BLS International Services Limited (BLS) Q2 FY23 Earnings Concall Transcript

BLS International Services Limited  (NSE:BLS) Q2 FY23 Earnings Concall dated Nov. 09, 2022

Corporate participants:

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Amit Sudhakar — Chief Financial Officer

Analysts:

Ravi Naredi — Naredi Investment — Analyst

Nikhil Kapur — JM Financial. — Analyst

Nitin Padmanabhan — Investec — Analyst

Rajiv Venkatesh — Investor — Analyst

Shikha Kapur — Quant Investec — Analyst

Aniket Patkar — Investor — Analyst

Neha Jain — Investor — Analyst

Presentation:

Operator

[Operator Instructions] Ladies and gentlemen, good day, and welcome to the BLS International Services Limited Q2 FY ’23 Earnings Conference Call. [Operator Instructions] I now hand the conference over to Mr. Shikhar Aggarwal, Joint Managing Director, BLS International Services. Thank you, and over to you, sir.

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Good afternoon, everyone. I welcome you all to our earnings conference call for Q2 FY ’23 and H1 FY ’23 business and financial performance. I have on me — with me on the call today, Mr. Nikhil Gupta, Managing Director; and Mr. Amit Sudhakar, Chief Financial Officer of the company. Our performance for the second quarter has been in line with expectations, continuing with our growth trajectory.

We are all above pre-COVID levels, despite certain geographies not having fully opened up. As travel and tourism continue to recover rapidly across various regions, we are witnessing strong month-on-month growth in our business in visa and consular services. Business in certain countries have not recovered fully, yet business from — certain regions have surpassed the combined business per pre-COVID levels. So when the travel resumed in growth in these two countries, this should use our revenue significantly. In our visa and consular service business, the growth is coming from multiple fronts; new clients, new geographies, and enhanced services to existing clients. For instance, over the past few months, we have won contracts to process visa from the Royal Thai embassy in Kenya, from the Royal Thai Consulate in Mumbai, and New Delhi, Kolkata, and Chennai, and to process German visas in North America and Mexico. We are also focusing on the — value-added services, which will help us utilize our existing network infrastructure, thus enhancing efficiency in margins.

The past two months have been very eventful for our business correspondent as well as the e-Governance line of business. In line with our strategy to expand inorganically in June 2022, we acquired a 88.7% stake in Zero Mass Private Limited, a business correspondent for SBI in India. This acquisition has further strengthened our BC business. This move makes us the biggest banking respondent for State Bank of India across India. On the other front, our citizen service business continues to grow with several new contracts during the first half of the financial year.

Some of these include an agreement with the Karnataka government Department of Administrative Reforms and an agreement with Directorate of Registration and Stamp Revenue, government of West Bengal. Based on the progress in our BC and e-Governance line of business, and in the light of recent ZMPL acquisition, which has made the BC business a substantial in terms of size and opportunity, we have decided to merge the e-Governance and BC business into one segment, namely digital services. Digital services will consolidate all our services under the BC and e-Governance business and will include a range of value-added services without requiring much additional cost.

We foresee a tremendous opportunity for growth in this segment and we’ll have a clear focus with a delegated team in the future, independent of our visa and consular business service segment as well. In light of this, we have transferred our entire equity stake in BLS Kendra Private Limited, our only owned subsidiary into BLS E-Services Private Limited and other heavier subsidiary, thus making BLS Kendra Private Limited a step-down subsidiary of BLS International Limited. There would be no change in control of either of these companies, but it will facilitate future growth plans for our digital services business.

We aim to develop and grow both our segments into a sizable level of business for which we shall be progressively building some new contracts. We are also looking for inorganic growth opportunities on this front to complement our organic growth efforts. I would like to conclude by saying that all our regions are doing well. We firmly do believe that digitalization is the key in the post-COVID world, and we would always try to use cutting-edge technology for our services. This is all from my side.

I now hand over the call to Mr. Amit Sudhakar, our CFO, for updates on financial performance. Thank you.

Amit Sudhakar — Chief Financial Officer

Good afternoon, everyone. Let me brief you on the financial performance for the second quarter ended September 30, 2022. During the quarter, we reported a revenue of INR357.04 crores, an increase of 87.46% Y-o-Y basis and 30.87% Q-o-Q, mainly driven by continued recovery in visa and consular business as well as citizen service business. Revenue was also supported by a contribution of about INR40 crores from ZMPL during this quarter.

