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Bls International Services Ltd
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Ladies and gentlemen, good day, and welcome to BLS International Q3 FY '23 Earnings Conference Call. [Operator Instructions] And there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Shikhar Aggarwal. Thank you, and over to you, sir.
Good morning, everyone. I welcome you all to our earnings conference call for Q3 and 9 months FY '23 business and financial performance. I have with me on the call today Mr. Nikhil Gupta, Managing Director; and Mr. Amit Sudhakar, Chief Financial Officer of the company.
Our performance in the third quarter has been in line with the expectations, continuing the growth trajectory of the previous quarters. Healthy recovery in travel and tourism across the globe is boosting volumes and revenues in our visa business, which is growing month-and-month. With increase in volumes, we are benefiting from economies of scale, leading to an improvement in our margins in visa business.
In early January 2023, China also announced plans to open up travel, which bodes well for us. We expect volumes to increase going forward after this development. Now only Russia, which has been operational for a while, remains to open fully to tourism.
We also won new contracts in our visa business, including the Malaysian Immigration Authority contract to issue e-visas. And we have successfully renewed our contract with the Ministry of External Affairs for the attestation business.
On the other front, in the last quarter, we had consolidated our business corresponding an e-governance business in 1 segment, namely Digital Services. Our business correspondent business has been growing steadily, especially after the acquisition of Zero Mas Private Limited in June 2022. Consequently, the line of business became sizable enough to demand dedicated focus. Therefore, we consolidate BC and e-governance business into Digital Service segment.
In line with this, we consolidate our Digital Service business under BLS E-Services Private Limited, thereby making BLS Kendra, ZMPL and [indiscernible] as subsidiaries of BLS E-Services, which will facilitate the future growth plans for our Digital Service business.
Moreover, we are able to offer more types of services through a common touch point. We are investing in infrastructure and manpower to expand this segment. In fact, a number of touch points have grown from 80,000 in September 2022 to 90,000 in December '22.
During the quarter, we commenced 4,300 GramaOne centers in Karnataka, while operations in West Bengal, Rajhastan, Punjab are going on track. While the visa business continues to grow, we aim to develop our Digital Service business aggressively. For this, we plan to expand our network of touch points throughout India.
In line with this, PNB, Punjab National Bank and Bank of Baroda are already on board with us, whereas we explore tying up with further newer banks. I would like to conclude this by saying all our businesses are doing well. We firmly believe that digitization is the key in the post-COVID world, and we have always tried to use cutting edge technologies for all our services. This is all from my side. I now hand over to Mr. Amit Sudhakar for updates on the financial performance. Thank you.
Good afternoon, everyone. Let me brief you on the financial performance for the third quarter ended December 31, 2022.
During the quarter, we reported a revenue of INR 437.90 crore, an increase of 92.86% Y-o-Y and 22.72% Q-o-Q, mainly driven by a robust recovery in the visa and consular business, coupled with Digital Services businesses. The revenue was also supported by a contribution of about INR 42.2 crores from ZMPL during the quarter.
We are seeing a good momentum in all our businesses and are optimistic of sustainable growth in the coming quarters. The EBITDA for the quarter stood at INR 66.30 crores compared to INR 25.53 crores in the corresponding quarter last year and INR 56.8 crores in the Q2 FY '23. The EBITDA margin for the quarter stood at INR 15.14 crores -- percent -- 15.14%, which is over 390 basis points higher compared to the corresponding quarter last year. Cost optimization and higher volumes helped offset the impact of higher cost of services, benefiting the EBITDA margin for the quarter.
The profit after tax, PAT stood at INR 45.85 crores in Q3 FY '23 as compared to INR 28.29 crores in previous corresponding quarter and INR 50.99 crores in Q2 FY '23. Going forward, as mentioned earlier, we are investing in expanding both our businesses segments visa as well as Digital Services.
The recent ZMPL acquisition has been EBITDA and EPS accretive from the day one and is expected to further improve our overall ROCE. Coming to 9 months results. In the 9 months ended December 2022, our revenue grew 79.11% Y-o-Y to INR 1,067.56 crores. The EBITDA stood at INR 154.47 crores, growing at 115% Y-o-Y, while EBITDA margin improved 241 basis points to 14.47%.
