BLS International Services Limited (NSE:BLS) Q4 FY23 Earnings Concall dated May. 12, 2023.
Corporate Participants:
Shikhar Aggarwal — Joint Managing Director
Amit Sudhakar — Chief Financial Officer
Nikhil Gupta — Managing Director
Unidentified Speaker —
Analysts:
Ravi Naredi — Naredi Investment Private Limited — Analyst
Omkar Kamtekar — Bonanza Portfolio Ltd. — Analyst
Ankita — Shree Capital Services — Analyst
Rahil Shah — Individual Investor — Analyst
Nitin Padmanabhan — Investec India — Analyst
Pramod R — Individual Investor — Analyst
Unidentified Participant — — Analyst
Sumit Chandwani — Arth Equity Advisors LLP — Analyst
Rajiv Venkatesh — Individual Investor — Analyst
Harsh Sharma — Individual Investor — Analyst
John Matthew — Individual Investor — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4 and FY ’23 Earnings Conference Call of BLS International Services Limited.
This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectation of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict.
[Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Shikhar Aggarwal, Joint Managing Director of BLS International Services Limited. Thank you, and over to you, sir.
Shikhar Aggarwal — Joint Managing Director
Good morning, everyone. I welcome you all to our earnings conference call to discuss the business and financial performance for Q4 and FY ’23.
I have on call with me today Mr. Nikhil Gupta, Managing Director; and Mr. Amit Sudhakar; Chief Financial Officer of the company.
Our performance in the fourth quarter has been in line with expectations, continuing the growth trajectory of the previous quarters. Continued recovery in travel and tourism across the globe is boosting volumes and revenues in our visa business, which is growing month-on-month. An early pickup of travel has been boosting visa volumes, as several people are traveling before the onset of summer. With higher volume, we are benefiting from economies of scale, leading to improvement in margins. Moreover, our value-added services are also contributing to our profit margin.
We also increased our stake in Zero Mass Private Limited through a share transfer agreement in March 2023. Post this acquisition, BLS E-Services now holds aggregate of around 91% of the paid-up equity share capital of ZMPL. We have won several new contracts during the period. We have signed an agreement with Polish Embassy in Manila to provide visa outsourcing services. Under this agreement, we will be processing 20,000 applications annually and opening offices in Manila and Cebu. We are thrilled to have signed the contract with the Polish government because it marks the beginning of our relationship with them, and we are optimistic for taking part in their upcoming tenders worldwide.
Moreover, we signed an MoU to accept electronic visa on arrival for seamless travel to Thailand. This significant development would enhance the travel experience for Thai tourists. A projected 75,000 or more applications are anticipated for the forthcoming season, which is likely to drive continuous increase in travel to Thailand. We will start the EVOA’s application from 17 countries worldwide for Thailand. Also, we have signed a contract with the Thai Embassy in South Africa and neighboring countries for visa outsourcing services.
On the digital front, we are able to offer banking correspondent and e-governance services through a common touch point. We are investing in infrastructure and manpower to expand our Digital Services segment. Based on the growth potential, we are looking to restructure the business to make the Digital Service segment a self-funded, growth-oriented and independent business.
To sum up, I would like to say that we are optimistic about both our visa and digital service business and aim to grow both independently.
This is all from my side. I now hand it over to Mr. Amit Sudhakar for updates on financial performance. Thank you.
Amit Sudhakar — Chief Financial Officer
Good afternoon, everyone. I’m pleased to present the financial performance for the fourth quarter ended March 31, 2023.
In Q4 FY ’23, we achieved a revenue of INR449 crores, reflecting an impressive 76% Y-o-Y increase and 2.45% quarter-to-quarter growth. This growth was mainly — primarily driven by the robust recovery of visa volumes, bolstered by the digital service business. We have witnessed a surge in travel with early onset of summer, which boosted our visa business. I’m pleased to inform you that we are currently experiencing positive momentum across all our businesses and hold a strong sense of optimism for sustained growth in the coming quarters.
During the quarter, our EBITDA stood at INR67 crores compared to INR35 crores in the corresponding quarter last year and INR66 crores in Q3 FY ’23. The EBITDA margins for the quarter stood at 14.83%, an increase of 103 basis points compared to corresponding quarter last year. We are able to offset the impact of higher employee costs by implementing cost optimization and managing higher volumes, thereby benefiting the EBITDA margin for the quarter. In Q4 FY ’23, the profit after tax stood at INR77 crores as compared to INR35 crores in previous corresponding quarter and INR46 crores in Q3 FY ’23.
Moving on the financial year ending March 2023, our revenue grew by 78% Y-o-Y to INR1,516 crores. Our EBITDA stood at INR221 crores, growing 107% Y-o-Y, while our EBITDA margin improved by 200 basis points to 14.58%. Our PAT for the period was INR204 crores as compared to INR111 crores in the previous financial year, representing an increase of 84% Y-o-Y.