We are seeing a good momentum in all our businesses and are optimistic of sustained growth in the coming quarters. Zero Mass Private Limited is one of the largest business correspondent of SBI India. It comprises more than 15% of all the SBI business correspondents. That move give us BC business of pan India presence across all states and union territories. And bring out a total number of customer service points of more than 20 — more than 15,000 CSPs. For this, our BC and e-Governance businesses together are sizable enough to be pursued with deeper focus. It is with this perspective that we have launched these two lines of businesses under digital services.

The EBITDA for the quarter stood at INR56.78 crores compared to INR27.57 crores in corresponding quarter last year and INR31.36 crores, in Q1 FY ’23. The EBITDA margin for the quarter stood at 15.9%, which is more than 140 basis points higher compared to the corresponding quarter last year. The cost of optimization and higher volumes helped offset the impact of higher employee expenses benefiting the EBITDA margin for the quarter. The profit before tax stood at INR56.22 crores in Q2 FY ’23 as compared to INR28.45 crores in the previous corresponding quarter and INR32.41 crores in Q1 FY ’23. EBITDA margin in Q1 FY ’20 stood at 15.75% compared to 14.94% in Q2 FY ’22. Going forward, as mentioned earlier, we are investing in expanding of both our business 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 half yearly results in six months ending September 2022, our revenue grew 70.7% year-on-year to INR629.86 crores. The EBITDA stood at INR88.14 crores, growing at 90% Y-o-Y, while EBITDA margins improved by 143 basis points to 13.99%. The PBT for the period was INR88.63 crores Y-o-Y compared to Y-o-Y increase of 80%. The PAT for the period was INR81.69 crores versus INR47.71 crores in the corresponding period last year, a rise of 71.21%. This is all from our side.

We can now open the call for Q&A. Thank you.

Questions and Answers:

Operator

We have the first question from the line of Ravi Naredi from Naredi Investment.

Ravi Naredi — Naredi Investment — Analyst

Really, Aggarwal family, you give extreme pleasure result you have given to us. I am shareholders since long, but now I’m looking after a very good of best year and then move from here. Sir, my point is the interim digital business midway? How much are we going to invest in software and hardware? And second, what target you want to give for financial year ’23 and ’24 in revenue terms or in profit margin?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

See, as you know that 90% of our revenue used to come from visa and consular business, right, post-acquisition of this company. Now, 18% of the revenue is somewhat coming from the digital line of business, which includes banking correspondent and e-Governance business. And the model, as you know, is the same, wherein we collect upfront money from the citizen, it’s kind of an annuity business. So we are right now generating cash from that business itself to invest in that business. So right now, there is no investment required from BLS side for expanding that business. So we are expanding through the revenue that is being generated from that business. But we see good opportunity for growth in that business because volumes that we are getting in that business is very good. And going forward, we expect the margin and profitability of this business definitely to grow up because of the value-added services and other services that we will offer from those services.

Having said that, about your next part of the question regarding the next two, three-year guidance of the company, as I’ve said, that the company right now, the results that we have got is because of the application count that we have got globally, barring certain geographies like Asia and China, which are still semi-closed. So when those geographies start becoming normalized, numbers start coming in, then definitely, there will be a further growth on the number, and that will lead to growth in revenue and profitability of the company. On top of that, the additional growth in organic growth opportunities in terms of the new tenders that we are bidding, we are winning, we recently won a contract with the German government, Philippine government, Thailand government, and more tenders expected by new foreign governments. So that will definitely add to the revenue and bottom line. So I would say we are also maturing as a company in terms of our operations. So now I think we will — economies of scale will definitely kick in as we get new contracts, and there will be a further growth.

Ravi Naredi — Naredi Investment — Analyst

In future, visa and consular will be major revenue on –or some visa and the digital business will be more in compared to — gradually, now it is 18%, it will be maybe 25% or visa will be major?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Always, because we see major growth in visa and consular business in the coming years, the percentage will definitely, I think, will maintain the same percentage because there will be growth in both lines of business. Definitely, always, we will more — major focus is on the visa and consular service, where there will be major growth.

Operator

We have the next question from the line of Nikhil Kapur from JM Financial.

Nikhil Kapur — JM Financial. — Analyst

Congratulations on the fantastic set of numbers. Just a couple of questions from my end. One, for the next two to three years, any ballpark figure on how many contracts in visa and consular business are up for tendering? That’s question number one. Question number two, for our digital business, what kind of margin outlook are we looking at on that front? And lastly, when we are looking at inorganic growth, are we looking at international expansion as well in the digital business in terms of the inorganic opportunity? Or are we looking at domestic fronts? So those are the questions.

