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Bls International Services Ltd
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Ladies and gentlemen, good day, and welcome to the BLS International Q1 FY '22 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Kanav Khanna from Christensen Advisory. Thank you, and over to you, sir.
Thank you, Dev. Good evening to all the participants on this call. Before we proceed to this call, let me remind you that the discussion may contain forward-looking statements that may involve known or unknown risks, uncertainties and other factors. It must be viewed in conjunction with our businesses that could cause future result performance or achievement to differ significantly from what is expressed or implied by such forward-looking statements. Please note that we have made the results and the presentation, and the same are also available on the company's website. In case you have not received them, you can write to us, and we will be happy to send it over. To take us through the results and answer your questions today, we have the top management of BLS International represented by Mr. Shikhar Aggarwal, Joint Managing Director; and Mr. Amit Sudhakar, Chief Financial Officer. We will start the call with a brief overview of the quarter gone past and then conduct Q&A. With that said, I will hand over the call to Mr. Shikhar Aggarwal. Over to you, sir.
Good afternoon, everyone. I welcome you all to our earnings conference call of Q1 FY '22. Hope all of you and your family are safe and in good health. Let me now give you an update on the global travel scenario. During the first and second wave, revenue from Visa business were muted, but with aggressive vaccination drives from all major countries, the travel business has started showing traction with the opening up of U.S., Europe, Russia, China, U.K., Canada, et cetera. All these markets are opening up in a phased manner with specified COVID norms. People are willing to travel after fast pace immunization drives globally. According to an American Express poll, 56% of people are ready to pay for travel, 86% of the Indian respondents and 70% of the Canadian respondents want to plan a trip with either their friends, family or partner. Countries globally are incentivizing travelers with subsidies in travel state and other innovative schemes to revive travel. Also now vaccine travel is taking over as countries like Russia are providing vaccines to the foreign tourists. So in general, the mood for travel is upbeat, and we hope the immunization program will speed up the travel momentum. The effect of this development is yet to flow in our revenue substantially. But we are seeing a good traction with essential visa requests coming in, and our next quarter results should see revenue addition from the visa vertical, other things remaining the same. Our financial performance of the company, despite a challenging global scenario, we have managed to post healthy performance during the quarter. Our revenue during the quarter stood at INR 180 crores, up 2.5x year-on-year. EBITDA stood at INR 18.8 crores, up 5x year-on-year and PBT at INR 20.8 crores, up 4.5x year-on-year. The revenues during the quarter were mainly contributed by the consular, citizens and banking corresponding business, which have already started operating at pre-COVID level. The shortfall in revenue from the Visa business was compensated to the major extent by higher revenues from our other segments of the business. On the profitability front, we have realigned our expenses in line with business operations and share of additional services have improved significantly in the last few quarters. So we expect improvement of margins with the resumption of visa services and countries opening up their borders. Travelers are now trying to minimize physical interaction at the visa application center by opting for convenience services such as Mobile Biometric, Premium Lounges, Primetime Submission, Courier, et cetera, which is definitely a moat to our business. On the new business front, in QY -- FY '22, in the state of Uttar Pradesh, we rolled out 10,000 citizen service centers, which would provide 360 G2C services covering all state departments on behalf of the Uttar Pradesh government. We were also awarded a contract for e-Mitra Kiosks for Rajasthan for 5 districts, including Jaipur, Alwar, Ajmer, Jodhpur and Nagaur, in which we have already launched an online portal for operators where in a mix of G2C and B2C services are available. On the domestic front, we are utilizing our network in Tier 2 and Tier 3 regions by initiating assisted e-commerce services. We have partnered with noted e-commerce players to provide last-mile delivery in semi-urban and rural areas of India, wherein customer acquisition, delivery and realization is a challenge for these times. Talking about the balance sheet. It continues to remain strong with 0 debt and cash and bank balance to the tune of INR 304 crores effective this quarter. We are constantly at the lookout for relevant acquisitions, opportunities adjacent to our line of business. In a couple of cases, we have found the right candidates, but the valuation did not justify the acquisitions. We are wary of the fact that cash on books is increasing, and we should be able to come with you with a specified plan on how we should put that to you shortly. Thank you. This is all from my side. I'll now hand over the call to Amit for updates on the financial performance.
