnecessary allegations were made against BLS are true and nothing holds merit in those things.
Yeah, that we have clarified.
Yes, you have clarified very well that nothing, court has not indicted you at all in Spain also. That is good thing.
No.
Okay. Thank you very much and all the best.
Thank you.
Thank you. The next question is from the line of Rohan from Arihant Capital. Please go ahead.
Hello, sir. My question is on the digital service side. How much of the growth which we have seen in the last quarter is due to credit facilitation? Also, can you also provide, like, if you have any stress testing done on the loan origination book, sir?
Rohan, we had our investor call for the digital business today morning. As far as stress test is concerned, these loans are not sitting on our books. We are only processing, and upon processing, we are earning the commissions. There is no stress test required as far we are concerned.
Got it. Sir, on the Q2 volumes, which we see around 10.9 lakh with net revenue per application of about 10.2%. With the volume growth we have seen, you have guided us in stable. What contract wins or pricing actions would drive the next leg of Visa and Consular Services growth, sir? Do we expect to reach beyond 12%-15% of our revenue, sir?
So, that's what our target is, to reach and continue growing at minimum 15%. That will come on the back of the travel industry's growth plus our value-added services and the other revenue, and the new contracts which we'll won. So, that will contribute to this 15% growth.
Okay. Got it. On the tender pipeline side, you've guided for around $1 billion-$2 billion of tender pipeline. So, what has converted since then, since the time you've guided then? How does we defend our win rates against the RFPs, particularly on first-time sourcing tenders where incumbency matters less, sir?
So, we continue to win contracts. We won contracts with Slovakia government, Italy government, Portugal, Poland, Germany in the last one year. We've deployed those contracts. Those were all first-time contracts that we won with these governments. We've also won a contract with the Aadhaar UIDAI for INR 2,500 crore. So, we continue to win tenders, and as and when results get announced, there are a lot of opportunity in the market, and we are continuing to maintain our growth trajectory as you have seen. So, I think from our point of view, we are working on tender win, maintaining our existing clients, M&A, et cetera. So, I think cost efficiency. We are focused on all the aspects of the growth of the company.
And sir, do we have any number on the first-time tenders you've told currently? So, how much of these pipeline in numbers have been converted, sir, if you can provide us that number?
Honestly, I did not understand your question properly. You are talking about first-time outsourcing with the government?
Yeah. First-time outsourcing tenders which you saw, like you received good-
We already started working with the Philippine government, that was the first time. German government was the first time. Brazil government was the first time. So, many governments were the first time.
Got it, sir. Okay, sir. Got it. Thank you very much, sir. That answers my question.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the queue, please limit your questions to two per participant. Thank you. The next question is from the line of Chirag Patel, an individual investor. Please proceed.
Hi, sir. My question is regarding to buybacks. Why are we not doing any buybacks? We have a substantial cash in our balance sheet, right? Why are we not deploying it?
See, as we have explained, we are using our cash for the expansion of the existing business and for few M&A opportunities which we have in the pipeline.
Yeah. I understand, sir, that for acquisition. Why our own company is giving 29% ROE, and it is selling at dirt cheap price, I would say. Then why are we not deploying it, buying back our own company rather than acquiring some other company that might give 15% ROE?
This is something which we will be. Last time also we said we will be discussing with the Board, and Board is going to take a call on it.
Okay. But sir, two quarters ago you said the same thing, about six months ago.
I believe in this financial year they will take that call, I believe, Board will.
Okay. Thank you.
Thank you. The next question is from the line of Ravi Naredi from Naredi Investment. Please go ahead.
Thank you very much to give me the opportunity. Sir, I think margin fall will be more due to digital services is rising in our top line in compared to visa services. Is it correct?
Yes, currently it is correct because of the acquisition which we did. So that has changed the mix in the current quarter.
Okay. And sir, after acquiring of a London hotel, our share down drastically. So, will you revise this decision to have hotel business or not?
See, we have explained it last time also that we are not going to invest further till we see the performance of the existing one for a year or two, and then we will take a strategic decision whether we should go into this or not.
Any specific reason we went to hotel business in compared to visa business or digital business?
See, we have explained it when we did the acquisition last year that we wanted to see whether we wanted to be part of the travel industry, and there was a synergy with the travel agents. So we thought we will experiment with this and then take our next call after running. They are running well, all of these ones which we have purchased, but we want to see whether they adds to our strategy or not.
Okay. Any buyback plan of shares as our share down drastically and we have sufficient cash balance in our pocket?
No, it is there on the list and we are discussing that with the Board, but let's see when we take a final call, we'll come back.
Because if you take decision later, share price will fall more drastically. If you take it on the time, it will be good for us. That is my request.
Sure. We'll take into account.
Thank you.
Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Sir, are you there?
Okay. I think to sum up, we have made good progress in the first half of FY 2027. Both businesses are growing and we continue to invest in technology, people, and the operating capabilities needed for the next growth. Looking ahead, our FY 2030 ambition is to reach revenue of INR 6,300 crore-INR 6,500 crore, with an annual revenue growth of 22%-25% and EBITDA margin of 28%-30%. We plan to get there by growing our existing visa business, winning new contracts, expanding adjacent services such as iDATA and Citizenship Invest, scaling digital services and G2C activities, using our networks more effectively, investing in technology, and pursuing selective acquisitions when they add capability. Thank you, everyone. And wish you a very, very happy Diwali.
Thank you.
Thank you.
Thank you very much. On behalf of Arihant Capital Markets Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.