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Yes, definitely, Nikhil, thank you for that question. So as I’ve explained before, because of Covid, the tender taken in lot of visa and consular contracts had become — they had given extensive, but now all of these contracts have come up for a renewal, and we have been working on them for the last three, four years. So the opportunity size is quite big, if you talk about only visa and consular services, which is $1.5 billion to $2 billion worth of contracts. But if you add on top of that, even certain new consular services contracts like we won for the Philippine government where we are doing passport renewal for certain — for Philippine government in three countries and planning to expand that.

There are a lot of new government which have never outsourced, so that was never in the horizon. So, even that is some new opportunity that will add also bottom line, top line for us in terms of growth in visa and consular services. If you talk about the margins in our digital business, margins are in line of 12.5% to 13% because this is relatively new business. And we think that the margins will definitely increase going forward because if like in the visa business, if we can increase revenue per application in this business also, that is the main aim for us. So definitely, margins will increase in this line of business. So what’s your third question, Nikhil, you have a third question?

Nikhil Kapur — JM Financial. — Analyst

So the inorganic opportunities are the — that we are looking at for digital businesses, are they domestic or international expansion?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

See, our main aim as a company was always to expand globally. We also started — the visa business with our Portuguese embassy contract in New Delhi, and we started with the Indian Government globally. And eventually, we start looking for foreign governments. So definitely, where you get payment in dollars and euros, which is abroad, we will definitely look at global opportunities. Yes, we are very open to global opportunities where in our terms and conditions, where in upfront payment, there is a negligible investment and there is negative working capital. So if those things are taken care of, then definitely, we look at expanding globally.

Operator

We have the next question from the line of Nitin Padmanabhan from Investec.

Nitin Padmanabhan — Investec — Analyst

Congrats on a strong quarter. So my questions are more related to the kind of opportunities that are out there. If you just throw some color on a few of them. So I think one is the U.K. VI, I think October was supposed to be the time when they sort of announced the final list of bidders. The second was on the U.S. side of things where I think PAE has already sort of tied up, chosen its subcontractor, GDIT, any incremental move there with GDIT? And finally, anything in KSA or any other geography that’s sort of panning out? And finally, these Germany contracts that you have picked up, what are the kind of volumes one should sort of anticipate there for annum? Yes, those are the questions.

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Yes. So Nikhil, thank you for that question. So I think what I can comment on is that all these tenders, we are in different stages of qualification. These are not simple tenders. They take years, you need to get prequalified and then qualified and then there’s a negotiation round. So we are, I would say, in different successive stages. And I would not like to comment on particular opportunities, but none of the results have started to come in yet. As and when they are announced, we’ll definitely be coming out with the news to the market. So that is the opportunity right now. In addition to that, there are lot of German contracts also by different European governments that are expected to come out. So we are preparing for that. In regards to German contract, since it is the first time outsourcing with German embassy in U.S. and Mexico, for Germany and U.S., we are going to open more than 10 offices. And in Mexico, we are going to open two offices for — out of which, we have already opened a couple of offices in which we have started with very limited numbers because embassy wants to first make sure how normal system happens to operations. Everything is airtight and once they get a comfort, then eventually gradually the counts increase. Having said that, the service charges that we have got are very high, more than EUR30, EUR32 in both the geographies and even the charges of value-added services are quite high. So we are expecting good margins from these German contracts. Number, since it is a first-time outsourcing, as and when there is probably a six-month operation, then we can have a better hand on the activation count.

Nitin Padmanabhan — Investec — Analyst

So basically, you should have a better handle on absolute volume from these only later. Fine. Fair enough. One last thing on the visa volumes that we see today. On an absolute basis, excluding China and Russia, what you mean to say is the absolute visa volumes are higher than pre-COVID or the revenues are higher than pre-COVID? How should we think about it?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

See, it’s absolute number definitely cannot be higher because the geographies of Russia and China still have not started. So absolute numbers are definitely what we did in 2019 on a total level is not higher. But if you remove the count from Russia and China and if you do apple-to-apple basis, definitely, count should be in the same ballpark, what we did in pre-COVID level. Definitely, revenue per application is higher than what we did in 2019.

Nitin Padmanabhan — Investec — Analyst

So if I understood it right, the number of applications, excluding China and Russia are higher. And — or is it the revenue per application is actually higher, although the…

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

I would say the revenue per application is definitely higher, application count would be marginally higher because we are — yes, definitely marginally higher.

