BLS International declared their Q1FY21 results and hosted an investor call to discuss the same and share their future outlook.
The quarter under discussion was anyways understood to be impacted severely, thanks to travel restrictions globally on account of CoVID. As such, the results didn’t surprise me negatively. Rather, I was relieved to see the company stay profitable (at pre-tax levels), despite the business headwinds. With their core business expected to remain impacted (CoVID) in the near term, I was curious to know how the management intends steering the company thru’ these turbulent times.
What I broadly sensed from the investor call:
- The management seems to be nimble footed (will continue to keep costs lean, but wont hesitate to add team at the slightest hint of business recovery)
- They seem to have their ears to the ground (implied by how they have managed to get new contracts in the last 6 months, even if it getting ‘their foot in the door’ with some important governments)
- They seem to acknowledge the dominance of technology in consumer behaviour and hence a focus on increasing the contribution from tech-enabled services (organic as well as inorganic routes would be adopted, as understood from the call)
- They seem to have learnt from past mistakes (as implied by their stance of wanting to opt for only those projects in which payments are received directly from customers without any reliance on governments)
Summary: Survival is the mantra, given the current business environment that the world is staring at. The debt free status and the surplus cash would surely help BLS sail thru’, there’s no doubts on that. The steps that the management is taking (new contracts + new tenders to be bid + increasing contribution from tech-enabled services) could ensure a higher revenue run rate than those seen in the past.
Read the attached note for the key call takeaways: