Mehabe score: 2 G Factor: 1 Piotski Score: 8 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 1 and Piotski score of 8.
Description
BLS International Services Limited (BLS), a part of the four-decades-old BLS Group with a global presence and diversified range of services, counts amongst the top three global players in visa application outsourcing, with its presence in visa/ passport/ consular/ citizen services with 62 countries and 36 government clients and provides services through 2,325 offices worldwide.
Main Points
Journey
2005-2010 – Started Visa processing services in niche, untapped market.
2011-2015 – Added seven Indian missions abroad including the prestigious and high volume locations of US and Canada.
2016-17 – Got listed on NSE and BSE and it is the only Indian origin visa outsourcing company in the listed space.
After 2018 – Expanded operations in 11 more cities for attestation services.
It also commenced operations for the Embassy of Vietnam and Lebanon in India.
Company has 5000 Employees and is amongst top three players in the visa outsourcing service industry. It has processed more than 47 million ApplicationsSite:BLS
Market Cap:
Rs 1,282 cr
Price:
125.0
Trading pe:
25.6x
Book-value:
41.8/share
Div yield:
0.80 %
Earning yield:
3.97%
Face-value:
1.00/share
52week high:
135.00
52week low:
40.00
Technical Analysis
Stock trades at 125.0, above its 50dma 108.11. It also trades above its 200dma 95.5. The stock remains bullish on techicals
The 52 week high is at 135.00 and the 52week low is at 40.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
Weakness
– The company has delivered a poor sales growth of -1.08% over past five years.
-Tax rate seems low
-Earnings include an other income of Rs.18.66 Cr.
Competition
– The industry trades at a mean P/E of 33.3x. Happiest Minds trades at the industry’s max P/E of 83.56x. BLS trades at a P/E of 25.6x
– Industry’s mean G-Factor is 3.8 while the mean Piotski score is 9.0. BLS has a G-Factor of 1 and Piotski scoreof 8.
– Average 1 month return for industry is 15.9%. The max 1- month return was given by BLS Internat.: a return of 32.94 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 145.0 cr compared to Rs 151.0 cr for period ended Mar 2020, a fall of 4.0%
Operating Profits reported at Rs 10.0 cr for period ended Mar 2021 vis-vis 7.0 for period ended Mar 2020 .
Operating Margins expanded 226.1 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 2.29 compared to Rs 1.36 for previous quarter ended Dec 2020 and Rs 0.87 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 478.0 cr for period ended Mar 2021 vis-vis sales of Rs 786.0 cr for the period ended Mar 2020, a fall of 64.4%. The 3 year sales cagr stood at -15.4%.
Operating margins shrank to 8.0% for period ended Mar 2021 vis-vis 11.0% for period ended Mar 2020, contraction of 300.0 bps.
Net Profit reported at Rs 50.0 cr for period ended Mar 2021 vis-vis sales of Rs 52.0 cr for the period ended Mar 2020, falling 4.0%.
Company reported a poor Net Profit CAGR of -19.8% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 12.0% compared to 18.0% over the last 3 Years. – The stock has given a return of 189% on a 1 Year basis vis-vis a return of -9% over the last 3 Years. – The compounded sales growth on a TTM bassis is -39% vis-vis a compounded sales growth of -15% over the last 3 Years. – The compounded profit growth on a TTM basis is -4% vis-vis a compounded profit growth of -20% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 1.22% vis-vis 2.13% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 24.03% vis-vis 23.2% for Dec 2020
Conclusion
– is almost debt free. – The company has delivered a poor sales growth of -1.08% over past five years.
-Tax rate seems low
-Earnings include an other income of Rs.18.66 Cr.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 108.11 and is trading at 125.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
