| BLS International Services Limited | ||||||
| Long-term rating upgraded to 'CRISIL A+/Stable'; Short-term rating reaffirmed | ||||||
| Rating Action | ||||||
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| Note: None of the Directors on CRISIL Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has upgraded its rating on the long-term bank facilities of BLS International Services Limited (BLS) to ‘CRISIL A+/Stable’ from ‘CRISIL A/Positive’ and has reaffirmed its ‘CRISIL A1’ rating on the short-term bank facility of the company.
The rating upgrade reflects healthy growth in revenue on a quarterly basis, supported by the company’s established market position in the visa services business leading to a healthy traction in revenue. The revenue is expected to increase to Rs 2,200-2,300 crore in fiscal 2025, from Rs. 1677 crores in fiscal 2024; company already booked revenue of Rs. 988 crores till Sept’24. The business risk profile is further aided by healthy operating efficiencies backed by steady increase in the operating profitability, expected at 27-30% during fiscal 2025, with operating margin of 30% till September 2024. CRISIL Ratings believes that the business risk profile of the BLS International group will further improve over the medium term, backed by steady growth in tourism and improved penetration in digital business through on-boarding of new customers and incremental business from recently acquired company iData (acquired in July 2024), whose benefit has already started flowing in from the second quarter of fiscal 2025. However, sustained increase in revenue with stable operating margin is to be monitored.
The ratings factor in the company’s robust financial risk profile, aided by its efficient working capital management and low reliance on external debt. Absence of sizeable, debt-funded capital expenditure (capex) and expected accretion to reserve shall continue to aid the financial risk profile over the medium term. The liquidity was comfortable too, backed by healthy net cash accrual vis-a-vis maturing debt, cushion in bank lines and sizeable unencumbered cash reserve.
The ratings also reflect the established market position of the BLS International group in the visa outsourcing services sector, and its robust financial risk profile. These strengths are partially offset by susceptibility to change in regulations by concerned ministries of various countries and risks related to the growth strategy through acquisitions. |
Analytical Approach CRISIL Ratings has combined the business and financial risk profiles of BLS, BLS International FZE (100% subsidiary of BLS), and their step-down subsidiaries. This is because all these entities, collectively referred to as the BLS International group, are under a common management and have strong financial linkages via equity share capital, revenue sharing, and loans and advances.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers & Detailed Description Strengths:
Weaknesses:
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Liquidity: Strong The liquidity is supported by strong cash accrual, nil bank limit utilisation and prudent working capital management. Expected annual cash accrual of Rs 500-520 crore should cover the incremental working capital expenses, capex or acquisition plans and minimal term debt obligation of Rs 25-28 crore over the medium term. Furthermore, sizeable cash reserve (Rs 950-1,000 crore as of September 2024) and strong networth will enhance the overall financial flexibility of the group. |
Outlook: Stable The BLS International group will continue to benefit from its established market position in the visa services business and its presence across diverse segments including passport, consular and citizen services. |
Rating sensitivity factors Upward factors
Downward factors
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About the Company Established in 1983, BLS is a specialist provider of visa, passport and attestation services to Indian missions across the world. It serves the diplomatic missions by managing all administrative and non-judgmental tasks related to the entire life cycle of a visa application process.
The company was listed on the Bombay Stock Exchange, National Stock Exchange and Metropolitan Stock Exchange in 2016. BLS is present in over 70 countries either through joint ventures with local players or through wholly owned subsidiaries (BLS International FZE and others). |
Key Financial Indicators
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Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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Annexure – List of entities consolidated
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||
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Criteria Details
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