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Bls International Services Ltd
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Ladies and gentlemen, good day, and welcome to Q4 FY '21 Earnings conference Call of BLS International. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Lokesh Pareek from Christensen Advisory. Thank you, and over to you, sir.
Thank you, Martin. Good evening to all the participants on this call. Before we proceed to the call, let me remind you that the discussion may contain forward-looking statements that may involve known or accounts, uncertainties and other factors. So it must be used in conjunction with business risks that could cause future results, performance or achievement to defer significantly from what is expected or implied by such forward-looking statements. Please note that we have mailed the results and the presentation, and the same are available on company's website. In case you have not received, you can write to us, and we will be happy to send you the same. To take us through the results and answer your questions today, we have the top management of BLS International, represented by Mr. Nikhil Gupta, Managing Director; 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 session. With that said, I will now 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 Q4 and FY '21. Hope you all are in good health and your family also. Let me now give you an update on the global travel situation. Due to outbreak last year, individuals all around the world socially distanced themselves. People, on the other hand, are now willing to travel after vaccinations. According to a poll conducted by the American Express, 69% of the Indians are planning to opt at least one international travel in the near future. With all COVID-related safety precaution in place, we have reviewed prospective visa applications for India, in Canada, China, Russia, Singapore, Malaysia, UAE, et cetera, for leisure in government in India, Thailand and Nepal, or the Brazilian government, in Lebanon and the new contracts for the private [indiscernible] in China. We recently, as you know, also won the contract for the Thailand Embassy in India. So we have started working to resume operations for that also. For the Vietnam Embassy in India, for the Cyprus and Qatar, for Belarus in Singapore, Malaysia and Philippines, et cetera, and for Spain and 57 locations. We have also started operations for the Estonian e-Residency project in Brazil, Thailand, Singapore and South Africa and from the UAE attestation for the UAE government in Philippines. Indian travelers are also not behind their global counterparts. In fact, just before the second wave hit the country, Indians were keep engaging in and, in some cases, overpaying for returns travel. Furthermore, recent advancement of [indiscernible] efforts has reawakened individuals' travel aspirations. On to financial performance of the company. Despite the global challenging environment, we have managed to post healthy performance in the quarter and during the year -- financial year 2021. Our total operating revenues during the quarter stood at INR 144.5 crores. Our EBITDA stood at INR 10.1 crores, up 42% year-on-year; and our PAT, INR 23 crores, up around 170% year-on-year. The revenues during the quarter were mainly contributed by consulate and duty-free services, especially Punjab. If we look at our citizen services expertise, the Punjab contracts have started functioning better than pre-COVID levels where we have processed almost 1.5 million applications during the quarter. The passport and consular services also picked up momentum and is now close to pre-COVID levels. Our banking corresponding service being carried on the subsidiaries [indiscernible] continuously performed well. On the profitability front, we have seen minor expenses in line with the business operations, and also, the share of the premium value-added services has improved significantly in the last 3 quarters. We have noted a trend that travelers are willing to pay a premium to avoid interaction physically. The advance mobile biometric services herein we are confident that how it is to pick up their application and different services like premium lounge, Prime Time Visa, et cetera. All these services add -- definitely add to our bottom line and top line. So we expect an increase in margins with the resumption of visa services and countries opening up their borders. On the new businesses front, and in Q4 '21, we have had contracts from the Embassy of Greece to operate 15 centers in China and Embassy of Portugal to upgrade more than 30 centers in Russia. We've also started a contract with the UP government to operate more than 10,000 centers who are in different citizen services. We also won a contract with the Thailand government in India to issue visas for travelers going to Thailand. Earlier during the year, we're also in the contract with the government of Egypt for issuing movement certificates. We were also credited by the Royal Canadian Mounted Police by the government of Canada to provide biometric services and the Estonian global E-residency contract that we started in 5 countries. We have -- you would be glad to know, we have also started operations in countries -- received operations for countries like Belarus and Philippines, Malaysia, Singapore and Morocco visa in India, Vietnam and Saudi Arabia. Our balance sheet continues to remain strong with cash and bank balance sheet to the tune of INR 277 crores. As a prominent industry player, we at BLS are committed to invest in most innovative and advanced technologies from time to time. We are always on the lookout for highly regarding M&A opportunities in tech enabled service. Thank you. This is all from my side. I now hand over the call to Amit Sudhakar, our CFO, for updates on financial performance. Over to you, Amit.