Good afternoon, everyone. Let me take you through the financial performance for the first quarter of the financial year '21/'22. We reported a revenue of INR 178.5 crores, a healthy increase of 242% Y-o-Y and 23% Q-o-Q, mainly due to increase in revenue from non-Visa businesses. The revenue during Q1 FY '22 was contributed by consular, citizen service and banking correspondent businesses, which have started functioning at pre-COVID level. At EBITDA for the quarter stood at INR 18.8 crores compared to EBITDA of INR 3.2 crores in corresponding quarter last year and INR 10.1 crores for Q4 FY '21. Higher EBITDA was achieved mainly due to increase in revenue and cost optimization and this in spite of an increase in employee costs. Even after a decline of around INR 4 crores in other income, the company generated a PBT of INR 20.8 crores for Q1 FY '22 as compared to INR 15.6 crores in previous quarter. PBT margin stood at 11.4% in Q1 FY '22 versus 10.2% in Q4 FY '21. PAT stood at INR 20.3 crores in Q1 FY '22 against a loss of INR 80 lakhs in Q1 FY '21. PAT margin in Q1 FY '22 was declined Q-o-Q. As you could remember that during Q4 FY '21, company had received a credit -- tax credit of INR 5.6 crores from U.K. government and there was a reversal of tax provision of earlier quarters. As I conclude, the key takeaway is that BLS has a unique business model, and the performance in this quarter is clearly an indication of the fact that the business is not just dependent on the Visa business, and other services are increasingly contributing higher revenues. We believe once the travel around the world starts, the incremental revenue from Visa business will propel the financial performance in this fiscal. I would now request the moderator to open the call for Q&A. Thank you.
[Operator Instructions] The first question is from the line of Akhil Hazari from RoboCapital.
Hello. Am I audible?
Yes, Akhil. Please go ahead.
So according to the Q4 FY '21 con call, the management had mentioned that we'll be doing numbers -- revenue figures close to 2019. And with the numbers out for Q1 FY '22, it looks like you're on track to do such figures. I just want to know, does that provide you with any visibility for revenue figures in 2023, 2024. Any revenue projections or growth numbers that you could give us?
Yes. Thanks, Akhil, for this question. See, as we discussed last time that the world across the globe, boundaries are -- borders are opening up, we have seen encouraging results. Government has started giving visas for certain categories. We have already seen the appointments for those categories are full. They have been cautious right now. So we have seen numbers coming up. I think in the next few quarters, visa numbers should come more. There is a huge pent-up demand. There is a revenge travel that is expected. Definitely, first quarter gives us encouraging results wherein the visa numbers were not there that much going forward. We expect the revenue to be in addition to this revenue whatever we have already achieved. Talking about 2023, '24, definitely, we feel the revenue figures will be at a different height with our existing organic business and also with the new business that is expected to come into the company.
Okay. Fine. Great. My second question is that during your latest management interview, you had mentioned top 3 -- that the BLS International among top 3 international companies in the passport and consular services. So I just want to know which are the other 2 companies that you're competing against?
Correct. So we are the only Indian company in this business globally. Other companies, there is 2 companies. One is a company called VFS Global and the other is TLScontact.
Okay. Fine. And my last question regarding the Punjab government and UP government contracts, could you just tell me the tenure of these contracts? And after the contract expires, can you renew it with the government?
Correct. So there is always clauses in the tender for extensions. Right now, Punjab government contract is for more than -- for 5 years, and UP government contract is also for 5 years. So whenever the contract ends, there is a lot of clauses for extension. And also renewal, I don't know exactly how we can renew, but there's clauses for extension and then there is a rebid definitely.
[Operator Instructions] The next question is from the line of [ Mukesh Keswani ], who is an individual investor.
I would like to know the revenue stream for the different verticals, if you can share that information.
See we normally have a 1 segment, which is visa and allied services. But if you see overall, we do visa and consular services. In the current quarter was about INR 160 crores. And the other -- this Punjab and Business Correspondent business was around INR 18 crores also.