The PAT for the period was INR 127.54 crores versus INR 76 crores in the corresponding period last year, a rise of 67.8%. In December 2022, we allotted bonus equity shares in the ratio 1:1 for every equity share of INR 1 each held by the shareholders of the company. The Board has approved the first interim dividend for FY '22, '23 at 50%. That is INR 0.50 per share on the expanded equity capital. This is all from my side. We will now open the call for Q&A. Thank you.
We will open the floor for questions. Am I audible?
Yes.
We'll now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Ravi Naredi from Naredi Investments.
Sir, congratulations in advance to reach $1 billion market trade, which we will surpass soon. Top line rises by 93% for this quarter while net profit rises by 62%. So what are reasons to net profit margin down in this quarter 3?
See, as explained in our commentary, we have started investing in our digital businesses. So the percentage has come down in the current quarter. And in the next quarter onwards, we will see the benefit of those digital business investment and what we are trying to put extra people on board to expand their businesses.
What are the businesses? And will you highlight some more information about that?
So in digital businesses, if you look at, we basically have 2 verticals. One is the banking correspondent business and the second is e-governance. So we have won few contracts in the last quarter. And we have started like Karnataka has been where we have got INR 4,300 [indiscernible] center points which we are developing, which will start from the next quarter.
This quarter onwards, you'll see the revenues start coming from those. So those -- we are putting these infrastructure and increasing these touch points PAN India, wherein all these businesses will grow over the next quarter.
Sir, what would be the income tax rate for the financial year '23 and '24? If you can guide about that.
The effective rate will go on increasing now from the last year onward. Main reason being the revenue from India, especially from digital business, has grown up from -- if you see the last year Y-o-Y, we were doing 10% business in India. And now that has gone up to 17%. So the effective rate, what we are looking at, will come somewhere around from, say, 10% last year to around 12% to 15% this year.
12% to 15% this year. Okay. And sir, can you tell in next 3 years where we see visa and consular services versus digital services. Any broad picture, can you give, it will help us.
See, now if you see in our total revenue, around 83%, 85% is coming from visa consular service and the rest comes [indiscernible] business. I know opportunities that we have in both the space. I think we expect the revenue mix to remain same in the coming years because we are expecting further growth in the visa consular segment and for the growing Digital Service segment. So definitely, we want to -- we expect the revenue mix to maintain the same.
And this figure sometimes changes because depending on our very big contract, if you get in digital, so that quarter, the percentage may change a little bit. But as a mid-term and long-term strategy point of view, we want to keep a 20-80 ratio.
In both the services, we have same margin or visa have more margin compared to Digital Services?
So the Visa has -- as of today, the Visa has a much better margin compared to Digital. But the top line and the growth, what we see is a potential is what we see immediately with -- in the next couple of quarters, you'll see in Digital, growing much faster.
[Operator Instructions] The next question is from the line of Amresh Kumar from the Geosphere Capital. Amresh, may I request to unmute the line from your side and go ahead with the question, please. Due to no response, we move to the next participant. The next question is from the line of [ Maulik Patel ], individual investor.
My question, BLS International Limited is holding 70% in BLS E-Services Private Limited, right?
Yes, that's right, Maulik.
And then who is holding 30%, remaining 30%?
So Maulik, as we have given in our announcement also to the soft changes, there have been -- 69.32% is by BLS International and the balances with the promoter and non-promoter group. They are also in the [indiscernible].
Okay. And what is the reason we have assigned that 30% to non-promoter and promoters? Because as I understand, companies have enough place. And why is the different interest promoters have in a holding company and subsidiary company, right? Because any x promoter is holding like 75% overall approximately. So why don't you have like straight up with the subsidiary and the main company?
Okay. Let me try and explain it to you. My name is Nikhil Gupta, the Managing Director. See, this business of BLS E-Services consists of many businesses, as Mr. Amit and Shikhar have explained to you, the Digital Services. And these businesses have started something like 7 to 8 years ago.