Good afternoon, everyone. Let me take you through the financial performance for the quarter and financial year 2021. We reported operating revenue of INR 145 crores, a marginal decline of 4.4% Y-o-Y, mainly due to a decline in revenue from Visa business. Our EBITDA for the quarter stood at INR 10 crores compared to EBITDA of INR 7 crores in corresponding quarter last year. The improvement was mainly due to realignment of our costs, in line with our revenues. The company generated a net profit of INR 23 crores in Q4 FY '21 as compared to INR 8.3 crores in corresponding quarter last year, and PAT margin stood at 15% in Q4 FY '21. During the quarter, company received a tax credit of INR 6.5 crores from U.K. government, and there was a reversal of tax provision of the earlier quarters during Q4 '21. For the full year FY 2021, company registered a revenue of INR 478 crores compared to revenue of INR 786 crores in the previous financial year. The decline in revenue was mainly due to a decline in visa processing services business. However, we managed to limit the decline in business with support of our counselor services, B2C services and bank correspondence services. During the year, company generated other income of INR 18.6 crores, including plans of about INR 8 crores from different client governments, interest income of around INR 6 crores and the balance on account of Forex -- foreign -- Forex gains and alternate miscellaneous income. Cash balance of the company has increased by INR 38 crores to INR 277 crores, and net worth of the company has improved by INR 31 crores to INR 460 crores during FY 2021. We continue to remain a zero-debt company. The Board has approved a final dividend of 25%. With this, the total dividend for FY '21 stood at 50%. This is all from my side. I would request the moderator to open the call for Q&A. Thank you.
[Operator Instructions] The first question is from the line of [Deepak Mehta ], an individual investor.
Sir, my question is around the new tariffs with Amazon. So what kind of visa revenue we can expect from this partnership. And what will be the revenue stream? Is it onetime revenue, once in a year, or is it based on the consignment or -- so if you can throw some color on this?
This is Shikhar Aggarwal. I'm the Joint Managing Director. So see, as you know, we have started working with various governments in India, and like that, we won a contract for the UP government where we opened 10,000 centers providing different government services, like death -- birth certificate, death certificate. These are all exclusive centers that people will have to come to these centers. So we always keep on finding additional sources of revenue, and e-commerce is definitely the future. So definitely, we are talking and we have -- we are working with some e-commerce companies like Amazon. In the future, there are more companies in the pipeline. We will be providing artistic e-commerce services through our centers to the applicants who wish to come on center and avail these services. So revenue, as and when the transactions start to happen from this, then we can give you a more understanding about that.
Okay. So this is -- so when this service is going to live with our company with Amazon commencement -- is there any commencement date when we are going to start these services to our network?
[indiscernible] I don't think that becomes slow. Now we have resumed. We are fully starting all our centers in UP. So I think we will be -- commencement date, we will be letting you know, shortly.
Okay, sir. And what kind of services we will be providing to -- let's say, we will be storing their goods, or what kind of services it will be or [indiscernible]?
So there will be any products that people choose to buy from any of these e-commerce websites like mobile phones, et cetera.
Okay. So we will be acting as a local store type, right?
Correct. Correct.
Okay. I thought we will be also doing some KYC for their credit cards or Amazon [indiscernible].
Not right now. Not right now.
[Operator Instructions] The next question is from the line of Harsh Patel from Alpha Alternatives.
I just wanted to know what does it take to win a new contract in the visa processing business? Is it lower pricing that you charge or your relationship with the government? And what is your share in the visa processing business?
