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Stock Report
BLS International Services Limited's short-term rating upgraded to 'CRISIL A2+'
Posted On : 2020-11-05 16:27:34( TIMEZONE : IST )
CRISIL has assigned its 'CRISIL BBB+/Stable' rating to the long term bank facilities of BLS International Services Ltd (BIS; part of the BIS group) and upgraded its short-term rating on the bank facilities to 'CRISIL A2+' from 'CRISIL A2'.
The upgrade in short term rating is driven by gradual improvement in liquidity risk profile and reduced debtors outstanding from the Punjab government. Unencumbered cash balance and debtors from the Punjab government were outstanding at Rs 221 crore and Rs 67.5 crore as on March 31, 2020 compared to Rs 160 crore and Rs 118 crore respectively as on March 31, 2019.
The cash balance is estimated to have improved to Rs 240 crore as on September 30, 2020 out of which management has undertaken that minimum Rs 50 crore of cash will be kept free for meeting any exigencies and the remaining will be used for both organic and inorganic expansion. Any deviation from CRISIL's understanding of management of liquidity profile will be a key rating sensitivity factor.
The rating also factors in the impact on business risk profile arising out of Covid-19 outbreak globally and its impact on the revenue generation from visa and consular services provided by the group. Since visa and consular services business contributed around 85% to total revenue in fiscal 2020, the revenue anticipated for fiscal 2021 would be significantly lower than previous year. CRISIL expects pickup in fiscal 2022 in revenue profile driven by both existing and new business opportunities. However, the risks arising from new business opportunities will remain a key monitorable.
The ratings reflect the BIS group's established market position in the visa outsourcing services sector, strong ties with Indian diplomatic missions, and comfortable financial risk profile. These strengths are partially offset by tender-based business, susceptibility to changes in regulations by the concerned ministries of various countries.
Shares of BLS International Services Ltd was last trading in BSE at Rs.86.8 as compared to the previous close of Rs. 85.9. The total number of shares traded during the day was 3693 in over 148 trades.
The stock hit an intraday high of Rs. 87.4 and intraday low of 83.6. The net turnover during the day was Rs. 317547.