Lastly, the Board has recommended a dividend of INR0.25 per share on the expanded equity capital for the current year FY ’22-’23, subject to shareholders’ approval.
In conclusion, we are committed to maintaining this positive trajectory and creating a substantial value for our shareholders.
Thank you for your attention and I’m now ready to address any questions you may have.
Questions and Answers:
Operator
Thank you very much, sir. [Operator Instructions] We have the first question from the line of Ravi Naredi from Naredi Investment. Please go ahead.
Ravi Naredi — Naredi Investment Private Limited — Analyst
Thank you very much to give me this opportunity to ask the question. Sir, in March quarter, digital services gave good profit, almost 40%, while visa services 15%. So that trend continue in future too?
Amit Sudhakar — Chief Financial Officer
So, see, one is the growth which you are looking at is mainly on account of the new acquisition we did in digital during the financial year.
Ravi Naredi — Naredi Investment Private Limited — Analyst
Right.
Amit Sudhakar — Chief Financial Officer
So the base was quite small, therefore the percentage-wise it looks much better at the moment. But if you look at overall scenario, it’s — the business of digital has now been from 10% last year, it has now become around 20% of our overall revenue. So that has given increase over the years. But if you look at from a medium-term perspective, we see a growth in both the businesses going forward.
Ravi Naredi — Naredi Investment Private Limited — Analyst
Okay. Secondly, you mentioned MoU with Thailand for 17 countries worldwide. And now you tell again, Thai embassy contract is different of South Africa contract. Why you gave two separate announcements?
Shikhar Aggarwal — Joint Managing Director
Correct. So, hi, this is Shikhar this side. So basically, we have been outsourced the physical visa from the Thai embassy in South Africa and neighboring country. So that is the physical visa that we’ll be processing. People who go to the embassy, they will have to come to us. And then parallelly, we have signed another MoU with Thailand government, wherein we will be processing the electronic visa on arrival, which is a digital for many countries worldwide for people visiting Thailand from different countries.
Ravi Naredi — Naredi Investment Private Limited — Analyst
Right. Right. Yes, sir. Sir, any more acquisition are in pipeline at present? Or how many visa services applications we made usually? And what are success rate in these visa applications, services application? These are my questions.
Shikhar Aggarwal — Joint Managing Director
Yes. So we did around 78 million applications as of 31st March, 2023. And last year, we processed around 16 million applications. There are — if I got your question correctly, there are multiple acquisition opportunities. Nikhil, would you like to put some light on that?
Nikhil Gupta — Managing Director
Yes. Actually, we are continuously looking at acquisition opportunities, and we have created a pipeline of such opportunities. And we are at different stages of discussion. So it’s not possible to give any further information until they are concluded.
Ravi Naredi — Naredi Investment Private Limited — Analyst
Right. Right. And we are just reaching to 1 billion market cap. In advance, I’m wishing you all the best, sir. Thank you very much.
Nikhil Gupta — Managing Director
Thank you. Thank you very much, Ravi.
Operator
Thank you. We have the next question from the line of Omkar Kamtekar from Bonanza Portfolio. Please go ahead.
Omkar Kamtekar — Bonanza Portfolio Ltd. — Analyst
Hello. Thank you for the opportunity. And the first question that I wanted to ask is, sir, are we looking to expand any branch [Speech Overlap]
Operator
Sorry to interrupt. Mr. Kamtekar, there is a lot of background disturbance on your line. So I would request you to go to the quieter place and ask your question, please.
Omkar Kamtekar — Bonanza Portfolio Ltd. — Analyst
Hello. I hope this is better.
Operator
Yes. Please continue.
Omkar Kamtekar — Bonanza Portfolio Ltd. — Analyst
Hello?
Operator
Please continue with your question.
Omkar Kamtekar — Bonanza Portfolio Ltd. — Analyst
Yes. So sorry for the disturbance. So first question is, are we looking to expand any regional offices in India? So we currently have Punjab, Uttar Pradesh, Rajasthan projects ongoing. So are there any plans to expect — expand the regional footprint?
Nikhil Gupta — Managing Director
Yes. I would say that we are constantly looking at opportunities and bidding for projects, which are outside in these four areas. So there is no focus only on some areas in India. As you know, we have a presence in banking across all states in India. So we are present already and we want to expand.
Omkar Kamtekar — Bonanza Portfolio Ltd. — Analyst
Okay. Okay. And just to understand, the acquisitions that are in pipeline, so these are which segment facing? So are they digitally business facing or are they overall visa consular also? Any idea on that?
Shikhar Aggarwal — Joint Managing Director
We are working on the entire pipeline, which includes visas and includes digital services, both.
Omkar Kamtekar — Bonanza Portfolio Ltd. — Analyst
It’s both. So it’s not specifically targeting any segments like digital services or region?