Thank you for the question. As you know, BLS International is one of the largest outsourcing consular service provider where we are now the preferred government is business service provider across the world. We are working with 46 client governments. We are in 66 countries. We have more than 12,000 centers, and we have 50,000 employees. Till date, we have processed more than 52 million applications. As you know, last year itself, we have won 7 new contracts with different governments and some remarkable contracts being broadly in government in China, Portugal, the government in Russia and Estonian government. So all these contracts take a long time to get qualified for visa [indiscernible], as we have been mentioning. And now we have started coming in the last 7 contracts now. This year also, we expect to win 2 more contract. Tenders are going to come in, in the next 3 years. We have changed our business development strategy. We have deployed a lot of people. It depends on country to country. Some countries work on technical and financial mix. So there are certain market gate for technical and serving for prices. So definitely, we have become a technically strong company as we have grown as a company. And definitely, we are paying more importance of the technical the proposal and getting good margins. So it is a heavy competition of between technical and financial.
Okay. So what would be the majority of -- I mean the competition is very intense, if I'm not wrong. So if you want to win up countries, for example, say, Australia, so is it based on these factors only or anything else, or mainly what would be the biggest factor [indiscernible]?
The biggest factor would be the solution, how responsive are you to the government's request. We provide a solution wherein the platform is latest technologies and latest in the system. We provide access to the government. So we don't understand what is actually happening in the center. There's a tech-enabled system. So we are providing a technologically advanced software. So I think with the changes in systems, and this is what governments are looking for. And that is the reason that we are also -- as you know, we are [indiscernible] the [indiscernible] government industry at [indiscernible]. So we are actually charging a good amount of charges from different government. As we grow, our focus is to increase our targets.
Okay. Okay. And what will be your market share in the visa processing business?
See now, obviously, we look forward and making a change, and we don't know exactly how many numbers happened pre COVID in the market. We were getting around 10% to 12% of the application across the world. Now with the new contracts, we are hoping as the new event serving place particularly for our clients, we are hoping that we might get -- increase our market share for the existing contracts to 15% over the next 1 year. And definitely, in the next 2 years, we are very bullish on getting new contracts that will definitely increase [indiscernible].
Okay. So what would be the top player of market share who would be in this space?
So see, in the market right now, as we spoke earlier in the last 2, 3 years, market was outsourced. And we started only market some 3 -- 2 years back when we were only also 30%. Now maybe it has much improved. We do not know the exact numbers of those top players, but definitely, top player is having much more market share than us.
Any approximate number? 30%?
Maybe 30%, 40%.
Okay. Okay. My next question is on the Uttar Pradesh contract. So is it similar to the Punjab contract? And the size of the contract, can you tell me? And the revenue guidance that you can give?
Yes. The contract is similar to the Punjab movement contract in terms that we are providing similar kind of services like birth certificate, death certificate, all citizen services. The change is that -- in these contracts, the 10,000 centers that we've opened have given us by the government. In Punjab contract , it was an asset-light model where everything was provided by the government, be it [indiscernible] be it offices. In this contract, nothing [indiscernible].
Hello? Hello? Hello? Hello? [Foreign Language]
Ladies and gentlemen, please take a minute while we wait for the management to get connected to the call. Ladies and gentlemen, we request for you to please hold the line while we wait for the management to join the call.[Technical Difficulty] Ladies and gentlemen, thank you for patiently waiting. We have the line for the management back in the conference. Over to you, sir.
Yes. So as we talked about the UP contract, I hope it clarifies your mind on that.
[Operator Instructions] The next question is from the line of Deepak Mehta, an individual investor.
Yes. So my question is around, sir, do we provide visa to our customers. So do we have any customer satisfaction level or NPS to know how we are improving by providing good products or services, as we have mentioned that we are not doing agile stuff and all this?