Operator

We have the next question from the line of Rajiv Venkatesh an investor.

Rajiv Venkatesh — Investor — Analyst

First of all, congrats on a great set of numbers. And second of all, I have to congratulate you for the exchange filings, which have improved. One, we are giving with the detailed investor presentation and other one is a consolidated one. So I think that looks good. In the investor presentation and in your other call, you said that you are merging the BC and the e-Governance services. Are we bringing any new CEO for this particular vertical?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

So Rajiv, this is a new segment that we have worked out for creating our internal focus in these businesses. So at the moment, we have not got any separate CEO for all these businesses. But individually, we have CEOs for these businesses separately. But I think, Rajiv, what we are doing is that individually, Zero Mass already had a CEO and the e-Governance also had a CEO. But going forward, definitely — so –to have a dedicated focus to have competent people, we will have different individual having that business.

Rajiv Venkatesh — Investor — Analyst

And my second question is on the — I think the e-Governance services with the Karnataka government and with the West Bengal government. So one is the Department of Administrative Reforms and the other one is with I think the Revenue and Services. So what type of — like is it similar on the lines with U.P. and the Punjab we did, I think, a few years back, the Punjab one?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

So see, and definitely, the services are quite similar in that in what we are involve, we are doing registration, land registration agreements and certificates. Services are different. In Karnataka, I would say services are quite similar as Punjab wherein this include birth certificate and death certificate. So services are kind of similar to what we are doing in Punjab.

Rajiv Venkatesh — Investor — Analyst

And the margins and the top line will be similar to the Punjab one?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Correct. The top line in all our lines of business in e-Governance is similar.

Rajiv Venkatesh — Investor — Analyst

And do we have any new states in the pipeline for these type of services? I think this quarter we didn’t report any new pipelines for new states.

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

I think there are many states. We are working in different models. But as we took time to even get into these states after Punjab if you see, because we are being very careful. We only — we are looking at different states. We are only looking at states which suit our model, wherein our model, if the state is implementing, then looking at it, and we are looking at two, three states talking to them and looking at this model.

Rajiv Venkatesh — Investor — Analyst

And other question is like with regard to the contracts that are to be renewed. So did we get any renewals from European countries, especially Spain? I think in the last few calls, we were — you were talking about the renewals for Spain, which is coming up this year.

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Right now, all the current contracts are ongoing. And as and when there is any decision on extension or renewal, we’ll definitely announce.

Rajiv Venkatesh — Investor — Analyst

And one more question on the gross margins. We are at 33% gross margins and our EBITDA is also like pre-COVID levels. And in the last quarter, we had a significant — I think the human resource count was added. The margins were a bit affected because of that. Are we optimally utilized on the human resource for this quarter? Or do we see any levers which can play out over a period of time to improve the gross margins and EBITDA margins?

Amit Sudhakar — Chief Financial Officer

So Rajiv, this quarter has been normal, and we have optimized our expenses as for the volume of business which we are doing currently. So once we get any new, say, geography or something, then obviously with the new contract, we may add more people. But the current volumes of this node, we are optimized as far as expense is concerned.

Rajiv Venkatesh — Investor — Analyst

And on the books, we have a sufficient amount of INR500-odd crores. I think with — and considering on the H2 cash flow generation, will that be having around close to INR500-odd crores. So I think this has been a pressing question from a few — a couple of years, in fact, from more than 1.5 years. What is the acquisitions we are in pipeline, considering that we have already completed the Zero Mass one?

Amit Sudhakar — Chief Financial Officer

So if you see the 30th September, we have cash equivalent of around INR385 crores in the balance sheet, which was — as of 31st March, which was about INR410 crores. So we utilized in the six months, about INR130 crores for the acquisition. And a couple of acquisitions are we are working seriously on. And as and when they get crystallized, we will be announcing them. But we are working on those.

Rajiv Venkatesh — Investor — Analyst

These are more on the visa and consular services related acquisitions or on the e-Governance part?

Amit Sudhakar — Chief Financial Officer

Actually, both. We have one or two, which we are working on the e-Governance and on the digital service area, and one or two in the visa side also.

Rajiv Venkatesh — Investor — Analyst

And on the 14, on the UAE, we have provided customized solutions. Is it a new set of solutions, what we are providing or the existing ones? I just wanted to check if that will be coming into the part of the top line.

Amit Sudhakar — Chief Financial Officer

Just one second on it. I don’t understand, what are you — on page number 14? Yes, Rajiv, which slide you’re talking about? Hello?