Okay. So in all of these 7 to 8 years, the promoter group has put in substantial amount of time, effort, in some cases, they have provided guarantees, given loans. And all this has helped to grow the business to the situation we are in today where the annual profits of this E-Services as a group would be in the region of INR 30 crores to INR 40 crores. So the Board of Directors of the company considered it appropriate that they be compensated for all the work that has been done over the years to bring it to the current status. And this is one way of rewarding them and instead of paying this money by way of cash, it has helped the company by way of allotting equity to them. So this is the entire background to what you see in the financials and the reason behind it.
Yes. But as a minority shareholder, it would be nice if we have provided the place because think about that -- this progress will be bigger, like if it is generating like INR 40 crores right now, it will generate INR 400 crores, maybe in 3, 4 years or maybe 7 years. Then we are diluted for like lifetime. So it would be nice if company has the [ case ] and we consider the [ case ] as a [ precaution ].
Maulik, Not to be argumentative, but just to let you know that the money that we are earning in cash has really helped us in the past and we expect it to help in the future in terms of growth of the company through organic as well as acquisitions. So we want to conserve some of that money so that we don't end up taking up a large amount of debt in the future.
So allow us time. We'll show better results in terms of acquisitions.
Yes. No, I'm not -- are you thinking that the -- previous participant who asked, right, why revenues have increased, but why EPS not have increased and I think that is the reason I feel because of dilutive of the shareholder equity, that's why we are increasing the revenue that EPS maybe not like effective because if you see our operating margins have increased quarter -- year-on-year, right? So EPS should increase, too.
Yes, it will. You'll see that.
Okay. I'm like disappointed because in my whole portfolio, I'm holding 30% of the BLS International only, and it's my turn -- [indiscernible] in my lifetime. So I'm really excited of the continue on top [indiscernible] I'm not a but [indiscernible] just I don't like the one thing that we have diluted. That's the thing I didn't like.
We've taken your thoughts on board and will communicate to the Board also. But this is where we are. And we believe that what we have done is going to only help the company in more further commitment from the promoter family to grow the business much more as they've done in the past.
But thank you for your suggestions [indiscernible].
I hope you consider because I want to see not even 1 million company, I want to see you guys in the world. Anyway we are in like top 3. I want to see in the top first, so.
Really thank you for that, and we'll work hard towards achieving your dreams also.
[Operator Instructions] The next question is from the line of [ Joseph Matthew ], individual investor.
So from there, will our visa business is growing? Like do we detect any expansion from any particular area or region?
Correct. Definitely, as you know, the visa consular service business this quarter, we have achieved the highest EBITDA and revenue for the company. And til now, the world has not fully opened up. So we expect revenues to go up from the existing contracts that we held. We have already been informed that China is going to open up. We are ramping up our capacities probably Russia should open up also in the near future.
So definitely, we expect a good season -- summer season in the first quarter next year. And definitely, revenue and EBITDA will grow up from the existing businesses that we held. On top of that, as you know, we have recently deployed our German contract in U.S., Mexico. Revenues have already started coming in and will start increasing over the course of the months from those contracts.
On top of that, the additional contracts that we have bid for and in which results are coming with the opportunity is quite huge, as we have explained in the previous quarters of $1.5 billion to $2 billion. And slowly, slowly, we are at different stages of qualification. So as and when that will come, definitely, revenues and profitability will increase further for the company. Hello?
Sir, can you hear us?
Yes, I can hear you.
The next question is from the line of [ Anirudh ].
So first of all, congratulations on the results. I just had one question. Like if we look at the segment-wise results, the profitables were before taxes Q-o-Q. So in September 30 results, we had a profit of around INR 9.5 crores from the Digital Services, which has fallen down to minus INR 16 crores in this quarter. So any specific reason for that?
Yes. Mainly, as we have given this said equity impact of INR 24.6 crores has impacted the P&L. Noncash impact. It's a onetime. So if you take that out, we are quite similar percentage of profit, what we did in the previous quarter.
Understood. And just a further add-on to that question. So standing from that point of view, what would you say is the [ outcome ] of the Digital Services business, which you have now separated out, like how do you foresee it growing let's say, on a quarter-to-quarter on a year-on-year basis?