And the second question that I would like to know is, when would the revenue from the other [ players ] that you have had with Amazon and Flipkart and other -- the one -- recent one with the Singapore government on the certificates? When will that income start flowing in?
Correct. So see, we have -- as you know, we have tied up with the Singapore-based company for digital health certificates. So as and when Singapore government allows travelers to come in and go out of the country, the revenue starts coming in from that aspect. Regarding our tie-up with different e-commerce players that we have done, we are deploying our offices across India. As we said, in UP, we've opened 10,000 offices. Slowly, slowly, we are just started realizing some revenue out of those. We've started some services. So as time progresses, I think revenue should start coming in from these new services.
The last question on this. So for the next financial year, what is the portion on that you expect from these 2 newer areas?
See, these new businesses are in a very nascent stage. So if you see as a percentage, they have to double. 100% growth needs to be there in these. But if you are looking at the governmental citizen and the existing banking correspondent business, there, we are seeing a traction of around 20% growth over the previous year.
[Operator Instructions] The next question is from the line of [ Rajiv Venkatesh ], who is an individual investor.
I have a couple of questions. What is the realization that we are getting from UP and Punjab? I think in the last con call, you were unable to quantify on that.
So basically, the model is different in UP and Punjab. Punjab, it is a government contract, wherein the government is providing us the centers and we are providing the people and the technology to provide these services. So realization, we have not taken out for application realization, how much we are generating. And UP, the model is different wherein only technology is provided by us. Rest, we have tied up with 10,000 village-level entrepreneurs, we are -- where we are giving them a share of the commission of the revenue that is generated. So this is the model that we operate in different states in India.
So I think last con call, you said like in Punjab, you were getting INR 6 crores per month. So if you can quantify what is the amount in Rajasthan and in UP?
Correct. So see, Punjab contract, we are getting, as we rightly said, this is what we are getting right now INR 6 crores revenue every month. In UP and Rajasthan, the contract is also per application based. And as we have rolled out the services, it will take some time to the number of applications to become sizable. So we do not have an exact number, how will -- how much we will generate out of this. As we introduce more G2C and B2C services, our lead from each application is going up. So I think we will get more visibility in the coming few quarters how much revenue will be able to generate. But the good thing about these contracts is that there is no expenditure for our company apart from the technology platform that we are deploying in these states. So people are using our technology platform to provide these services, and we will get commission on each transaction.
Okay, sir. Sir, I have another one question. This is with regard to the Singapore partnership with -- to provide the digital health certificates. Is it only exclusive to Singapore? Or since we work with other countries also, so can this be rolled out to other countries also? So I'm just looking from the revenue vertical. Can this be separate revenue vertical for us?
Correct. So that is definitely true. So the thing is that this company is recognized by the Singapore government right now. So they are eligible, whoever get these health certificates are eligible to do entry and exit out of Singapore. So as and when we are looking at different countries and different players who are already been authorized by the governments of those respective countries, so definitely, there's a big revenue upside also in this division as and when travel opens up.
Okay, sir. And the final question is on the Spain, sir. Did we renew our contract with the Spain government? Or how is the current situation now?
Currently, the contract [ is in existence ] at the end of next year. And as all the contracts are either getting a service charge increase or contract extension due to COVID, we are also in the process of talking to the government on the same lines.
[Operator Instructions] The next question is from the line of [ Vivek Goel ], who is an individual investor.
As you explained in the opening remarks, the visa services has not started. So the Q-o-Q growth that we see from INR 150 crores odd number to INR 180 crores we have reached, so is this growth entirely driven by non-Visa business?
Correct. So definitely, as we -- this -- in Q1, the revenue from the Visa business was not very much. It was negligible. So as we go along from Q2, we will see increase in revenue from the Visa business definitely.
And the Q4 versus Q1, the growth has come from consular services business all across the world, where we provide services and passport renewals and attestation and other services for the embassies. So that has grown in this quarter. compared to Q4 of last year.
So this growth is driven by volume or driven by the value-added services that we are offering?
Both have been growing. And that has given that 23% growth in the quarter.