Thank you. Thank you. I think there is definitely a very important and very good question. Thank you for that. Definitely, we -- being a customer service-oriented company, we have 2 customers: government and the citizens. Definitely both of them are very important to us. Customers, as you know, that we process 52 million applications till date. So we are dealing with a lot of customers on a daily basis. We're running a global operations, taking track of customer satisfaction. This is very important. So what we've done is we've set up a system in place where we have quality managers. We have a positive team at different levels. There is escalation metrics. There are customer's feedback. As well, we then deployed softwares, wherein people come to us after submitting their application, they are prompted to give us a rate . So all that is happening on a regular and constant basis, wherein reports are also submitted to the government. And we are also doing industry audits -- surprise audits. At the same time, it's the same thing done by the government also. So I think these all see are very necessary for the stability of the company and providing those services in the long term.
And my next question is around our service we provide is very generic, and there's a lot of competition. So what is our mix for USB digital dependence? How -- what is the focus of the management going forward that the long-term [indiscernible], how do you want to differentiate from our competitors?
So see, first of all, the service that we provide is not generic. It is -- it took us 15 years, as we told, to qualify for these sectors. Right now, in the world, only 3 to 4 companies are qualified to run their process centers, and we are one of the only Indian company. And we are the only company which is also qualified in India for these centers. So definitely, service centers are performing very professionally, wherein we are dealing with customer data, and we have to follow GDPR compliance laws you have to show the data and protection because you have to have software data meeting policy. A technology that we will do definitely has to have that strength to handle increased load or increased load. You have to give access to the government. At the same time, ensure your data is secure. So I think these are some of the trends that we have shown over the years to different governments that we are working with. When you give the biometrics, the error is accounted as an industry standard error is drastically lower. All these things lead to, definitely, a good name of the company and my decision-makers when they're awarding tenders. And in the future, we feel going more and more towards as they see the progress of the company are actually giving us more tenders. As you must have seen in the last year, as we spoke, we've got a couple of tenders, and a lot of them were from the competition. Some of the companies out theme of some of the countries we tender from the competition. This is the reason that we are winning.
Okay. And going forward, as we expect [indiscernible] versus [indiscernible], so what kind of revenue growth we can see in the next -- earlier or next 2 to 3 years? What will be your guidance then? We have put cash and different operating cash flows. So any new services you want to expand, or what will be the future plan with cash agenda or access to cash [indiscernible]?
Yes. So see, we are very excited for the company. Last one year has been tough for the industry and on the company also. Still, we managed to reduce real [indiscernible] expenses as we contained and increased our revenue in the existing contracts, and also [indiscernible]. Yes, so I think that is the reason that last year itself, we have managed to get good numbers. This year, we are very started with travel opening up our offices across different parts of the world have started to open up. India is definitely used to a right to return in terms of travel. But we foresee to achieve at least to target early 2019 level of numbers, which -- with the increase in revenue from the existing contracts and [indiscernible] of our expenses. So definitely, I think this year, this is what we target to achieve.
The opportunity you are looking forward to with cash holding balance sheet and the cash flow, we will be generating in the future?
Yes. So regarding the cash on the book, right, that is the question. Governments...
Yes, sir.
So as I said, our cash has been growing over the years. And we are seriously looking at organic as well as inorganic growth. And hopefully, this year, you will -- we will be able to announce if we can close a couple of inordinate growth targets as well as expansion. As Shikhar talked about new contracts, we are looking at some big contracts where we will require -- some additional cash requirements will be there to scale up operations if those big contracts come in. So we are very positive in the current year to come up with some utilization of the cash which is on the books.
Okay, sir. And the new contracts we will be bidding and we are winning from our competitors, so the margin rates are the same what we had in FY '19, right?
Yes. That's right.
The next question is from the line of V.P. Rajesh from Banyan Capital.
Yes. So Shikhar, first question is that in the Q4 revenues, what would be the percentage from the event housing services versus the Punjab and UP contracts and the staffing businesses we have? If you can just share the split of the revenue across those 3 things.
Yes. So Amit will share it.
Rajesh, see, the ratio has been in the range of 15% to 17% from other businesses and counselor services still [indiscernible] a little bit bigger -- biggest.
Okay. Okay. And Shikhar, you were talking about that our offices are located abroad. So as you mean like 100% of operations are back to normal, where are we on that scale? 50% or 70%, if you could just give some color on that.