Operator

We have the next question from the line of Shikha Kapur from Quant Investec

Shikha Kapur — Quant Investec — Analyst

Congratulations, gentlemen, for the great set of numbers. One thing, Mr. Shikhar, you had mentioned a while back that largely growth was on account of revenue per count and less on the volume. Can you quantify that figure, please?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

No. I mean that there is a different year, as I said that pre-COVID levels, we have grown per application count by — from one times to 1.4 times. So we are getting, I would say, 12%, 20% more revenue per application now. There has been — I mean, the growth in application count from the countries that we are currently operating. So there has been a marginal growth of 5% to 10%, but geographies of, as I said, certain geographies still have not opened up. So there is no revenue from those geographies.

Shikha Kapur — Quant Investec — Analyst

So what would be the breakup of that 70% increase in the value terms?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

It is in terms of value-added services.

Shikha Kapur — Quant Investec — Analyst

Secondly, my question is on profitability of ZMPL, I guess, for half year or maybe five, six months, four, five months, it added about INR50 crores to your top line. So what about the profitability? How much is it contributing in terms of profit margin?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

So Shikha, this quarter, we have added a revenue of around INR40.5 crores on the top line and for bottom line is INR5.5 crores, has come from the Zero Mass operation.

Shikha Kapur — Quant Investec — Analyst

Thirdly, you had mentioned about Royal Thai Consulate business. So what is the scope of work for you there? And what’s the size of our business? Is it sizing?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Yes. So Shikha, basically, this is outsourcing of the Thai visas within India. So we won the contract from the Royal Thai embassy in Delhi, Kolkata, Chennai, and Mumbai, because we take out different tenders, we won through all 4, and we also won a contract for the Royal Thai embassy in Kenya. So these are all people who want to go to Thailand and they want to apply for a physical visa. They’re applying through us. So since we have just started, we are getting around 3,000, 4,000 applications per month. So we expect it to further grow as things become normalized, but it is a good profitable contract for us. And in our existing centers, we are accepting applications. So we will not have to set up any new infrastructure for them.

Shikha Kapur — Quant Investec — Analyst

So this is over and above on arrivals in Thailand, and these are the services which should be provided to Indian citizens?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Correct.

Shikha Kapur — Quant Investec — Analyst

And lastly, one more question, in your presentation, it was mentioned about your subsidiary of — subsidiary. In addition to ZMPL, there was some Kenya and Italy also. So I’m assuming these two geographies, you may have some application processing work. So what’s the size of your business over there?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Typically, we are working for the Philippine government currencies. Kenya, we work for three, four governments for Qatar, Spain, I think Thailand, so we are for 3, four governments. So size of the business, I think we need to check what is the revenue size on those countries. But I don’t think it will be very big.

Operator

We have the next question from the line of Aniket Patkar, an investor.

Aniket Patkar — Investor — Analyst

First of all, congratulations on the good set of numbers. So sir, I have a couple of questions. Sir, as far as our BC business is concerned, so are you focusing mainly on the SBI only?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

I think we are not only focusing on SBI, although we are the largest BC of SBI right now on India, but we are working with many other banks like Karur Vysya Bank, with Central Bank of India, Bank of Baroda, so we are — Punjab Nation Bank. So we are working with many other banks, but the biggest bank definitely is SBI. But slowly, we are planning to grow in other banks also.

Aniket Patkar — Investor — Analyst

And sir, what would be our strategy in terms of identifying the governments, those who are not currently outsourcing the visa and the consular services?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Strategy is very simple. First, we see where the counts are fixed. And second, we see where the government is creating a problem in processing applications themselves. So I think that is where how we are focusing.

Aniket Patkar — Investor — Analyst

And sir, as far as our value-added services is concerned, how much is the company on in terms of the revenue and the profit margin?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

So I think on a total level, our profit margin is 15% EBITDA. So I think that includes the total revenue of the company and the profit, right, Amit?

Amit Sudhakar — Chief Financial Officer

Yes, that’s right.

Aniket Patkar — Investor — Analyst

And sir, who will be our main competitors basically? And what are the entry barriers for our business, basically?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

If you see competitors globally, there are different competitors so we have TLScontact and VFS Global, major competitors in this business. And the entry barriers, it is different entry barrier in different contract because of three years to get there as we have explained before. So there are different restricted –. So definitely, — these contracts.

Aniket Patkar — Investor — Analyst

And any capex plan in near future?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

No.

Aniket Patkar — Investor — Analyst

And are we looking for any M&A opportunities in future — and then in which line of business?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Amit?