Great, sir. And can you give some guidance on the -- what is the status of visa centers? When do you expect them to open? Any idea?
Yes. So see, as we speak right now, we have -- we are seeing very encouraging results from countries all across the world like Russia, North Africa -- countries in North Africa like Morocco, Algeria, in U.K., in Gulf countries. There has been a lot of traction, a lot of demand wherein government has allowed certain categories of visas to be accepted at our center. The demand already is more than the supply. So the appointments are already full for the next few weeks are in those categories, and governments are actually putting a capacity consent right now.So as and when they open up different categories, we are expecting our demand to come in, demand -- because people are willing -- wanting to travel. They have been in lockdown for the last 1.5, 2 years. Now they want to get out of their homes. They want to travel. And so -- and also a lot of countries are incentivizing travels, like providing subsidies in their hotel expenditure or in different schemes they are giving. So we definitely feel, in the next few quarters, travel should pick up.
Sir, pre-COVID, our quarterly revenue run rate was close to INR 200 crores. And without Visa business, which was the biggest division of our services, we have reached to INR 180 crores. So can we safely assume that once the Visa business is close to pre-COVID level, we can easily add INR 70 crore, INR 80 crore more from here?
I think you have to look at it from the angle that consular service business has grown over the period. So the difference is not there, but, yes, about INR 40 crores to INR 50 crores per quarter, Visa business, which has got affected. So technically, we could have done more than INR 220 crores if Visa business would have been at pre-COVID level at this stage.
And then the same addition will be there or because of most of your...
Yes, the addition in the revenue...
As and when these governments allow travel, these numbers will -- we'll be able to touch these numbers. We are very confident, because this pent-up demand, which we anticipate, these numbers should go much higher once travel opens up.
[Operator Instructions] The next question is from the line of [ Ankur Jain ], who is an Individual Investor.
Sir, I'm trying to understand what competitive advances we have in last mile delivery arrangement what we intend to do with Flipkart? And why we have entered into that space? I mean that space is quite different from the space we are as of now.
Correct. So [ Ankur ], basically, I'll tell you the reason is that we already have set up centers across different states wherever we have 1 work, for example, UP, Punjab, Rajasthan. Now in UP, we have opened 10,000 centers wherein people are already coming up for the -- to us for the government services. What is outsourced to us around 350 government services in UP. So people are already coming to us for these services. Now these centers are in Tier 2, Tier 3 cities across different states of India. So we are -- there is a problem of last mile delivery that is happening for these big e-commerce giants, wherein we already have the reach. So we just have to -- this is all going to be an incremental revenue that will flow in. We are providing assisted e-commerce wherein people can come to the centers. They're already coming to these centers, there is always a big footfall for these government services, so they can also come to the centers for these additional services like e-commerce services we are offering.
So what is the arrangement with Flipkart would deliver the product at your store and then the customers will pick up the product...
Correct...
And will take some commission, that is what the arrangement is?
Correct, correct. So people will be -- we will be assisting the people to do the shopping online through our systems and the delivery will be happening as per the agreement with the customer at our centers or warehouses. And we will get commission from these e-commerce companies.
So customer would be ordering through your app you are paying? Or they will order from Flipkart and -- but like in Amazon, also there are -- many times, there is an option to pick up from a store?
So they will be ordering the product through our system.
Okay, okay. Got it. And how much revenue we are -- we do -- we are forecasting for next couple of years from this particular segment?
See, we -- since this is a new segment, not only for us, even for the e-commerce, this is something new that we have started. Right now, we know there's a big demand in rural areas for all these things, example, phones or different shopping materials. So we don't know exact numbers, but we definitely know the potential is huge in this sector also. Going forward, as and when we get some numbers and we will have more visibility, this will only add to our bottom line since we do not have to incur any additional expenditure for this.
Got it. Got it. And just 1 follow-up question on the cash balance. So I mean, now we have INR 300 crores plus cash. So what is the plan? I mean, last quarter also, you told you were looking for some kind of acquisition. So whether now we have almost concluded anything or the management has decided to give some kind of buyback or maybe dividend.