Okay. So obviously, as you know, there is a situation in India going on, definitely offices in India have not been back to normal. But there are some continues that are still probably closed down. If you talk about the major countries, in Russia, Africa, government has permitted us to start opening some of the centers. And wherever we have opened the centers, we are seeing demand start exceeding the capacity of the centers. So definitely, people have started to come in sectors we are asking for appointments. But currently, governments also. Accordingly, also the policies, we are right now giving a limited number of slots and results. So whatever slot and availability is there, it is full. So we see right now of the percentage number, it's very difficult to give any exact percentage what could be open, but definitely, I would say more than 50% of that what you said now. More than 50%, we have been started to open. Numbers are starting to this month itself started to open up. So I think in the next -- within the next 3, 4 months, we feel as a company with the different governments also opening up their borders, with vaccination drive going on, with pent-up demand and the reverse travel that is expected, we expect us to definitely for outlook.
Right. Okay. Wonderful. Revenue guidance, you talked about way back to fiscal year '19. So what could be the margin there? That's -- should it be higher than your banking margins or maybe at the same margins?
Yes. Amit. So basically, I think, Rajesh, definitely, see, 2 reasons I view the margins will be definitely higher than '19 level. There are 2 reasons for it. First is that we have definitely realigning our costs, and some costs will be realigned for the long term. Obviously, we have to come back to the cost [indiscernible]. Definitely, a lot of services that we've got a chance to produce in this lockdown. And we have sent those services in our various different contracts. So those are also giving us a good margin. And so definitely some value-added services will definitely increase the margin and real expenses. Those are 2 things that we need to increase the margin. And also, service fee hike around software contracts, we have managed to get a service fee hike with the government. We are in negotiation on the other contracts. So I think that would also lead to an increase in margin for us.
That's wonderful. So do you think -- I mean, what will be the margin guidance for this year then?
I think it will be very difficult to give an exact number, but it depends on opening up exactly what Amit talked about. It will be definitely higher than what we did in 2019.
I think, Rajesh, we'll get a much better picture by quarter 2 when these spaces sort and the numbers start coming in. We have opened offices, and now numbers are trickling in. Once that goes up, we will have a better picture on how things are getting adjusted.
Understood. Understood. And you were mentioning, Amit, [indiscernible].
Rajesh, can you please repeat? We can't hear you.
You were mentioning about a write-back of about INR 6 crores, it could be INR 6.5 crores. So if you can just elaborate that because I missed the detail. What was it about?
Of the INR 6.5 crores?
Yes. Yes.
So he heard it from you, Amit. You have mentioned.
Rajesh, basically, if you see in our quarterly results this time, there's a credit of tax after PBT of about INR 7 crores. So that's basically a major fund is INR 6.5 crores, which has been funded by the U.K. government as a report of the tax, which we had losses on which the deferred tax, they have paid it out as an incentive due to COVID. So whatever the losses we had and the tax asset that as we have created, we got that [indiscernible].
I see. Okay. One other question. Yes, one more question. The other income was quite high year-over-year at INR 8.2 crores. So any number of things in there as well?
Yes. I shared that. If you see that overall for the year, sales INR 18.6 crores is the other income. In that, about INR 8 crores is the grants from different countries we got during this COVID time. They were to -- subsidiary for salaries for admin as well as for rentals that we have added in the other income.
The next question is from the line of Harsh Patel from Alpha Alternatives.
Sorry if I lost you in between. Can you tell me again -- can you repeat the Uttar Pradesh question in the queue? I was asking about the model. Is it similar to [indiscernible] contract and investment you have done in the Uttar Pradesh contracts and the revenue guidance?
Of course. Welcome back, Harsh. So basically, as I told you, in UP, the model is that there is all offices and all the cash investment is done by the government, and we are -- we have our people train people in our office providing services. UP, the model is that everything is done by BLS, but by BLS that we have not incurred any investment other than the software. We have tied up with people called it Lebanon, Lebanon. So we have 10,000 people across the state of UP who have opened offices on our behalf. They have invested in the computers and the machinery. And they are using our software. We're just talking to the government system to provide these services. So that is how the modeling UP is working.