So this is one of the emerging businesses. You know that we acquired a company in the business correspondent space 6 months or so ago and it's already beginning to show improved results. So this is an investment in businesses, which will, over time, we expect we'll give the targeted EBITDA numbers like the visa business is growing.
So there is slightly lower today compared to Visa. We hope that it will catch up.
Understood. So take it away from this conversation that this was a onetime hit that has been booked, and we will see further results of our investments in this sector in the coming quarters.
Absolutely.
[Operator Instructions] The next question is from the line of Amresh Kumar from Geosphere Capital. .
Sir, one question on BLS E-Services. Will this be the only vehicle through which you will be doing Digital Services? And if yes, will ZMPL be a part of it? Or is it currently the case?
It is the part of the E-Services. ZMPL is part of the E-Services now.
So BLS E-Services would be the single entity through which you will be doing this digital business, right?
That is correct. That's right.
Got it. And secondly, sir, any update on your Spanish contract renewal and other contracts for the competitors, if you can give any update.
Definitely, as you know, we recently started working for the Germany government. We deployed offices for the Philippine government. We recently also won a contract for the Malaysia e-visa authority, wherein we have started in India right now and then eventually, we will be going into many more countries. So that is the status as of right now.
And as and when the results for the contracts that we are bidding for or announced will definitely -- the problem is that we cannot announce before the agreements are signed. So that is -- so then when as when we are signing, then we will definitely be announcing. But we are on trajectory for growth and gaining market share in the coming years. That will add to our existing revenue and profitability that we are already doing.
And what about your Spanish contract renewal. What is any update there?
So there is -- as and when the results are announced or when we sign the agreement and we are allowed to announce, we will be announcing.
[Operator Instructions] The next question is from the line of Rikesh Parikh from Rockstud Capital.
First of all, I would like to know, we were looking to some acquisition in the visa processing space, any update on that?
Correct. So as you know, this is a very niche market where there are only 3 global players; BLS, TLS and VFS. And then there are some small regional or small level players which are operating globally. So we have been under due diligence for a couple of companies in the visa outsourcing space.
Till now, nothing has -- we have done due diligence and we are negotiating. So as and when we see a good value add for the company or the multiple is attractive, as we have done in the past. If you see Zero Mass acquisition has given us a INR 42 crore of revenue this quarter and added good profit to our bottom line and it was at a healthy multiple that we bought the company. So we are looking at those healthy multiples and revenues and profitability only then we want to acquire the company.
So definitely, I think we are looking at it. And as and when we -- anything rectifies because then we will be making announcements.
And any thought on means -- or any structure through which we plan to bring the surplus cash from here other than the -- what we require for acquisition point of view from the Dubai subsidiary [indiscernible]. Have we thought on that -- are you thinking?
As and when the money is required, we are getting it. And also, as you know, this quarter, we have declared the highest ever dividend, the management have decided because of the highest EBITDA achieved in the quarter, we have declared the highest interim dividend.
And also, the contracts that we are bidding for -- as and when they rectify, we need to deploy a good amount of cash even in operation of those contracts because these are all big contracts.
And just lastly, on the Digital Services side, right now, we are roughly around 17% of the revenue coming from there. So down the line, where do we see in terms of percentage revenue, will it be ramping up? Or we are looking at [indiscernible] between visa and the Digital Services space?
Yes. As of now, our long-term strategy is that we maintain the ratio of revenue mix between both visa and Digital Service business, and that is what we foresee in the near future because we expect major growth coming in from both the segments. So our total revenue of the company will increase and profitability will increase, but the revenue mix should retain almost similar.
And then last question, if I can squeeze in. What is the profitability in the case of Digital revenue?
So I think quarterly average, we are doing INR 10 crores of profit in the digital business currently.
12% margin.
[Operator Instructions] The next question is from the line of Dhvani Shah from Investec Capital. Due to no response, we move to the next participant. Next follow-up is from the line of [ Joseph Matthew ], Individual Investor.
So I hope I am audible.
Yes, we can hear you.
Okay. So how do you think it's difficult for our competitors to entering in our business?
We already have competitors which are operating in the business. And then if you're talking about new entrants enter into the business, then definitely, there are big barriers to the business. It also took us many years to get qualified for these tenders. They require experience of working with those many governments for x number of years.
