BLS International (BLS) is a visa & passport processing company and debuted on NSE in June 2016 (earlier listed in Delhi Stock Exchange). It has recently won a five-year Punjab e-Governance project for providing 223 citizen services through 2,147 centers (Seva Kendras).

Valuation & Outlook: BLS’ revenue and EBITDA has grown at a healthy FY13-16 CAGR of 45/34%. In FY16 EBITDA margin stood at 7.3% however based on net revenue basis, the margin is much higher at ~40%. Niche focus, strong execution and an asset light model have enabled healthy RoE of 31% in FY16. We expect the Revenue/PAT to grow at a robust CAGR for FY16-18E supplemented by Punjab e-governance project. We believe that the valuations are attractive, given its potential to deliver super-normal earnings growth ahead and strong return ratios.