See, we have been aggressively following up and working on acquisition targets. Unfortunately, because of COVID, things have slowed down a little bit. But the intent is to -- if you have listened to Shikhar's speech, he has talked about that we are looking at in this financial year something to get closed. But yes, we -- our whole intent is to use that cash for acquisition and for new tenders, which are going to be a much larger-sized ones. If we win, we will require some funds for that. At the moment, the dividend policy has been there as per that we are taking this call. And hopefully, post-COVID situation, we can take a call on how to utilize the balance funds. But first is to look at acquisition, which we are seriously looking at the moment.
The next question is from the line of V. P. Rajesh from Banyan Capital.
Congratulations, Shikhar and Amit. Question is on the cash. How much of it is Dubai versus the Indian entity?
So Rajesh, currently, we have about INR 250 crores in Dubai. And the balance, about INR 48 crores or something is in India.
Okay. And any update on the money that we are expecting -- we are yet to receive from Punjab -- from the Punjab government? Any update on that?
Yes. Rajesh, so definitely, I think as we have told during the last 2 quarters, we have -- there were at INR 1,300-odd crores outstanding, and we have received more than 75% of it, now only exact amount INR 67 crores is outstanding from the government, and we are performing very well. And the money is expected shortly. Our management team, including the MD, is right now on the ground. So we are expecting the money to come in shortly to our books.
Okay. So can we expect that it will be in the bank by, let's say, September 30?
See, we cannot give any particular date. But as we told you that out of INR 300 crores, we have already recovered INR 223 crores, INR 67 crores is pending. So that money, we are on the ground right now working towards it. So we expect the money to come in definitely within this financial year.
Okay. All right. And then on the business side, what is your sense, Shikhar, of the activity level, like meaning if normal is 100%, where would you grade current activity levels at?
So if I understand the question, Rajesh, you are talking about which part of our business we are concentrating on?
The visa processing business.
Correct. So...
Let's say, if normal is 100%, are we at 50% or lower or something in that range? That will be -- that's what I'm interested in.
So visa would be, I think, around 10% of the entire revenue right now because visa numbers are now coming in. We are doing that revenue. But important point, Rajesh, right now to note is that in the next 2 years itself, there is an opportunity of $1.5 billion to $2 billion in the Visa business. Globally, developed governments in the European space and in North America, the Canadian and the U.K. government, they are coming out with the global tenders for visa outsourcing in the next 2 years. So -- and also, there are a lot of European government. So there is big, big opportunity for us as a company right now to grab certain percentage of these tenders. We already have experience of working with all these governments in different phases of the company. So now they know us and we have -- we stand a good chance to grab certain market share of these contracts.
Got it. Got it. No, that sounds wonderful. And my last question is that in this quarter, what percentage of revenue came from the consular services and value-added services related to that?
I think, probably, from this consular services would be 65% to 70% of the total revenue. And rest would be -- 10% would be Visa business and 20% from the G2C and 15% from the...
Yes, correct.
Other businesses.
Other businesses.
So I think around 65%, visa and consular together is around 85%.
Yes.
Visa and consular together is about 85% in this quarter, right?
That's right. That's right.
The next question is from the line of [ Prashanth ], who is an individual investor.
Am I audible?
Yes, please.
Yes. First of all, congratulations on a good, excellent set of numbers in this trying condition. Most of my questions have already been answered. I have just 1 request -- two questions, basically. Has the management and the Board kept [indiscernible] the bank, the INR 300 crores of funds can be utilized for a shareholder return or anything?
Sorry, we actually -- you were not clear with the question. Can you repeat the question?
Sir, my question is that, I mean, we have INR 300 crores of funds, I mean, which -- for which the management is actively scouting for us, bolt-on acquisition. Is there a time line by which it has to be done? Or it's open ended and we keep on continuously evaluating for that?
No. There is -- it is, first of all, not open ended. As you know, last 2 years, COVID was hit, and we had the opportunity for some acquisitions. But physically, we were not able to travel to verify. So for us, also, this is 15 years of hard work that we have generated this cash. So we do not want to deploy our resources just like that. But we are definitely, because of COVID scenario, there are companies in the visa outsourcing consular service space that are out for grabs at attractive valuations, so we are looking at them. Also, companies in banking correspondent and citizen service space also are there. So I think there is not an open ended time line, but we don't want -- we want a judicious utilization of our funds. That is what we are looking for.