So it took us -- slowly, slowly, we built our capabilities, and that is the reason that now all the tenders that we are working on, there are only a handful of companies in the world, including ours, which are qualified.
Okay. And does the business seeking out any M&A opportunities like and if yes, then which industry would it be? Like what standards would you evaluate for such a [indiscernible]?
Definitely, we have seen the success of M&A that we have done in the recent past with Zero Mass, with Starfin. We are getting -- we did a revenue of INR 42 crores in the quarter and generated a profit of INR 10 crores for Digital Service business. So definitely, we are looking at acquisition in both the visa passport and Digital Service business. And we are looking at not buying a company at a heavy valuation.
So we are looking at attractive multiples, which can add -- also we can very fastly cover our investments. So I think this is what we are looking at.
Okay. And earlier, you mentioned Russia, so the geopolitical tension that is going on in Asia is, what do you think would be the effect or what is the visibility on Russia opening up?
Definitely, as you know, this is a global world that we are living and we are a global company where we operate in 64 countries globally. So whatever numbers we have received right now, which is with negligible numbers coming from both Russia and China. And so we have not even achieved 2019 numbers.
So whatever things open up, things will only benefit us. So right now, we don't have any outlook on the Russia or any other space. As I've informed you before, we have been told to ramp up our capacities in China already, which we are doing because we are expecting -- the government is expecting the things to open up and numbers to come in.
So Russia also, maybe in the near future, things should become normalized.
[Operator Instructions] The next question is from the line of Aman Vishwakarma from RoboCapital.
Yes, can you hear me?
Yes, we can.
Congratulations on the good numbers. I was -- so what I needed to know was, so you've won a few couple of contracts. So what is the time period of these contracts?
Sorry, you're talking about the?
The time period of these contract, how is that like -- is it a 1-year contract or a 5-year contract?
Normally, it's 5 to 7 years. It is 5 to 7 years.
Okay. And as the follow-up, so what is the switching cost that a government would have to take on. Let's say if it doesn't want to continue with BLS and maybe let's just switch to VFS or something, so is it possible for you to quantify that sort of searching cost?
Government doesn't take any cost.
Government does not take any costs. So all the costs are geared by us [indiscernible] all the vendors.
[Operator Instructions] Next question is from Dhvani Shah from Investec Capital.
Am I audible now?
Yes, you are.
So a couple of questions. So to start with the visa volume. I just wanted to understand is there any seasonality [indiscernible] in Q3 and does that impact the gross margins in any way?
So yes, there is a seasonality. As you know, people travel to Europe during the summer, and people travel to India and Asian countries during the winter. So there is a seasonality. And normally, we peak mainly during the summer season. So there is a little bit of an impact. And obviously, that has some impact on our profit margins.
But what we have seen in this quarter persist, that when you travel -- what we were talking about has resulted in growth in the volumes during this quarter, whereas normally this quarter is a little subdued compared to Q2.
Okay. Also, I wanted to understand now that we have lowered our expense, they have come down from 9.5% of employee expenses in Q2 to 8.5% on revenue and similarly with other expenses. Are there any one-offs? And can it be sustained going forward?
So this is more because of the higher volumes and the revenues, which have gone up. So this will be more, I would say, semi-fixed cost. And we will be able to work out if the volumes continue going at a decent pace. This percentage will continue coming down or it may stabilize somewhere around these levels.
If you know one-offs [indiscernible].
I cannot hear you.
Yes, sorry. So there's no one-offs in the quarter, right?
No, no. Nothing one-off during the quarter.
Okay. And just last question. On Karnataka and West Bengal within the Digital Services, when will they start contributing to the revenue and how much do you expect the contribution to be?
See, the West Bengal has started last quarter only. And Karnataka, we have put the infrastructure in place. And this quarter, we will get the revenue from Karnataka.
Okay. And if you can give any guidance on how much will that be?
A little early days because it all depends on the transaction, which happens. I think next quarter -- next quarter will have better...
Next question is from the line of [ Akshay Jain ], an Individual Investor.
Am I audible?
yes, we can hear you.