Shikhar Aggarwal — Joint Managing Director
No, wherever there is a good opportunity.
Omkar Kamtekar — Bonanza Portfolio Ltd. — Analyst
Okay. Okay. Okay. Thank you, sir.
Operator
Thank you. The next question is from the line of Ankita from Shree Capital Services. Please go ahead.
Ankita — Shree Capital Services — Analyst
Hello?
Operator
Please proceed.
Ankita — Shree Capital Services — Analyst
Yes. Can you hear me?
Shikhar Aggarwal — Joint Managing Director
Yes.
Ankita — Shree Capital Services — Analyst
Yes. Hi, sir. Good morning, and congrats on a good set of results. So I have a basic question. I just want to understand your business model, in the sense like, let’s say, when you are acquiring a visa processing for a new country, how is this whole process? Because there are many competitors, right? So how is the whole process you’re acquiring the deal? Like, is it through a bidding process? Like, could you please throw some light here?
Shikhar Aggarwal — Joint Managing Director
Yes. So, Ankita, we have — now our company has been there for the last 12 years. So we have been continually bidding for contracts. So I can tell you that this industry is quite segmented with only three players qualified globally for all the tenders. So we’ve been the only Indian company. There is a tender — revenue government tender. If you qualify, you have to bid for it. And the model is that you don’t collect money from the government and you collect upfront money, [Technical Issues] the tendered value that you win at. So that is how the model works and we take care of all our expenses, everything from the revenue that we generate from that service charge plus value-added services.Yes. So, Ankita, we have — now our company has been there for the last 12 years. So we have been continually bidding for contracts. So I can tell you that this industry is quite segmented with only three players qualified globally for all the tenders. So we’ve been the only Indian company. There is a tender — revenue government tender. If you qualify, you have to bid for it. And the model is that you don’t collect money from the government and you collect upfront money, [Technical Issues] the tendered value that you win at. So that is how the model works and we take care of all our expenses, everything from the revenue that we generate from that service charge plus value-added services.
Ankita — Shree Capital Services — Analyst
Okay, sir. Thank you. And my second question is like, are we gaining market share? Because I think our biggest competitors in India, it is VFS. So how are we, like are we ahead? Could you just throw some light on that, too?
Shikhar Aggarwal — Joint Managing Director
So, definitely, every year-on-year, month-on-month, we are increasing our market share. If you see, in the last two years we have won quite a few contracts which Germany, Philippines and different governments. So definitely, our market share is increasing year-on-year.
Ankita — Shree Capital Services — Analyst
Okay, sir. Okay. Thank you so much.
Shikhar Aggarwal — Joint Managing Director
Thank you.
Operator
Thank you. Thank you. [Operator Instructions] We have the next question from the line of Rahil Shah, an Individual Investor. Please go ahead.
Rahil Shah — Individual Investor — Analyst
Hi. Hello. Good morning. Are you able to hear me?
Shikhar Aggarwal — Joint Managing Director
Yes, we can. Go on.
Rahil Shah — Individual Investor — Analyst
Yes, sir. I just want to ask, are you providing any revenue or margin outlook for FY ’24? So how do you feel about the business growing from here? Thank you.
Amit Sudhakar — Chief Financial Officer
Sorry. I couldn’t hear you, Rahil.
Shikhar Aggarwal — Joint Managing Director
Amit, he is asking about revenue and margin outlook. So you go ahead, Amit, on that question.
Amit Sudhakar — Chief Financial Officer
So, see, Rahil, you have seen this year, and if you see the last two years, our growth trajectory has been in the range of 50% to 70% growth, that’s across — based on the COVID situation. But this growth you see getting down stabilized around these levels depending on — as and when we get a new contract it will go to a different level. But the current momentum is steady, and we think this will continue. Margins will obviously improve as the volume will start picking up further. So like Shikhar has talked about earlier that a few geographic areas are still to get opened, like China and other, will — obviously, will improve the revenue, as well as the EBITDA going forward.
Rahil Shah — Individual Investor — Analyst
Okay. Did you say 50% to 70%, that is 5-0%, 7-0% growth you have seen?
Amit Sudhakar — Chief Financial Officer
See, last year, we have done about 70% to 80% growth. Going forward it may taper down to around 20% to 25% of the existing business. But with the opening of new geographies, like China and others, may take it by another 10% to 15% higher. So that is the range which we expect.
Rahil Shah — Individual Investor — Analyst
Okay. No problem. Thank you and all the best.
Operator
Thank you. We have the next question from the line of Nitin Padmanabhan from Investec, sorry. Please go ahead.
Nitin Padmanabhan — Investec India — Analyst
Yes. Hi. Good afternoon, Shikhar, Amit. Thanks for the opportunity. This quarter the revenues were a little tepid relatively. So the China and the Russia side of things were supposed to begin to at least contribute to revenue. Has it not come through this quarter or it’s just a timing difference and is expected to sort of come on a going-forward basis?