Okay. So any revenue guidance that you can give? Because that was, I guess, INR 6 crores of revenue that you used to make, right?
Correct. Correct. So basically, see, we only completed the rollout recently because 10,000 is a big number of centers that you have to roll out across the state. So I think right now, because of COVID, things slow down, we have won the contract during that period. So I do not have the exact numbers because there is no [indiscernible] value to a contract. So that is why probably in the next quarter when we have more understanding of the numbers we get, we can give you. But one thing we can tell you is that we have done almost a [indiscernible] investment in this contract in terms of -- other than the software and the OpEx cost that we are incurring in terms of the salary of the head office people.
Okay. Got it. Got it. And can you give me the CapEx guidance for FY '22 and '23 you have budgeted?
So normally, our normal OpEx for operations, CapEx is in the range of INR 5 crores to INR 7 crores. The big project comes in, and there's additional CapEx for water running. Normally, it's INR 7 crores also. But as because of COVID, we have -- operations have been resumed. Definitely, we have changed some offices and realigned some expenses. So definitely, there could be some CapEx on account of some additional offices or change offices locations that we have put rate. And CapEx, in terms of new contracts that we were in, from that, there could be some CapEx [indiscernible].
What is the ballpark figure for FY '22?
The CapEx ballpark figure?
Yes.
So Amit, during the last year, you think?
No. FY '22.
Again, we are working on that INR 7 crores to INR 10 crores as a normal CapEx. But anything we do extra or we get a new project, those will be as for the project requirement. So we don't know how much the project type and the initial requirement will be.
Got it. And on the Spain contract, when does this expire? And what will be the renewal process? What are you hearing from the Spanish government?
Yes. So as we told you that now we have been discussion with the Spanish government across -- as like we are with the government. The contract is already till next year or end or something. So -- but we are -- all the loans are giving extension for the contract, same way we are in talks with different -- all the governments. So we're definitely hopeful on getting extension of these contracts also.
So because of COVID, you get your extension, that is what you're saying.
Definitely, all the governments are giving extensions.
Okay. And I just wanted to ask you on the tax guidance because the tax rate is comparatively low to the company that I see. So what would be the guidance on the taxation side for the FY '22?
So the -- we are working on around 15% of the tax liabilities, but it depends on the mix of profits and which country we are getting it. So like India and overall, it has been around 15%.
Okay. And just my last question is, so you said you have -- no, I just wanted to ask about the cash balance that you have. You said INR 277 crores, right? So where is this cash you have invested? And this is in mutual funds or in a quick funds? Can you tell me?
So all the investment is fixed deposits with banks only. We have not invested anywhere else. No bonds or nothing else, except pretty positive banks.
The next question is from the line of Mithun Aswath from Kiva Advisors.
Great. Just...
I'm sorry, Mithun, we cannot hear you very clearly.
Can you hear me now?
This is better.
Yes. Just a question on -- in terms of the cash balance, does the cash lie in the Indian entity or in the international entity? Since you have such a large cash balance, is there any proposal to increase your dividend payout in the coming years? Just wondered your thoughts on that. And what is the utilization of that cash?
So as we explained earlier that this cash balance, majority of the is in -- everything is in fixed deposits with the intent that we are aggressively looking at seriously into the acquisition. And when you utilize this pump for acquisitions as and when we get up, we close some deals. Dividend policy has been there, which has been approved by the Board. And as for that, we have been working on a 15% dividend of the -- what the profit we generate each year. So if you see in the current year, we have a profit of around INR 50 crores, and INR 7.5 crores is what we could do, is what we have done in the current year. Accordingly, we have shared churn with it. But we can go back to the Board and work out improvement on the dividend payouts, subject to the Board approvals. But intent is to look at aggressively new contract, big contracts, which is required. We can utilize the funds for that as well as for the inorganic growth. So the whole objective is that at the moment for utilizing these funds.
