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00:00 [MUSIC PLAYING]
00:03 Hello, and welcome.
00:11 You're tuned into NDTV Profit.
00:12 I'm Harsh Saita, and this is a Small Ad, Mid Cap show.
00:15 We have with us the chairman of BLS e-Services, Mr. Shikhar
00:19 Agarwal, who's also the joint managing director at BLS
00:22 International, to talk to us about their numbers for Q4,
00:26 as well as what expectations we can bring in for FY25.
00:29 Welcome to NDTV Profit, sir.
00:31 Morning.
00:32 Morning.
00:32 Nice to be here.
00:33 Hi.
00:34 So talk us through, especially-- let
00:36 me start off with e-Services, because the more recently
00:39 listed one.
00:41 Talk us through the numbers there.
00:43 Set us the context, because we've
00:45 seen margins go above the 20% mark.
00:48 Whether that's sustainable?
00:49 Whether that's realistic going forward?
00:52 See, the margins on a consolidated level
00:55 of BLS International as a group has
00:57 grown up for the 20% level.
01:00 If you see the revenues that we've done in BLS International,
01:02 it's $1,676 crores, and a bit off in $45 crores,
01:06 which is a growth of 56% compared to last year.
01:10 And the margins have grown up for the 20%.
01:12 So definitely, I think the margins are sustainable.
01:15 In fact, I feel that margins that you achieved,
01:17 we will not only sustain, we will outpass and outgrow them.
01:21 And results will start flowing from the first quarter itself.
01:23 There are a couple of reasons for that.
01:25 So globally, we have taken, again,
01:28 our global contracts from Spain.
01:30 We have a lot of new contracts from Italy, Poland,
01:32 Czech Republic, Portugal.
01:35 We've also done some realignment,
01:37 where we have taken over some countries
01:38 where we were operating with some FMC partners.
01:41 So definitely, we've added seven new countries this year,
01:44 where we have taken over FMC partners.
01:46 So profits have increased from those countries.
01:49 So that is the reason that margins have increased.
01:52 Talking about BLS e-Services, where
01:54 we have done a revenue of 309 crore, which
01:57 is a growth of 25%, and a EBITDA of 50 crores,
02:00 which is a growth of 37%.
02:02 The margins are lower than BLS International.
02:05 We are doing margins of 16% at EBITDA level,
02:08 which I feel have increased compared to last year.
02:12 And going forward, it will increase further.
02:15 OK, so let me first talk of BLS International.
02:18 Let's try and cover that base first.
02:21 Trying to understand where revenue trajectory will go,
02:24 because you're expected to see around 9%
02:27 odd in terms of global growth on e-Visa services and the like.
02:34 What's your growth likely to be at, especially for next year,
02:38 given that this year you've done just about a double digit?
02:45 I think this year, if you see at EBITDA level,
02:47 we have grown 56% compared to last year.
02:50 So our profit has grown to 345 crores.
02:54 We did 200 odd crores last year, and before that,
02:57 we had 300 crores.
02:58 So we grew from 100 to 200, and now we've
03:00 grown to 345 at EBITDA level.
03:03 And definitely, whatever we have achieved,
03:05 our first aim is to grow it at a sustainable manner.
03:09 So this is the new base of the company.
03:11 Whatever we have achieved, we first want to maintain that.
03:14 You can see last year was monumental for us.
03:17 We won a lot of new contracts.
03:20 We acquired a company also, IDATA.
03:23 Revenue and profitability will start coming in from that also.
03:26 Formalities are pending.
03:28 Countries of Russia and China, which
03:30 were pre-COVID the biggest volume generator for us,
03:33 China, I would say, has opened 78%.
03:35 Russia is still at 20%.
03:37 So as volumes grow from those regions,
03:39 definitely there will be a further increase
03:41 in revenue and profitability.
03:42 Our revenue mix has changed.
03:44 We have got an increase in service charge and value
03:46 added services.
03:47 Customers are asking for more different kind of services,
03:50 like mobile, biometric, et cetera.
03:52 So definitely, going forward also,
03:55 we see not only the EBITDA margins increasing,
03:57 which have already been up for the 20%,
03:59 we see further growth coming in from this quarter itself,
04:04 compared to last year.
04:05 So there will be further growth in EBITDA margins
04:07 of the company.
04:08 There will be growth in revenue and profitability also.
04:10 The new contracts that we have won, we have deployed.
04:13 Revenue is starting to come in.
04:14 Some contracts results have to come this year.
04:17 So as and when those come, there will be further increase.
04:20 The company that we acquired, IDATA,
04:22 there will be an increase in that.
04:23 So definitely, we see good growth coming in this year
04:26 itself also.