So in other words, is it safe to assume that acquisition is highly probable in the current fiscal year as the management will explore options of better deploying of this fund?
Correct, correct. Our intent is to utilize our funds within the current financial year.
Okay. And the next is just more of a request. Now since -- I mean, we have multiple lines of business and these are quite different from each other like. visa and counseling services are different from banking correspondent to the last mile. Is it possible for going forward to give a segment wise or vertical-wise numbers so that, I mean, investors can have a better view of the -- -- better view and understanding of the business?
Thank you for this question. But I just want to also specify that even though we have different lines of business, the model at the core remains the same wherein we are collecting upfront money from the citizens. So be it a visa consular business or the citizen service business or the banking correspondent business, the model of the company is to collect upfront money from the citizens or the customers for providing these services. So this is the same model across both. And Amit, you can answer the question on the segment.
So currently, all these businesses are being combined together as far as the management is concerned, and they look at the consolidated numbers as of today. But yes, this suggestion, we have been exploring. And if that works out, then we may create an MIS according to this.
[Operator Instructions] The next question is from the line of [ Mukesh Keswani ], who is an individual investor.
Thanks, first of all, for giving me the opportunity again. Just a few small points for us to know exactly how the things will move forward. On this health certificate, what would be a typical charge that you would be getting on issuing each certificate?
So the charges are different according to the countries of operation. For example, for Singapore, if we are working for different country nationals, typically, the charges are around USD 10 that we'll be collecting.
And what is -- for just an idea, like, what would be the number of travelers where who will be using this facility based on Singapore sales loads that are there?
See, this is also a new product, as you know, that the entire global travel market is a customer for these kind of products. So right now, we have introduced this. Let us see how many numbers start coming in. But definitely, we are expecting some healthy numbers to come in from this product.
And would this be restricted only for a short time? Or is it a long-term thing?
I think -- we do not know, currently, the policies of the government because they are changing because of COVID scenario. But at least for the next couple of years, I feel that these kind of things should exist, which will anyways be only incremental revenue for us. And our base revenue is from those products which we are already generating.
Okay. Now coming back to the visa and consular service. Since you have mentioned that the visas were not really up to the mark, can you tell me just for the -- from an operational point of view, do the consular and the visa services work from the same centers typically?
Correct, correct. They work out of the same centers.
So would it be logical to say that if the visas start coming in as before pandemic, the margins and efficiencies of these operations would increase?
Definitely, I think that is very, very safe to assume. That -- as and when we get more number of applications, we are utilizing the same existing centers for margins and profitability should increase for the company.
Yes, our breakeven has come down with this COVID. When we have relooked at our costs, we have got it down to a level where I feel once your numbers start coming in, our margins will improve in the coming quarters.
Okay. And the last time -- last con call, you had mentioned about the contract with Portugal government where you were charging EUR 35-odd something that you mentioned, is there any big contract that...
Hello? I think...
We seem to have lost the line.
Yes. If you want, I can answer that last question also. I think I've already answered it in previous questions that we are looking at a big opportunity of around $1.5 billion to $2 billion with multiple governments in the next 2 years. So we are working on that and hopeful of grabbing some market share of that.
The next question is from the line of V.P. Rajesh from Banyan Capital.
My next question was regarding the number of transactions we processed in the current quarter -- or in the last quarter rather in the visa and consular services. Can you share that number?
Rajesh, currently, I don't have the numbers. I can share with you once you send it to me.
We can share -- I think we can put it on the exchange.
Yes, yes, we can do that.
Yes. I think what will be helpful is if you can just put the number of transactions processed in the -- in Q1, Q4 and last year's Q1 so that one can get a sense of how the number of transaction is going up, et cetera. And Amit, you were talking about that the breakeven has come down. And I'm sure you don't want to disclose the breakeven number, but can you at least give us a percentage by which it has come down?