Shikhar Aggarwal — Joint Managing Director
Nitin, basically, normally last quarter for us is normally subdued in terms of travel season, but still we did a growth from the quarter three because March, we saw some — early summer actually beginning. From China, we saw only probably 10 — 20%-odd — probably 30%, 35% of pre-COVID numbers coming in from zero. So definitely some numbers have started to come in, but fully China has not opened up. So I think in the coming quarters, we will see more revenue coming in from those geographies.
Nitin Padmanabhan — Investec India — Analyst
So the flow from Moscow for Spain, so that has opened up or that is yet to sort of open?
Shikhar Aggarwal — Joint Managing Director
Sorry, the flow from?
Nitin Padmanabhan — Investec India — Analyst
Moscow for the Spain — Spanish contract.
Shikhar Aggarwal — Joint Managing Director
No, that is still — still — the numbers are still very low because of the different issues that are happening globally. So definitely those numbers are expected to grow.
Nitin Padmanabhan — Investec India — Analyst
Okay. Okay. Any sense by when you think this will open up, or you think it’s still difficult to sort of predict when it actually comes through?
Shikhar Aggarwal — Joint Managing Director
I think it’s a political issue — more of a political issue between Europe and certain geographies. So I think demand is there, but I think as soon as flights — direct flights start from Moscow to different European countries and more travel is allowed, definitely people are willing to travel. So I think we are ready with our capacity as soon as the government starts sending more people or allowing more people. So definitely numbers will increase. But we don’t have any specific timeline, but we expect within a year’s time, definitely, things from Russia to get back to normal and China has already started to become — numbers have started to grow month-on-month.
Nitin Padmanabhan — Investec India — Analyst
Sure. Fair enough. And on the digital services business, I think we added West Bengal during the quarter. [Speech Overlap]
Amit Sudhakar — Chief Financial Officer
See, Karnataka was added during the quarter, and West Bengal, both.
Shikhar Aggarwal — Joint Managing Director
No, West Bengal also was added within the quarter, Amit.
Nitin Padmanabhan — Investec India — Analyst
Right. Right. So when we look at both of them, the 5% sequential growth that we’re seeing, would it mean that the Zero Mass side of the, or the banking correspondent side of the business was relatively flat during the quarter?
Shikhar Aggarwal — Joint Managing Director
Yes. [Technical Issues] Nikhil, can you take this call — question?
Nikhil Gupta — Managing Director
Yes. Sure. This March quarter — the March quarter has been — there is growth, but not the kind of growth that we would have expected. We think that the — this nick — the coming quarter is good looking much better for the banking correspondents.
Nitin Padmanabhan — Investec India — Analyst
Okay. And what’s driving that confidence at this point in time, at least from a business perspective [Speech Overlap]
Nikhil Gupta — Managing Director
Two things have happened. One is that we’ve got more allocation of new areas and new consumer — customer service points. We’ve also got a few more banks, which we are working with, and that will help us to increase the volumes. In addition, we find that the economy also is showing some signs of improvement, where the numbers pick up even in banking side.
Nitin Padmanabhan — Investec India — Analyst
Okay. Sure. Fair enough. And if possible, what was the accretion from West Bengal and Karnataka this quarter, if it’s possible?
Shikhar Aggarwal — Joint Managing Director
Minimal. Amit, very little, right?
Amit Sudhakar — Chief Financial Officer
I don’t have at the moment with me, but I will come back to you with that number.
Nitin Padmanabhan — Investec India — Analyst
Sure. Fair enough. Thank you so much, and all the best.
Operator
Thank you. [Operator Instructions] The next question is from the line of Pramod R, an Individual Investor. Please go ahead.
Pramod R — Individual Investor — Analyst
Hello. Thank you for the opportunity.
Operator
I’m sorry to interrupt, sir. Your volume is too low.
Pramod R — Individual Investor — Analyst
Is it now audible?
Operator
No, sir. Actually, it’s very low. Can you please switch to your handset if you’re using your hands-free?
Pramod R — Individual Investor — Analyst
Is it audible now?
Operator
Yes, sir. Please continue.
Pramod R — Individual Investor — Analyst
Yes. Thank you. Thank you for the opportunity. Shikhar, could you please throw some light on the upcoming tenders, as well as what is the expected CAGR growth for coming quarters? Thank you.
Shikhar Aggarwal — Joint Managing Director
Hi. See, as you know, in the last one, one and a half years, we have won quite a few contracts with the likes of German government, Philippine government, Poland government, Estonia government, so which are — we are in the process of deployment, deployed a few. And now, in the next few quarters, definitely there is an opportunity of more than $1 billion that we’ve talked about and we’re in the process of bidding and under different stages out different tenders. So definitely when those come in, there will be additional growth, as Amit had mentioned in the previous question. But if you talk about from the existing revenue, definitely whatever we have achieved in the last quarters, we expect to maintain that and further, if different geographies, like China, Russia open up, there will be further growth of existing contracts. On top of — if you add the new contracts, exactly we don’t know how much market share we will win, but if we win then there will be a further increase in growth trajectory.