Congratulations on a good set of number, Shikhar and the team. My question is like with respect to last mile delivery and insurance like we are talking about it from past, say, 3, 4 quarters. Like is there any revenue being generated by that, like substantial revenue?
Well, we've started -- the good news is that we started the insurance part of it in all our businesses, and it is beginning to show some results. But the large volumes will come in with over a period of time.
Okay. So like the 90,000 [indiscernible] points, which we have, we are having all that services from all the 90,000 or like it is [indiscernible]?
We may not have business from all the 90,000, but the business has started in all the 90,000. So whoever is interested in insurance can come and take insurance.
My other question is like about our operating profit margin. Like would we expect it to be the same or to increase a bit like or decrease something like that?
So see, this quarter has been quite good as far as the volumes are concerned. If these volumes continue, I'm sure we will go on improving on our EBITDA margins, which have now touched from -- if you see last year, we were somewhere around 12% or so, 12% to 13%. Now we are touching around 15% to 16%.
So see, what we have did during COVID of realigning our cost is showing results now as a percentage of EBITDA. And we are sure if the volumes continue going up, our cost may not go in the same proportion.
So we can expect a bit of increase there, right.
It all depends on the volume of business we get.
That's correct. My last question is like, if you can just give a rough figure of all the markets like we are top 3. So what is the market share we have with us with respect to the world?
Market share, I think globally, we would be having around 12% in the visa consular service business that we are, as I explained to you before, that we are expecting and we are bidding for tenders where the market share held via competition is coming under tender. So if we gain certain market share in those territories.
So then definitely, our market share will go up. On top of that, the industry is also -- the outsourcing is also improving and increasing. So definitely, our market share will go up in the coming years.
[Operator Instructions] Next question is from the line of [ Sylvie, retired ].
First of all, am I audible?
Yes. We can hear you.
First of all, congratulations to the BLS team for splendid performance over consistent performance over the past 2 years and rewarding the shareholders enormously. So congratulations.
I have 2 questions. First is, it's nice to hear that China is opening up. So let's say, from the first quarter of next financial year, what do you expect the China contribution in the entire visa service revenue?
See, right now, whatever numbers we have achieved is big, in spite of China being semi-closed and Russia being semi-closed. So it's very difficult to predict what numbers will come from there right now, [indiscernible] we have started ramping up our capacities in anticipation of increasing numbers, whether it happened in the first quarter, second quarter, we cannot comment on.
But typically, what has been the contribution of China in the pre-COVID times?
pre-COVID, the contribution was, I think the number of China was 15% of the total global volumes. Because see, conventionally, if you see China and Russia or major source markets for tourists. So definitely, those numbers still are negligible.
Okay. Okay. My second question is it's -- glad to know that we have $1.5 billion to $2 billion worth of opportunities still to be tapped. Now when we are talking about that, you also mentioned in your presentations and various interviews, that the share outsourcing is currently at around 35% and which you see to be growing up to 50%. So this $1.5 billion plus opportunity that you see, is it what you're talking about, the balance 15%, that is 35%?
No, it is majorly from the existing market because this is the visibility that we have on tenders. And -- but we have not talked about the opportunity or the tender size for the markets which are outsourcing for the first time. so that if we get any of those, that will be definitely adding to the market.
So I mean, I'm still not able to get hold of this.
No, let me explain you. So this opportunity is from the existing outsourced market. Right now, these contracts are being run by a competition. And since now we are qualified in the cycle. So we are poised to gain certain market share in these contracts. So this is on the existing outsource market.
On top of this opportunity, there is -- not accounted for opportunity, which is a non-outsourced market. For example, we started working for the Philippine government, the Brazil government which outsourced for the first time. So these tenders sometimes they take years to come. That is why we have not mentioned this opportunity.
So I understand. So it is basically on account of increase in market share.
That's [indiscernible] saying that $1.5 billion, what he has been talking about, other tenders which are coming in the market for retendering. So they are the existing outsourcing business, which is currently in the process of retendering.
[Operator Instructions] The next question is from the line of Sachin, individual investor.
Am I audible?
Yes.