See, earlier, our -- as you know, pre-COVID, the whole infrastructure were there when we were doing higher volumes. But during the COVID, what we did, we revisited our cost, especially on the employee cost and the rentals. And we have -- practically have reduced all those by moving to a smaller place as well as renegotiated the rentals. So my gut feeling is once you see the numbers coming back, our fixed cost is anywhere there in the -- in our results where we are taking care of the fixed cost at the moment. Any further sales, which comes in will -- straightaway will hit our bottom line because our fixed cost has now been taken into account. But if you want to just look at what we have got it down to was about 5%, we have reduced on our fixed cost what we were earlier having it, approximately 5% to 6%.
And the variable cost, how much has that come down by, if at all?
Variable costs have been on the same line. That has not moved much because those go very much in line with the revenues. So if you see the results also, it has been moving around 70% of the cost, which is normally around that range, 1% or 2% plus/minus.
Okay. My next question was on the Starfin side. The sense we get by talking to some other folks is that that's a little bit of a commoditized piece unless until one really gets to a certain scale. So I'm just curious, what are your thoughts on that business? Are you looking to add more through acquisitions? Or you think that can generate -- is that currently a profitable business? And what can be the profitability in that business?
Correct. So Rajesh, definitely, we are very, very bullish on this business. As we speak, we acquired a company called Starfin a couple of years back in which we are generating a 20% return on investment, 25% CAGR growth is happening. As we speak, we have won some contracts with some new banks and also are -- increasing our reach within the State Bank of India wherein some new codes have been allotted to us. So we definitely feel this is a business which is going to grow, and we are going to generate healthy and continual margin in this business, because people -- it is also a business wherein a certain area is allotted to you within a district or a state wherein people have to come to your center to process those applications. So it is also a semi-exclusive kind of a model wherein going forward, we are quite confident that we will grow as a company by adding more banks, increasing our reach with existing banks, and we will become one of the top few players in India in this business also.
So what were the revenues from that business in this quarter?
See we are -- so we are right now not separating the revenues from citizen service or -- and banking correspondent business. So 15% to 18% of the revenue of the total is coming from these businesses. But as we move forward, definitely, revenue from citizen services as well as banking correspondent services should increase.
Okay. And is the margin in the bank correspondent business higher than our visa and consular services right now? Or how would you characterize it?
So the margin in these businesses are in the range of around 15%. And Rajesh, another distinction between what you are talking about businesses in banking versus this, this being exclusive with SBI. The competition is very limited because they don't give us -- for -- a CSP in our location where they have some other. So technically, it was a very little semi-exclusive contract. So margins are being protected. That's right.
I see. No, that's a good point. I forgot about that. That's a good point.
That is important.
And my last question is -- sorry, go ahead.
No, no. I was just saying compared to the other banking correspondent business versus ours, that is a major difference.
Right, right. So my -- just going back to the consular services, what would be the average age of your current contracts with different governments across different geographies? What would be that age of the contract life, which is remaining in those contracts, weighted average?
We have been running -- some contracts we have been running for 10 years. Some we have been running for 7 years, some for more than that. So we have different, different contracts that expire at different periods. And because of COVID, as we speak, we are in extension of a lot of these contracts. And as we spoke, there is a big opportunity of $1.5 billion that is going to come on in the next 2 years. So I think this is where we are standing right now.
Yes. No, I hear you, but I would encourage you to have that number. And for the simple reason for investors, it gives them a lot of confidence that this revenue has a very long tail, that meaning it's an annual recurring revenue for, let's say, 5, 6 years or whether it is 3 years or 4 years. So I think to the extent you can start disclosing that weighted average number of years, I think it will be very helpful. Because the business model is very strong, but I think if we get this kind of additional data points, it will just corroborate that hypothesis.
Noted. Noted your point.
The next question is from the line of [ Rajiv Jain ], who is an individual investor.
Am I audible?
Yes, please.
Mr. [ Rajiv Jain ], you may go ahead with your question.
Hello?
Yes, [ Rajiv ].
Hello?
Yes, [ Rajiv ]. We can hear you.
My question is...
Mr. [ Rajiv ], if you're on a hands-free, we request you to use the handset. Your voice isn't very clear.
Now am I audible?
Yes, sir, please go ahead.