Pramod R — Individual Investor — Analyst
Thank you. All the best.
Shikhar Aggarwal — Joint Managing Director
Thank you.
Operator
Thank you. The next question is from the line of Babudhara [Phonetic] Mayur, an Individual Investor. Please go ahead.
Unidentified Participant — — Analyst
Hello. Am I audible?
Operator
Yes sir, please proceed.
Unidentified Participant — — Analyst
So congratulations to the management on good set of numbers. So, my question was regarding, on earlier con calls we stated that we want to bid for that last mile delivery services in e-commerce businesses. So I want to understand the thinking process behind those businesses. Is it related businesses, isn’t it more crowded space?
Nikhil Gupta — Managing Director
Shikhar, I will answer that?
Shikhar Aggarwal — Joint Managing Director
Yes. Please go ahead, Nikhil.
Nikhil Gupta — Managing Director
Yes. This is a business for — it’s an extension of the banking business that we are doing, and the public sector banks alliance have had floated an inquiry and a tender for bidding for the last mile delivery of cash. We see that as an opportunity and extension of our existing business. And as a result of it we have bid for it. It’s not yet finalized, the contract. We hope it will be get done in this quarter.
Unidentified Participant — — Analyst
Okay. No. So I think I misunderstood that. Is it for last mile delivery for cash, or is it for e-commerce, things like Flipkart and Amazon?
Nikhil Gupta — Managing Director
No, no, this particular tender you’re referring to was for cash.
Unidentified Participant — — Analyst
Okay. And is there any other things like last mile delivery for e-commerce products?
Nikhil Gupta — Managing Director
We are doing some retail work also which includes last mile delivery. We started that about six months ago and that’s still in its nascent stage. But it’s progressing well.
Unidentified Participant — — Analyst
Okay. So how are the margins in those line of businesses? Is it same with our current business line?
Nikhil Gupta — Managing Director
No, in this kind of — you will understand that in trading and e-commerce, the margins are not in the same level. But there is no cash deployment and we still get a reasonable return on this business.
Unidentified Participant — — Analyst
Okay. Okay. Great. And my other question was regarding the increase in depreciation and amortization expenses related to earlier quarter. In quarter three it was around INR3.5 crore and it has jumped to INR8 crores almost. So, are there any policy changes in our depreciation and amortization expense booking?
Amit Sudhakar — Chief Financial Officer
No, there is no change in the depreciation, amortization policy. But what — they were IT investments which we have done, on that depreciation has started now, because the IT software got finalized and it was in operational, we have started doing that. And there was an impairment in one of the assets, which has been — yearly we have to do the exercise of fair value of the assets. In that there was an impairment on one asset, and that was about INR1.2 crores impact which came in the quarter.
Unidentified Participant — — Analyst
Okay. So, going forward, it will be around these numbers only, or it will reduce by the one-time items?
Amit Sudhakar — Chief Financial Officer
This INR1.2 crore will not come again. But the normal — balance will be there as a depreciation.
Unidentified Participant — — Analyst
Okay. Okay. And okay, that’s it from my side. Thank you.
Operator
Thank you. The next question is from the line of Sumit Chandwani from Arth Equity. Please go ahead.
Sumit Chandwani — Arth Equity Advisors LLP — Analyst
Yes. Hi, good morning team. So a couple of questions. One, can you please explain these exceptional items which were there in the last quarter, and expensed and this time it appears to be an income? Both are related to I think these shares that were issued to the promoters in one of the subsidiaries. So can you please explain these accounting entries?
Nikhil Gupta — Managing Director
Yes, let me do that Sumit. Actually what happened was that after due consideration and acting upon the feedback received from various stakeholders, the Board unanimously decided to reduce the amount of sweat equity of BLS E-Services given to the promoters. So based on whatever feedback we got from all of you and other stakeholders, the sweat equity which was earlier allotted to the promoters was reduced substantially after approval of the Board, and that’s what you see in the accounting entry. Thanks.
Sumit Chandwani — Arth Equity Advisors LLP — Analyst
So this is a one-time, so the net effect is a INR2.60 crores for the year.
Nikhil Gupta — Managing Director
Right.
Sumit Chandwani — Arth Equity Advisors LLP — Analyst
And this is it for the — or this will appear every year. What is…
Nikhil Gupta — Managing Director
No, no, no, this is one-time.
Sumit Chandwani — Arth Equity Advisors LLP — Analyst
There is one time. Okay, got it. All right. So second question is on your segmental results. If you go to the segmental results, now the digital services showed a loss of INR16 crores in the last quarter on about INR75 crore turnover and this time it is showing a profit of INR31 crores. Can you please explain the reasons?