04:27 No, no, I take your point entirely, Mr. Agarwal.
04:29 So clearly, EBITDA has been the focus.
04:33 And you've spoken very clearly of the levers
04:35 which you're leveraging on to make sure
04:38 that EBITDA margin continues to remain 20% plus sustainably.
04:43 You've spoken of that.
04:45 I'm purely talking about it from a revenue standpoint.
04:48 From a revenue standpoint, what should the growth
04:51 clip be like going forward?
04:52 As you do more value-add services,
04:54 I fully understand that.
04:56 But what should the growth clip be like?
04:57 What should one expect BLS International to do?
05:02 So definitely, in our organic business,
05:05 what we are currently doing, we expect 20% upwards of--
05:09 more than 20% growth coming in.
05:11 We did 67% of growth compared to last year.
05:14 So definitely, I would say that we will do upwards of 20%.
05:17 That is a minimum benchmark that we set.
05:19 On top of that, if we add more new contracts
05:22 that we're going to win, the inorganic acquisitions that
05:25 are about to be completed of IDATA and e-services also,
05:28 we are planning some other acquisitions.
05:30 That is-- we can come back to that later.
05:32 So definitely, we see good growth coming in.
05:34 And I also see increase in new geographies.
05:38 We've added two new countries.
05:40 We've started operations in Colombia and Peru
05:42 also for the Spanish government.
05:44 So I see growth coming in from all these aspects this year.
05:48 OK, I get your point.
05:49 And a lot of this growth and a lot of the geographic expansion
05:54 will all be funded from in-house internal accruals.
05:59 See, right now, we have 1100 odd crores of cash--
06:02 Yes.
06:02 --including our IPO money.
06:03 And that money will be utilized for acquisition
06:06 that we will now--
06:07 we have to utilize that money.
06:08 Right now, all the growth that we are planning to use--
06:12 open new offices across the world,
06:13 getting into new contracts--
06:15 I think we have sufficient funds.
06:17 And we are a negative working capital company.
06:19 We have generated around 355 crores of cash this year.
06:21 So I don't think we need cash as of now.
06:23 But if there is any other acquisition opportunity,
06:27 there might need certain debt.
06:29 We have been a debt-free company since incorporation.
06:32 So we might take on debt.
06:33 We are not averse to that.
06:35 OK, I take your point.
06:36 And with this large kind of cash balance--
06:39 I don't recall seeing such a large cash
06:42 balance in your books ever.
06:44 So I'm guessing it's at an all-time high--
06:45 1,100 crore plus.
06:47 What do you intend to deploy it on?
06:51 I mean, I understand you're looking at acquisitions.
06:53 How large is the acquisition pool that you're looking for?
06:56 And what will you do with the balance funds?
07:00 See, we have more than 1100 crores of cash on the books.
07:02 That includes 300 crores of cash from BSE services.
07:06 That will be utilized in different aspects
07:08 that we have mentioned in the IPO-- that is acquisitions
07:11 and technology transformation, opening of BLS stores,
07:14 et cetera.
07:15 That takes care of that 300 crores.
07:17 The rest of the money that is there,
07:18 450 to 500 crores, upwards of that,
07:21 we need an iData acquisition.
07:22 The rest money that will be left will
07:24 be used in deploying for our CapEx investment,
07:28 opening of new offices across the world, refurbishments,
07:31 et cetera.
07:32 Technology investment.
07:33 So definitely, and we also announced dividend.
07:36 So this year, I think we've done the highest ever dividend
07:38 of 41, 42 odd crores.
07:41 100% dividend we have paid on the face value of the shares.
07:44 So definitely, we are utilizing cash
07:46 for the benefit of the shareholders.
07:48 OK.
07:48 And just with regard to--
07:50 I'll switch focus to BLS e-services.
07:53 Talk us through the exceptional items in this quarter's numbers.
07:59 You mean BLS e-services?
08:00 Yes, e-services.
08:01 Yes, please.
08:02 OK, I need to exactly check that,
08:04 which exceptional items you're talking about.
08:07 OK.
08:08 Yeah, let me get that.
08:09 Because your profitability was impacted
08:12 due to exceptional items, or am I mistaken?
08:15 No, I think there has been definitely
08:17 an increase in profitability because there
08:18 was an increase in interest income in BLS e-services.
08:22 But as a whole, if you see our revenue from operations
08:25 has also grown in BLS e-services.
08:28 Our revenue from VC business, our network
08:31 has grown now, and we have more than 100--
08:33 1 lakh touchpoints across India.
08:35 So revenue and profitability from VC business
08:37 has grown, from e-governance has grown.
08:40 So definitely, there was an increase
08:41 in revenue and profitability.