Congratulations on very [indiscernible] of results once again. So last question. So sorry to put you in a spot, but my question is with regards to note 5 and the results and the allotment of 15% of said equity. Can you just elaborate in terms of the thinking around going cost said equity and not looking at ESOPs or commissions associated with that? And also, are we looking for BLS E-Services to be listed in the near future?
Okay. So we've actually -- maybe you were not present earlier, but we responded to this question earlier. But just to summarize, BLS E-Services has a bunch of businesses, which are banking correspondent business. It's e-governance as well as Digital Services. So these businesses were started about 7 to 8 years ago.
And during that period, the promoters have spent an enormous amount of not only time and effort, but also their knowledge and also their contacts and also their own funds they have deployed in the business and given guarantees against their personal assets. So all this time, they never got any compensation for providing all of these services.
So the Board considered it appropriate to give some site equity to the promoters on account of the work done in the past and for future, obviously. The reason behind not issuing ESOPs or commissions, one, because it is -- it's a cash outflow to the company, which we didn't -- we wanted to conserve. And the other thing is not tax efficient to do any of that. So various reasons went into it, and the Board considered all of that before taking this call.
Okay. Are we looking to list that entity, the second part of my question?
That's something which is open right now. No plan -- immediate plans.
Okay. Another question. Is it possible for us to see monthly business update, like a few firms kind of do that. At the end of the month, we know how many data applications out of which markets have been processed or just to give a visibility in terms of how we approach towards the coming quarter. I know we've had very good results, but just in terms of being comfortable through the quarter, is that a possibility?
We can consider -- we can consider this, but since we're working in a global environment, globally, we get our information [indiscernible]. So yes, we can look at it. We have, at the moment -- thanks for your suggestion. We'll look at that.
Next question is from the line of Ankit [indiscernible], Individual Investor.
So I have a few questions, sir. Am I audible?
Yes, Ankit go ahead with your question. You're audible. We can hear you.
Sir, I just want to know that in terms of financials, so other income, which is double as per as Q-o-Q and Y-o-Y. So what would be the main reason for it?
So see, other income has gone up mainly. They were -- one is the interest. As you have seen, the interest rates have gone up, so that has increased the interest on [ FDs ]. Finally, there has been a reversal of excess provisioning against the debtor. Because during COVID last year, there was a provisioning as per the accounting standard 37. And this time, it has been reversed because those collections have come in and the debtors have come down.
So it has done a reversal of around INR 3.5 crores of excess provisioning, which has been reversed.
Okay. Okay. So sir, we have issued a bonus share right now. And last time also, we have issued a bonus share. So what would be the main reason for issuing a bonus share in a very short span of time?
No, I think the main reason for issuing bonus share was to increase liquidity in the market and to reward our shareholders from -- so that was the main reason.
Okay. Okay. And sir, currently, what is our [indiscernible] visa business? What is the status of that in terms of renewal?
Under tendering process.
Okay. Okay. Okay. And sir, so how much we earn from these value-added services that we have in terms of revenue and the profit margin?
Profit margin is similar. We are doing, I think, around 15% -- more than 15% profit margins on an annual basis. So this is what we are doing. So the profit margin is the same.
Okay. Okay. And sir, one last question. Do you have any CapEx plan in the future?
CapEx plan, average -- acquisition plan we have and CapEx, what we are doing every year to refurbish our INR 10 crores to INR 15 crores we use, refurbish our offices globally. And on top of that, if additional contracts come, that will require CapEx.
[Operator Instructions] The next question is from the line of Neha Mehta, Individual Investor.
Congratulations on the good set of numbers. I just had one question regarding CapEx required for the Digital Services. So do we have any plans for CapEx in Digital Services?
There is very limited CapEx required for the Digital Services. Most of the CapEx goes into acquisition finance and as well as the new contracts that we get.
So sir, is there any acquisition in pipeline then?
There's always a list of things that we are looking at and some come up to maturity and then we announce it.
[Operator Instructions] As there are no further questions, I now hand the conference over to Mr. Shikhar Aggarwal for closing comments.
Thank you, everyone, for your participation in our Q3 FY '23 earnings call. In case of any further queries, you may get in touch with our effective PR or feel free to get in touch with us. We look forward to interacting with you next quarter. Thank you.
Thank you very much. On behalf of BLS International, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.