Amit Sudhakar — Chief Financial Officer
Sumit, this is because of this sweat equity impact only, because the sweat equity was given in BLS E-Services, which is part of the digital service. So that has impacted the profit in the last year — last quarter actually.
Sumit Chandwani — Arth Equity Advisors LLP — Analyst
Last quarter. Got it.
Amit Sudhakar — Chief Financial Officer
Yes. That’s right. So the impact of that has been there.
Sumit Chandwani — Arth Equity Advisors LLP — Analyst
All right. Okay. All right. Okay. Thank you very much.
Amit Sudhakar — Chief Financial Officer
Thank you.
Operator
Thank you. [Operator Instructions] We have the next question from the line of Rajiv Venkatesh, an Individual Investor. Please go ahead.
Rajiv Venkatesh — Individual Investor — Analyst
Hi, Shikhar. Hi, Nikhil. Is my voice audible?
Nikhil Gupta — Managing Director
Yes, you’re clear. Thanks.
Unidentified Participant — — Analyst
Yes. Hope you guys are doing great. So I have a couple of questions here. One is on the renewal contracts, especially in the European region. We haven’t heard anything from Spain or any other regions on the renewal contracts. Can you throw some light on that?
Shikhar Aggarwal — Joint Managing Director
Yes. So as and when the contracts are renewed and we are legally informed by the government, we will be informing the exchanges and the market.
Rajiv Venkatesh — Individual Investor — Analyst
But it was supposed to come for renewal this year or last year if I’m right.
Shikhar Aggarwal — Joint Managing Director
Correct. Correct. Correct. [Speech Overlap] So still as and when everything is formalized, we will be talking about it.
Rajiv Venkatesh — Individual Investor — Analyst
Okay. And the second question is on the EBITDA margins. We are close to 15% margins this year. So if I look pre-COVID, in 2018, we clocked somewhere close to 20% margins. Is there a possibility to reach 20% margins considering that China and Russia may come online, probably this year or by first quarter of next year? What are your thoughts on this?
Shikhar Aggarwal — Joint Managing Director
Amit, would you like to take that?
Amit Sudhakar — Chief Financial Officer
Yes. So, Rajiv, first that when you’re talking about FY 2018 that was mainly because of the Punjab contract which was an annuity-based contract and we have done a major investment of more than INR125 crores and the impact of that was in the depreciation. So you see the depreciation in that year, was much higher, and the net profit was more important at that time. But as that contract has changed now, ideally, if you look at from ’19 onwards, when the business has been on a different — except without — after the Punjab business. So there we have grown from 13% to now 15% EBITDA margins. And as and when this business further grows and the revenues continue going upside this will go at least by another 100 to 200 basis points, depending how the volumes comes in.
Rajiv Venkatesh — Individual Investor — Analyst
Okay. Understand that. Thanks a lot, Shikhar. Thanks a lot, Nikhil. All the best for the next results. Thank you.
Operator
Thank you. We have the next follow-up question from the line of Ravi Naredi from Naredi Investment. Please go ahead.
Ravi Naredi — Naredi Investment Private Limited — Analyst
Sir, one my relative applied for Spain visa from Delhi, but they are not getting any interview, there is a long queue, while if they apply from Kolkata, they are getting in three days only. So why this rush and why not we arrange smoothly in Delhi? This is my question, sir.
Shikhar Aggarwal — Joint Managing Director
Ravi, thank you for your question. I don’t think we will be able to comment on individual cases. We work under the guidelines of the government.
Ravi Naredi — Naredi Investment Private Limited — Analyst
Yes. I understand, sir.
Shikhar Aggarwal — Joint Managing Director
Yes. Thank you.
Operator
Thank you. The next follow-up question is from the line of Omkar Kamtekar from Bonanza Portfolio. Please go ahead.
Omkar Kamtekar — Bonanza Portfolio Ltd. — Analyst
Sir, thanks for the follow-up question. So in the last two years, we have incurred significant amount of investment in the assets. So we have done good amount of property, plant and equipment intangible investments. So any idea how much more are we looking to spending expanding the infrastructure? Any idea on that?
Shikhar Aggarwal — Joint Managing Director
See, we have done basic infrastructure investment on the assumption of the current volume of business, which we are doing. Any further new contracts which requires any further investment, we are ready to do that. But on a regular basis, which we have been saying every year, we just have our normal operating CapEx of around INR15 crores to INR20 crores. So that remains the normal, but any further contracts or new tenders which we will win, that may require an incremental CapEx, we will look at that.
Omkar Kamtekar — Bonanza Portfolio Ltd. — Analyst
Okay. Thank you very much.
Operator
Thank you. [Operator Instructions] The next question is from the line of Harsh Sharma, an Individual Investor. Please go ahead.