Amit Sudhakar — Chief Financial Officer

Yes, Aniket, as I said earlier, we are seriously looking at acquisition because we need to grow in, obviously, in the next couple of years. And with the cash and strong balance sheet, we are gear up to look at good opportunities available in India as well as outside India.

Aniket Patkar — Investor — Analyst

Okay. And sir, one last question. What is our top line contribution from the ZMPL?

Amit Sudhakar — Chief Financial Officer

Yes, I just said it’s about — in this quarter, it was INR40 crores.

Operator

We have the next question from the line of Neha Jain, an investor.

Neha Jain — Investor — Analyst

I have a couple of questions. So sir, we see that there’s a bonus share issued during this quarter. And the last one was regarding the March quarter. There’s a very short gap between both the bonus share issued. So could you — actually why the company has decided to do this?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Basically, what has happened is that, as you know, we are directing good amount of cash on the books that we are utilizing for acquisitions and spending on new contract wins, we’ll have to spend the money on in terms of setting up offices. And we are also distributing dividends to our shareholders. So we were discussing ways how we can reward our shareholders. So that was one of the things that came up as well that maybe bonus was a good option. That was the only reason that we have declared the bonus.

Neha Jain — Investor — Analyst

And sir, I think the status on the U.K. visa –?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

This is our — first of all, it’s a first-time contract for us. And we are — as I said, we are in different stages of contract. And as and when the results are now, we’ll definitely be announcing to the market.

Neha Jain — Investor — Analyst

And then, sir, on the ROCE, what are the — for the next couple of years in terms of growth?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

So we are — yes, we are seeing the trend has been up from around 17%. We have now reached around 27% ROCE this quarter, and the intent is to take it further up over the next couple of years. So ideally, if we can see that reach around 30%, that will be our target too.

Neha Jain — Investor — Analyst

Target?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Yes, I couldn’t hear you.

Neha Jain — Investor — Analyst

Is the target?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

So we are working on that. Our target is to reach somewhere around 20%.

Neha Jain — Investor — Analyst

But you don’t have a time frame yet?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

We are working on it. So maybe in the next six months or so over a year, it will take us to reach that.

Neha Jain — Investor — Analyst

And in terms of the value-added service sales of the business, how much is the company able to generate in terms of revenue and profit margin?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

See, we are not calculating them separately. They’re — total revenue of the company. So as you see revenue growing, they are part of the revenue of the company. And in total, we are generating around 15% EBITDA margin. So I think that is where the figure is.

Neha Jain — Investor — Analyst

And sir, for our banking corresponding business, are you only focusing on SBI?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

I just explained that. I think we are working with different banks. We have 5, seven national banks, including Punjab National Bank, Bank of Baroda, Central Bank of India. So we are focusing on different banks.

Neha Jain — Investor — Analyst

Sir, which will be the major contributor from all these different banks?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

SBI — absolutely.

Neha Jain — Investor — Analyst

Sir, is it possible in terms of percentage, how much does SBI contribute?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

As we said, in total, right now, SBI is a major contributor in terms of — business. And the other banks have just started. So we are — from the other banks. So we are getting — the major contributor is SBI.

Operator

We have the next question from the line of Rajiv Venkatesh, an investor.

Rajiv Venkatesh — Investor — Analyst

So I just wanted to check on Slide 14, we are providing the customer solutions. Is it a new set of solutions for the existing one for the UAE?

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

I don’t know which — are you talking about the latest investor presentation?

Neha Jain — Investor — Analyst

Yes, Shikhar, the latest one.

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Okay. But — one second, I will just go through it. 14, Rajiv, I don’t see that we have written anything about UAE. I don’t find — I don’t know what exactly you’re talking. I think it –.

Neha Jain — Investor — Analyst

It is under the digital services.

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Sorry?

Neha Jain — Investor — Analyst

I think it is kind of digital services e-Government services, the global one.

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Okay. I think, Rajiv, it will be better if you can e-mail me in the query because I’m sorry, but I’m not able to understand the exact query.

Operator

As there are no further questions from participants, I would like to hand the floor back to Mr. Shikhar Aggarwal for closing comments. Please go ahead, sir.

Shikhar Aggarwal — Joint MD, BR Head and Executive Director

Thank you, everyone, for your participation in our Q2 FY ’23 earnings call. In case of any further queries, you may please get in touch with us at Adfactors PR or feel free to get in touch with us. We look forward to interacting with you next quarter. Thank you.

Operator

[Operator Closing Remarks]