This lockdown will help break the chain of virus. And as and when borders reopen hopefully by June-July, we should see travel back to track although more to visit their family and relatives
NEW DELHI: The travel and tourism industry is among the hardest hit the coronavirus pandemic, including those in the passport collection and visa services business. But BLS International, an outsourcing service provider for government and diplomatic missions worldwide, has managed to buck the trend of companies going under.
Edited excerpts from an interview with Shikhar Aggarwal, joint managing director at BLS International who explains how his company stayed afloat.
1. How has business been in the last year for BLS (2020-21) which has been the year of the pandemic so to speak?
Despite the challenges and a pessimistic global scenario, we have managed to register healthy financial performance. This has been possible because our consular and citizen services and banking correspondent business have performed wonderfully well. During the third quarter, company witnessed a 15% sequential increase in revenues due to improvement in Punjab, Starfin (banking correspondent services being carried under subsidiary) and consular services operations and registered 280 bps improvement in gross margins.
In line with our cost cutting measures, our employee costs came down from ₹17.9 crores in Q3FY20 to ₹12.5 crores in Q3FY21. Although, the company reported a decline in revenues mainly due to closure of visa processing services business worldwide, we managed to limit the decline by continuous focus on cost rationalization initiatives and have realigned expenses in line with the current level of business operations. For 9MFY21 (April December 2020), reported PBT (profit before tax) is at INR 32.7 crores compared to INR 46.6 crores in 9MFY20 (April-December 2019) which is exceptional in relative terms if we compare with the industry that’s grappling for survival.
During these times, we have seen the trend that travellers are ready to spend extra money just for ease of access with our premium / priority / mobile services. In an effort to minimise physical interaction, applicants now prefer – premium lounge wherein only single applicant is entertained at one point of time, mobile miometric service, where the applicant prefers submitting the application at the comfort of their home or office, and the courier service instead of coming over to collect the passport.
2. Can you give us any comparative figures between 2019-20 and 2020-21 that will help understand how travel and tourism related business has gone down because of the pandemic?
Last financial year, our consular services business did well barring initial two or three months of the year. And during the lockdown, we were honoured to be part of Vande Bharat Mission by Government of India which is world’s largest repatriation exercise, even in such adverse times we worked hard to accommodate consular needs of our fellow citizens through our consular business.
The revenues during the last financial year (FY21) were mainly contributed by Consular and Government to Citizen (GtoC) services especially Punjab. Our citizen services contract with the Punjab government has started functioning at pre-Covid levels where we processed almost 1.5 million applications during the third quarter. The Passport and Consular services have also picked up momentum and is now close to pre-Covid levels. Our banking correspondent services being carried under subsidiary, StarFin, continues to perform well. Through this arm, we were delighted to be part of Direct benefit transfer (DBT) programme by the Indian government wherein our venture alone has facilitated transactions to tune of Rs350 crore to the marginalised section of the society during the covid-19 period.
3. How have you been able to cope with the setbacks caused by Covid? International travel both inbound and outbound have been severely affected.
We operate in asset light model and with our focus on diversification towards e-governance services and continuous efforts to streamline the costs in line with level of operations have made us stand strong through the global pandemic. As mentioned earlier, our Punjab citizen services and consular services have shown signs of growth with volumes at pre-covid levels while visa application services ready to deliver in the coming quarters with better realizations on the back of increased usage of value-added services. While our most recent project in UP has provided employment to more than 10,000 youths and its revenues should start kicking in from this financial year. Last 3-4 months have been quite exciting for us, as we bagged 3 new projects including UP Project, Thailand visa processing in India and Brazil visa processing in China. All the three projects have started to pick up and we foresee few more projects in the vicinity which we shall announce as soon as the official communication from the respective governments is received.
4. India is in the grip of a second wave of the pandemic. Many countries have stopped flights and travellers who have even passed through India/Pakistan/Bangladesh. By when do you forsee international travel getting back to normal?
I believe this lockdown will be helpful in breaking the chain of the virus. And as and when borders reopen hopefully by June-July, we should see travel back to track although more to visit their family and relatives. I believe staycations and revenge tourism is here to stay as more countries emerge from lockdown. A recent survey conducted by schengenvisainfo.com shows that 95% of people polled were eager to travel abroad as soon as travel bans are removed; people want to visit their families as soon as the border opens.
5. Have there been many queries from group and individual tourists that make you confident that travel will revive soon? Which particular countries or geographies have you got most queries about?
Absolutely, our local teams have received enormous requests about when the visas shall open, while our social media platforms have been flooded with queries on which countries can be visited and when shall the borders reopen. Travellers have been trying to seek information for Spain, Thailand, Canada, Brazil and Lebanon. While we have seen surge in Indian Visa applications from countries such as Canada, Oman, China, UAE, Russia and Hong Kong in the past quarter compared to Q3 FY21. We are a trusted partner for Indian missions for over a decade now by providing visa and consular services in countries like Canada, UAE, Russia, Singapore, China, Malaysia, Oman, Austria, Poland, Lithuania, Norway and Hong Kong. BLS has developed the entire system into a seamless progression including automation of processes, application submission, appointments, helplines, collection and remittance of fees on applicant’s behalf, biometric enrolment and a host of value-added services for the applicant’s convenience.
6. Was the message from Prime Minister Narendra Modi last week that lockdown should be the last resort a hopeful one for businesses like yours?
I concur with the thought of our Prime Minister Narendra Modi that lockdown should be the last resort. And it is definitely a moat for the business.
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