Harsh Sharma — Individual Investor — Analyst
Hello?
Unidentified Speaker —
Yes sir, please proceed.
Harsh Sharma — Individual Investor — Analyst
Yes. Sir, I wanted to ask what is our strategy to identify the governments that are not currently outsourcing visa consular services?
Shikhar Aggarwal — Joint Managing Director
See, our strategy is very simple. We look for the countries where the volume is there and governments are currently facing a problem in processing, and governments — policy changes in the government level, what are they looking at and what is the future growth markets will come from.
Harsh Sharma — Individual Investor — Analyst
Understood that sir. And one more question, sir, like, what are the barriers for new players to enter this industry and win market shares?
Shikhar Aggarwal — Joint Managing Director
Correct. So barriers are too many. There are qualification criteria in which we need to show your experience with different time government, there are SLAs, there’s data protection, different, different barriers are there in terms of your history in the industry and how many governments you’re present — global presence. So that is why only a handful of companies are qualified to bid for these tenders.
Harsh Sharma — Individual Investor — Analyst
And sir, last question, like do we have any CapEx plans?
Shikhar Aggarwal — Joint Managing Director
I think on a normal basis, Amit, every year we have regular CapEx, which is a small amount, but in case there is any big tenders that we win, definitely there will be some CapEx that has to be done in deployment of these offices globally.
Harsh Sharma — Individual Investor — Analyst
And sir, like prior to my previous question, like are there any barriers only for like the digital services business?
Shikhar Aggarwal — Joint Managing Director
No, there are barriers in both these outsourcing business. For the digital service business, Nikhil, would you like to take it?
Nikhil Gupta — Managing Director
Yes. Actually, experience is clearly one of the important barriers, and what you’ve achieved in the past and what your experience is, is critical to getting — winning any new business. Hello?
Harsh Sharma — Individual Investor — Analyst
Yes. Thank you so much, sir.
Operator
Thank you. We have the next question from the line of John Matthew, an Individual Investor. Please go ahead.
John Matthew — Individual Investor — Analyst
Hi. Hope I am audible?
Operator
Yes sir, please proceed.
Shikhar Aggarwal — Joint Managing Director
Yes we can hear.
John Matthew — Individual Investor — Analyst
I believe we might have discussed this, but I’m going to ask anyway because — okay, so going ahead with the question. Are we seeing any specific growth from a particular region when it comes to growth in our visa business?
Shikhar Aggarwal — Joint Managing Director
Yes, definitely, I think the particular reason is that definitely, we’ve had an increase in revenue per application, wherein, in the last couple of years, the consumer demand pattern has changed, people are opting for more value-added services, more at-home services. So that is definitely one of the reasons. We’ve got certain increases in service charges during COVID, and there has been different increase in consumer volume. Last two years, we’ve also won a few contracts that we’ve deployed. So there has been additional revenue and profit generation from those contracts. So those are the couple of reasons on the visa business, why there is an uptick in revenue and profitability.
John Matthew — Individual Investor — Analyst
You having said that, how do you think is this growth rate sustainable?
Shikhar Aggarwal — Joint Managing Director
I think we already discussed about the growth rate that whatever numbers we have achieved, when there is a further opening up of geographies, there can be a further growth from the existing contracts. On top of that, if we win newer contracts, that could be an addition on the existing base that we have achieved. So there will definitely be — we wish to maintain that growth trajectory that we have done in the last few quarters.
John Matthew — Individual Investor — Analyst
Okay. Thank you, sir. Two, three more questions I have. Since China has opened its borders, what kind of revenue in terms of — or in terms of volumes can we expect?
Shikhar Aggarwal — Joint Managing Director
So, see, China has recently opened up their borders, but governments also need to take time to ramp up the capacity and demand starts coming in, in a certain time. So definitely you will see, as the number grows — because from 2019, definitely, we are doing high numbers. So if we achieve those numbers back, we will be doing — overall, of our application volume, around 10% comes from China — 10%, 15%. So if that comes back, definitely there will be an increase in overall percentage for BLS.
John Matthew — Individual Investor — Analyst
Okay. Talking about our cash position, especially since this quarter has been highly cash generative, what is our plan regarding utililization of cash, like how do you plan to use the cash?
Shikhar Aggarwal — Joint Managing Director
So we are looking at inorganic growth opportunities in terms of mergers and acquisitions. And definitely, the contracts that we’re bidding for, there will be a deployment of cash that is necessary in terms of opening of offices globally. And also on top of that, we are rewarding our shareholders with different dividends all the time. So I think this is how we think of utilizing our cash.
John Matthew — Individual Investor — Analyst
Okay. And last question, sir, what is our current working capital cycle?
Amit Sudhakar — Chief Financial Officer
See, ours is a negative working capital cycle, so we don’t need money for the working capital. It depends with new contracts.