Yes. Just one more question. In terms of geography, which geography would be generating the most amount of revenue in terms of potential since, obviously, markets like South America and India are still grappling with COVID? And maybe on the U.S. and some European markets will open up. If you just throw some light on that, that would be useful.
Correct. So see, definitely, currently what we have been seeing is there has been increased revenue from countries in GCC from countries and North America region also. So those other countries right now that where we are seeing increase in revenue. Asia has not started to come in, in that level.
And just wanted to understand what are the entry barriers for this business because you have one other unlisted quite a large competitor. What -- and normally, the -- your right to win in this space? Is it that you bid lower or you have certain experience? So I just wanted to understand how this works. And normally, what is the tenor of each of your projects?
Correct. So see, as I told also before in the previous question that we are working for new government. For example, the Portugal government in Russia [indiscernible], which was their competition and probably a lower rate. So we are not here just to compete on price. We are focusing as we grow as a company on quality of tender and our response on technology. So that are the reasons that are leading to tenders awarded to us, definitely, our service quality and the requirements of the government and the response to implementing those requirements I think those are the factors that is leading. For a lot of years, this industry was nominated by some players. So now we see, as a rising company, definitely, governments have seen our delivery over the last 6, 7 years with different client governments, and they are giving us work. We are now actually qualified for the tender, bidding for them actually, giving results, willing the tenders. The next, you will see BLS getting more and more market share.
The next question is from the line of [ Ankul Jain ], an individual investor.
So coming to the same question on cash. What I'm trying to understand here is, as you are saying, you are keeping this cash for utilizing in the future for some acquisition. Do we have any time line for this? Because the similar response we got in the previous earlier calls also, so I think when we have huge cash, 2 to 6 year cash there, and every year, we are generating aroung [indiscernible] this year, then there should be some -- we should keep the cash only in time on -- otherwise, the cost of equity, so I -- we should return this to shareholders. So any view on that?
Yes. Amit?
So see, yes, last time we talked about this. And unfortunately, because of COVID, a couple of the cities, a couple of deals working on got delayed or didn't materialize. But it is -- now, things are looking much better. And hopefully, in the next couple of quarters, we will have some positive news [indiscernible]. Yes, we'll take your point. If we don't foresee in the next couple of quarters, we may go back to the Board and take a call of higher disbursement, subject to Board and how the Board needs to decide that.
And then, there is the quantity, for example, [indiscernible] the total [indiscernible].
The next question is from the line of [ Bharat Singh ], an individual investor. Yes. So I just wanted to ask in terms of organic space, what -- which exactly area would be looking at for utilizing cash?
So we are definitely looking at tech-enabled businesses. Right now, as we -- we as a company are providing services to different governments. So we are looking at companies maybe in a similar line of business across the world. And also, we are looking at different companies, I think tech-enabled services, collecting money from the [indiscernible]. So model is the same when we want to work on. But we are looking at companies having technologies.
The next question is from the line of [indiscernible], an individual investor.
Yes. Yes. I have a question around the management, which is like I see there are 2 managing directors, like one is Nikhil and you. You are the Joint Managing Director. But I just wanted to understand the distribution of responsibilities because mostly, I am seeing that you are represented in -- representing all the meetings and the other conference that I saw in YouTube videos and other things. So just wanted to have a background or some more details on that.
So see, definitely, I am representing the company because I will feel us we decided that I will probably be the spokesperson and he will do more of the work. It is not like that. But Nikhil is taking care of the domestic business. He has his strengths and aligning, and we had some big contracts with the Punjab government currently also and the UP contract. And we are now in the process of having different contracts. And with me, I have my whole team, my Chief Operative Officer, my Chief Business Development Officer. Those are the people who are actually running around, and they have their entire strength on the ground. So it is not like we have only 2 people probably as the spokesperson of the company, but our entire team is there on the ground actually delivering the work.
You want to know anything about [indiscernible]?
Yes. Yes. Definitely. I wanted to -- I also want to hear more from you maybe in some other meetings or maybe in some other presentation. I just wanted to see you talk.
The next question is from the line of V.P. Rajesh from Banyan Capital.
So Nikhil, I will go ahead and ask you a question about Punjab. We are still getting around getting our funds back. So any color on the timeline, and what the issues are?
[indiscernible] you asked the question. The coincident happened to be taken in some figure, and the whole purpose is meeting the top officials in the government of Punjab. And I must say that the government is very keen on a settlement of our outstanding, and the business won't -- like it happens in [indiscernible] governments, they want to reconcile everything to the last rupee before they pay out the money. They don't want to get into any audit and other queries. So all those things are going on. But we've reached almost a finality. I expect to have some good news for anybody in the next quarter.
Okay. So the expectation is that to have the money back with us, but it's been very [indiscernible]. Okay. Okay. Much appreciated. And Amit, you were saying that some of the cash may be utilized for large contracts that you are getting. So I didn't understand that part because I thought our business will require more OpEx. And for OpEx, you are anyway of a profitable business. So [indiscernible] my understanding. So can you clarify these?
So Rajesh, normally, what happens in these contracts, once we get, we need to put the infrastructure in place, get people on board, and the transactions take some time 3 to 6 months to start getting that breakeven. So you need that working capital, as you said, plus the initial investment in the infrastructure that time in the office space, the IT infrastructure, getting people on board. And then the numbers start coming in, and they get into that momentum of the volumes that we are looking at. So normally, these contracts take 6 to 9 months to breakeven. So I'm talking about that money requirement during that period. It may be in the form of CapEx. It may be in the form of working capital also.
Also, Rajesh, we are developing our own software as we speak, as I told you that we are more and more focusing in having technology as the backbone of the company. We have been deploying many more as we grow as a company, the biometric technology for some of the technologies. We have some partners. We are trying to own most of the technology that we have really technologies for the government. So I think definitely, we are also looking at investments in that.
Yes. Some IT.
So for software, are -- right. So for software, are you capitalizing that expense feature, or are you flowing it through the P&L?
No. We capitalize and depreciate over the life of that software, which we have developed.
I see. So what is the kind of CapEx you are doing in this software development?
So [indiscernible] probably within this year and next year, I think we should be -- not doing a very aggressive write-off to start with, but probably I want to sure because we are still creating the budget for that. I cannot give you that exact number. It would not be a very, very high figure right now that we are focusing on. But I think when we make a budget for it, we can give an exact figure.
Okay. Yes. Okay. Because Amit, I'll tell you where I'm coming from because given your base business being so profitable with negative working capital, you have a negative working capital business, so even if you win a large contract or even if you win 2, 3 large contracts, I'm not sure that -- I can't understand why you would need money on working capital because you are -- your other contracts are generating so much of cash. So that's why I was just trying to understand why would you need cash for that. And now we can take it offline.
Okay. Sure. Sure.
Yes. And the second question or a suggestion is that you guys may want to think about doing a buyback because, let's say, I'll just do a very simple math that you're INR 800 crore top line this year, and you make 12% margin or INR 100 crore EBITDA, and you're trading, I think, much cheaply, almost 10x, right? So for the kind of business that you are, the valuation could be much higher. So I would request you that if you don't have any acquisition idea, which I know you guys are looking at very carefully, but if it is not done, let's say, a couple of quarters, then perhaps you should think about a buyback. That's all I have.
Thanks. Thanks for your suggestion. And certainly, we'll take it up to the Board for this.
Thank you. As there are no further questions in the participants, I now hand the conference over to the management for closing comments.
Thank you, everyone, for making this call today. We are satisfied with the performance of our company during the year, considering the global pandemic situation. I have good confidence in our capabilities and our business model as we see a very bright future for BLS International. During the year, we have streamlined our process. As travel restrictions are being lifted, we expect significant improvement in the top line and bottom line. With this one, I thank you again for showing faith in BLS International in difficult times. Thank you.
Thank you. On behalf of BLS International, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.