Yes. My question is, as you've tied up with e-commerce retailers, does these services is restricted to 3 states only Punjab, Rajasthan and UP? Or if yes, do you have any plan to expand it to other states also?
Correct. So [ Rajiv ], first of all, these services are not only restricted to 3 states. We are also planning to introduce these B2C services, which include the e-commerce services in our different states wherein we are working for different banks also. So definitely, this will be expanding. At the same time, we are talking to different states also to introduce similar G2C services in different states. So as and when we start those government services, we will also take these services along.
Okay. And the second part is as you have tied up with ICS -- you have won ICCR contract also, Indian Council for Cultural Relations.
Correct, correct.
So what is the -- do you see the prospects in terms of revenue from this segment?
So definitely, this is something new, which has been done for the first time outsourcing in this field also by the ICCR. So we feel that as and when travel opens up, there is a big conferences happening hosted by the Government of India and a lot of travelers who come in and we are mandated to provide assistance and good networking opportunities with dignitaries, which are mostly leaders of state and different delegations. So we will be assisting them with their needs within India. So I think, definitely, the opportunity is there. This is the first time the outsourcing is done. So as and when travelers start coming into India, we will see some revenue also to be contributed from this part of the business for the company.
Your revenue is on basis of commission or a fixed amount of fees per annual basis? What is the revenue terms?
There is a service charge that we will collect per person basis, the same model that we have with BLS. So this is the same model wherein all our businesses work. So revenue is nowhere fixed. We will get money on the -- per person basis.
The next question is from the line of Harsh Patel from Alpha Alternatives.
I had 2 questions. So firstly, you said you have 10,000 centers in Uttar Pradesh. Now I wanted to understand what is the due diligence that you have done? Because you have 10,000 centers and you have 10,000 entrepreneurs who are running the centers. So in terms of liquidity and there -- what happens if they decide to quit? Your reputation goes on a toss. So what is the thinking behind that? And how will you manage that?
First of all, we work on our -- we have advanced payment from these entrepreneurs. So we work on a wallet basis, wherein our wallet, first is recharge, that is of BLS, so they're putting the money first in our wallet. And then as and when the services are provided, the wallet is utilized. So we always have some extra money from them in our wallets, which is -- so it is a model where it further deposit the money and that money is used. So this is not a very, very different job. So these are some various government services that they provide on our behalf in these centers, which are outsourced by the government of UP. So these are typical services wherein people do not have a lot of free way to change things. So for example, if you come and apply for a birth certificate, they will input the data of the applicant. And still, we are -- as you remember that judgment is done by the government whether to give the certificate or to approve the certificate. So we only have the power to input the data, and that is what also we do in these kinds of contracts.
Okay. So -- and my second question is what Rajesh asked you about the cash balance that you have when you're transferring it to Indian entity? I missed that point. So can you please repeat it?
Amit?
So see, entity, all entities are independent, and we get money from entity for the services, which BLS International provides on an arm's length basis, and dividend, which is declared by the foreign entities, which we receive because we are the 100% shareholder of those companies. So that's how the money is being received in India.
So what is the amount of money that is going to flow? You are saying some INR 223 crores is we received.
So around INR 50 crores is lying in India and INR 250 crores is in deliveries.
So that is going to reach -- that is going to flow in the Indian entity by the year-end?
No. We will -- as we spoke, we will see what structures are possible for acquisitions. So there's a...
Transactions are imminent. So they have to come on the basis of the services which we are providing to these companies.
So -- but for any acquisition that you have to do, that would be done from the holding company, right?
Yes, it can be done by a holding company or if it is an international acquisition, it can be done by the subsidy also. So structure can be worked out for that requirement.
We'll take that as the last question. I would now like to hand the conference back to the management team for closing comments.
Thank you, everyone, for taking this call today. We are satisfied with the performance of our company during the quarter, considering the global pandemic situation. With our ability to adapt to every situation, well-diversified revenue model and the opening of our borders in a phased manner, we are confident of showing good momentum in the coming quarters. Thank you. This is all from my side. See you soon.
Thank you very much. On behalf of BLS International, that concludes this conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.