John Matthew — Individual Investor — Analyst
Okay. Okay. Thank you for all the insights, sir. It was helpful. I appreciate the very best.
Shikhar Aggarwal — Joint Managing Director
Thank you.
Operator
Thank you. [Operator Instructions] We have the next follow-up question from the line of Babudhara Mayur, an Individual Investor. Please go ahead.
Unidentified Participant — — Analyst
So, actually, I wanted to expand on the previous question regarding profit before tax of digital services. So you alluded that it was due to that subsidiary sweat equity changes, that last quarter it was minus INR16 crores and this time it is INR31 crore. So excluding all business-related — unrelated to business changes, what is the amount that we’ll sustain? Hello?
Shikhar Aggarwal — Joint Managing Director
Amit, will you respond?
Amit Sudhakar — Chief Financial Officer
Yes, I can do that. So see basically [Speech Overlap]
Unidentified Participant — — Analyst
I wanted to ask, what is the sustainable rate.
Amit Sudhakar — Chief Financial Officer
EBITDA margin basis?
Unidentified Participant — — Analyst
EBITDA margin, yes.
Amit Sudhakar — Chief Financial Officer
See, currently we are working on a 12% to 13% EBITDA margin business and we’ll see if this can be sustained up to 14% to 15% once the volumes kind of kick in, in this business.
Unidentified Participant — — Analyst
Okay. And the next question is, we are targeting that unless we win new contracts in visa and consular services, our growth rate will be around 20%, 25%. And similarly, what will be our growth rate in digital services segment going forward?
Amit Sudhakar — Chief Financial Officer
We are targeting growth rates, and since it’s a relatively new business, the growth rates could be even higher than that.
Unidentified Participant — — Analyst
Okay. And actually I wanted to understand a bit regarding the current market size, the global markets size of visa and consular services business in our market share in that as for FY ’23 data.
Shikhar Aggarwal — Joint Managing Director
So as per the visa consular business, I think our market share would be around — it’s very difficult to know the exact numbers, since there is no particular report, but we think our market share would be in the range of 12% to 15%.
Unidentified Participant — — Analyst
And what is the global market size?
Shikhar Aggarwal — Joint Managing Director
I think we would like to probably see these numbers exactly before commenting on that.
Unidentified Participant — — Analyst
Okay. Okay. No problem. Thank you. That’s it from my side.
Operator
Thank you. The next question is from the line of Aniket Wadkar [Phonetic], an Individual Investor. Please go ahead.
Unidentified Participant — — Analyst
Hello. sir. Good afternoon, sir.
Shikhar Aggarwal — Joint Managing Director
Good afternoon.
Unidentified Participant — — Analyst
Yes. Sir, I have a couple of questions. So I just want to know the status of the UK visa business renewal.
Shikhar Aggarwal — Joint Managing Director
I did not understand the question.
Operator
Mr. Redkar, I’m sorry to interrupt. Sir, I would request you to use your handset to ask a question, please, there is a muffled voice which is coming from your line.
Unidentified Participant — — Analyst
Hello?
Operator
Yes sir. Please proceed.
Unidentified Participant — — Analyst
So, I just wanted to know the status of the UK visa business renewals that we have.
Shikhar Aggarwal — Joint Managing Director
We are not currently working, we have bid for the contract and currently there is no result. So as soon as the result is announced, we will definitely be letting the market know.
Unidentified Participant — — Analyst
Okay. Okay. And sir, what is the reason behind this issue of the sweat equity in our subsidiary if BLS E-Services?
Nikhil Gupta — Managing Director
Sorry, I didn’t get the question. What was the question again, sorry?
Unidentified Participant — — Analyst
So what is the reason and rationale behind this issue of sweat equity in our subsidiary called BLS E-Services to the promoter?
Nikhil Gupta — Managing Director
We’ve already explained that, that it was earlier issued and based on the feedback that we received from all the stakeholders, the Board has unanimously decided to reduce the amount substantially. So it’s only INR2.5 crores amount remaining. And the reason why we have done it is because the promoters have brought the business to this stage and they did not get any compensation for it, so we decided to sweat equity which was non-cash.
Unidentified Participant — — Analyst
Okay. Okay. Got it. Thank you, sir. This is from my side. Thank you.
Operator
Thank you. We have the next question from the line of Nihat [Phonetic] Jain, an Individual Investor. Please go ahead. Ladies and gentlemen, as the current participant was on hold and as that was the last question for today, I would now like to hand the conference over to Mr. Shikhar Aggarwal for closing comments. Over to you, sir.
Shikhar Aggarwal — Joint Managing Director
Thank you, everyone. These outstanding financial results serve as a testament to our dedication, resilience, strategic initiatives. We are committed to maintaining this projected positive trajectory and creating sustained value for our shareholders. Thank you all for your attention and I am now ready — and thank you for participating in this call.
Operator
[Operator Closing Remarks]