A Stock that gave me 150% Return!!!!!

 

In my last post, I had mentioned about “My First Mistake”, where in I had missed out on a few points of my Checklists which had led me to making a loss.

In this post, I will tell you how these Checklists helped me find the “The Right Stock!”

The stock that I am going to be talking about it BLS International Services Limited.

Since Covid happened, I have been focusing on companies which are related to the travel sector and providing any kinds of services that involve the travel theme. This is when I came across BLS International. BLS is into the business of providing Visa Processing Services (including E-visas), Digital Services like E-Governance & Citizen Services, Consular Services &Value Added Services. They are among the top 3 players in this domain. The company is a preferred partner for Embassies and Governments across the world, having an impeccable reputation for setting benchmarks in the domain of visa, passport, consular, e-governance, attestation, biometric, e-visa and retail services. It also provides citizen services to state and provincial governments across Asia, Africa, Europe, South America, North America & Middle East.

It is a recently listed company (2016) and in 2020, an all-time low of Rs. 8 was made by the stock. Until 2020, the company was doing very well fundamentally that is growing revenue, growing profit, growing EPS, good return ratios, margins also at pretty good levels and positive cash flow generating company. The debt levels increased a little in 2017-18 but then were reduced back until 2020.

That’s when I decided to keep it in my watch list. In 2020-21, the company’s revenues halved and gave the same effect to the profitability of the company. Slowly and steadily the revenues started to get better quarterly and that’s when I decided to enter the stock. I also saw that FII’s were increasing their holding every quarter which was a very huge positive for the company. DII’s also taking up exposure since Sept, 2022.

In CY2022 only, the company gave bonus twice (May & Dec, 2022). I am still holding the stock and already got return of 150% and hoping for a better story in the future. They still have a lot of opportunities to cater to:

-          Only 35% of the total visa market is currently outsourced and only BLS has only 12% market share, which leaves a lot of opportunity.

-          Value added services could be a significant margin booster. EBITDA margins are around 15%. VAS accounts for 35-40% of the total contract value which the management expects to take up to 50-60%. Increase in prices of Value Added Services. Customers have started opting for more VAS.

-          For strong presence in Banking Correspondent Business, made acquisitions of Starfin and ZMPL. (Largest Banking Correspondent of SBI).

-          Still at 70% application levels of 2019. Russia and China opening up now.

-          Recent Contract with Poland Govt. Expecting to process 20000 applications annually.

-          Revenue per application has also gone up by 35-40%. Has a mix up of pricing increase and customer demand increase.

-          BLS Insider Acquisition: Promoter Group/Immediate Relatives have started buying shares from open market. Total Value of Buying is 71.92 lacs. (45880 shares) as of 6^th April, 2023.

This is not a recommendation to buy whatsoever.

The stock is currently at Rs. 180 and still I see a better future for the stock.

Happy Investing!!!!!