Nuvama Recommends BLS International Services: A Multibagger Stock with 60% Upside Potential
In a bold move, brokerage firm Nuvama has issued a ‘buy’ call on BLS International Services, a leading player in the global visa outsourcing and consular services sector. Nuvama has raised its target price from ₹604 to ₹637, indicating a potential upside of approximately 60%. This optimistic outlook follows the company’s robust financial performance for the third quarter of the fiscal year 2025, which was announced on February 11.
Strong Q3 FY25 Financial Performance
BLS International reported impressive growth in Q3 FY25, reinforcing its position as a strong player in the market:
- Net Profit: The company recorded a 43.2% increase in net profit, reaching ₹121 crore compared to ₹84.5 crore in the same period last year.
- Operational Revenue: There was a 17% growth in operational revenue, amounting to ₹513 crore, up from ₹438 crore in Q3 FY24.
- EBITDA Growth: EBITDA surged by 78.5%, reaching ₹158.1 crore compared to ₹88.6 crore in the corresponding quarter last year.
- EBITDA Margin: Improved significantly to 30.8% from 20.2% year-on-year, driven by the shift from a partner-operated model to a self-managed approach and the integration of newly acquired businesses.
This strong financial performance has led Nuvama to revise its EBITDA estimates for FY25 and FY26 upwards by 6% each. Consequently, the brokerage firm maintains a ‘BUY’ recommendation on BLS International.
Strategic Acquisitions Fueling Growth
BLS International’s strategic acquisitions have been key drivers of its robust growth and market expansion. In the first half of FY25, the company made several strategic acquisitions:
- iDATA, Turkey: Acquired in July 2024 for ₹720 crore, this acquisition expanded BLS’s footprint in Turkey and other European markets.
- Citizenship Invest, Dubai: Acquired in October 2024 for ₹260 crore, enhancing its service portfolio in the Middle East.
- SLW Media, India: Acquired in October 2024 for ₹0.8 crore, aimed at strengthening digital service offerings in India.
These acquisitions have not only expanded BLS International’s global reach but also diversified its service portfolio, positioning the company for sustainable growth in the rapidly evolving visa and consular services market.
Robust Cash Position and Capital-Light Model
As of December 31, 2024, BLS International maintained a net cash balance of ₹690 crore, even after its recent acquisitions. This strong cash position underscores the company’s efficient cash-generating capabilities and prudent financial management.
BLS International operates a capital-light and cash-generating business model, which enhances profitability and allows for strategic expansions. As the only listed Indian company specializing in global visa processing and Government-to-Citizen (G2C) services outsourcing, BLS International is uniquely positioned to capture growth opportunities in this niche sector.
Nuvama’s Positive Outlook
Nuvama’s analysis highlights BLS International’s consistent operational performance, its asset-light business model, and its status as a leader in the global visa processing industry. The brokerage firm noted:
“Its operational performance aligned with our estimates. It posted a record high quarterly revenue. As the only listed Indian company in global visa processing and G2C services outsourcing, BLSIN operates a capital light and cash-generating model, with strong growth potential. New visa contracts and an expanding digital services network can further enhance profitability. Its strong track record of acquisitions continues to broaden its market reach and service portfolio.”
Nuvama’s upward revision of the target price to ₹637 underscores its confidence in BLS International’s ability to capitalize on growth opportunities and deliver sustained profitability.
Company Overview: BLS International Services Ltd.
Founded in 2005, BLS International Services Ltd. is a trusted global tech-enabled services partner for governments and citizens. The company has established a strong reputation in the domain of visa, passport, consular, citizen, e-governance, attestation, biometric, e-visa, and retail services.
Operating in 66 countries and serving 46 government clients, BLS International has processed over 65 million applications to date. Its diverse service portfolio and global reach have positioned it as a leader in the visa processing and G2C services outsourcing market.
Financial Highlights
Below is a summary of BLS International’s key financial metrics for Q3 FY25:
| Metric | Q3 FY25 | Q3 FY24 | % Change |
|---|---|---|---|
| Net Profit | ₹121 crore | ₹84.5 crore | +43.2% |
| Operational Revenue | ₹513 crore | ₹438 crore | +17% |
| EBITDA | ₹158.1 crore | ₹88.6 crore | +78.5% |
| EBITDA Margin | 30.8% | 20.2% | +10.6% |
Conclusion: A Promising Investment Opportunity
BLS International Services’ strong financial performance, strategic acquisitions, robust cash reserves, and capital-light business model position the company well for future growth. With Nuvama’s revised target price suggesting a 60% upside, investors looking for a multibagger stock may find this an opportune moment to consider adding BLS International to their portfolios.
With its unique market positioning as the only listed Indian company in the global visa processing and G2C services outsourcing sector, BLS International is set to continue its growth trajectory, making it a compelling choice for investors seeking long-term value.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.