08:42 But definitely, there was also some other income
08:45 that got added on because of the interest income.
08:48 Sure, OK.
08:49 And with regard to facilitation now,
08:51 you've signed agreements with HDFC, Kotak, and Karur Vaishya.
08:56 What does this do to revenue going forward?
08:59 How quickly are you going to start working with them?
09:03 And when will revenue start accruing to you by?
09:06 See, HDFC, for example, you've already
09:08 done 500 crores of loan dispersals
09:11 that we got facilitated last month itself.
09:13 And we just started that.
09:14 So obviously, we get a small percentage
09:16 of commission on that.
09:17 But going forward, that is just one new initiative
09:19 that we took this year.
09:20 So on an annual basis, definitely, there
09:22 will be a huge revenue upside from that.
09:24 We recently signed an agreement with Axis Bank and BLS e-services.
09:28 So I think that this year will be phenomenal in terms
09:31 of growth of BLS e-services.
09:34 Our network has expanded.
09:35 We are at 100,000 touchpoints.
09:37 We have 1,000 BLS stores.
09:39 So definitely, business from BC services, the existing services
09:43 is increasing.
09:44 Bank is adding more services.
09:46 We are going to lead generation for loans.
09:49 So I see a good increase in revenue
09:51 coming from BLS e-services.
09:52 On top of that, the acquisition, the due diligence
09:55 that we are doing for acquisitions,
09:56 I think as and when that is closed,
09:59 there will be a further increase in revenue and profitability.
10:02 Sure, yes.
10:02 I take your point.
10:04 So 30% on top line, is that what one can reasonably
10:07 expect BLS e-services to do?
10:10 I think more than projections, I would talk about the past.
10:12 We have done 20% growth on revenue, 27% growth on EBITDA.
10:17 Definitely, our objective is to see
10:19 the trajectory of the companies, both the companies.
10:21 We have been achieving good growth, 25%, 30%,
10:24 more than that, 60% growth.
10:26 So definitely, I wouldn't want to put any number.
10:28 But yeah, I think from our plans,
10:32 we will do good increase in revenue and profitability
10:34 in BLS e-services.
10:35 Could be more than that as well.
10:37 OK, I take your point.
10:38 And what I meant to ask you in my first question
10:42 was the 20% margin which you've clocked in Q4 for BLS
10:46 e-services, is that a sustainable number going
10:49 forward?
10:49 So you expect that 20% kind of margin trajectory
10:53 for FY25 full year and across quarters?
10:57 So first of all, the margin that we have, 20%
11:00 that we have clocked is on a consolidated level,
11:03 including BLS international and BLS e-services.
11:05 And BLS international margin is a little higher at 22%.
11:08 And in e-services, we have done a margin of, I think,
11:12 15% or 16%.
11:14 So I think the margin that you achieved in both the companies
11:16 are sustainable.
11:17 Even in e-services, 16% of margin that you achieved
11:20 is sustainable.
11:21 And going forward, margins will definitely
11:23 increase in both the companies.
11:26 Understood.
11:27 And with regard to profitability,
11:30 therefore, your margin of 16% plus in BLS e-services
11:35 largely is that steady state.
11:38 And therefore, your profitability
11:39 should be largely governed by your top line growth
11:42 as well as a wee bit of margin expansion?
11:45 No, I think profitability for us in both the companies
11:49 is actually linked to both more growth in margin and top line.
11:52 So I expect margins to grow.
11:54 If you see our margin on consolidated level last year
11:57 was 16%.
11:58 This year, we have grown, I think, 5% to 6%
12:02 on the overall level.
12:03 So definitely, there has been a huge increase in profitability
12:06 because of that.
12:07 So going forward, I expect both the revenue margins
12:10 to increase, leading to a double growth in profitability.
12:13 Sure.
12:13 You've also spoken about technological upgradation
12:17 with regard to your BLS stores.
12:20 How quickly is that expected to happen?
12:22 And what's the kind of capex which you're putting up?
12:25 And how quickly are you deploying that?
12:28 Out of the IPO money, we had earmarked a certain amount
12:31 of capex for the technology investment in BLS e-services.
12:34 I need to check the exact numbers.
12:36 But we've already started our plans.
12:38 We've started shortlisting of vendors.
12:40 We've started identifying which exact areas
12:42 we need to deploy our money.
12:43 So I think within this year, our expectation
12:46 is that we want to deploy the money.
12:49 OK, I take your point.
12:51 Very interesting here.
12:53 Thank you so much for all of that perspective, Mr. Agarwal.
12:56 It's a pleasure speaking with you.
12:59 Thank you so much.
13:00 Welcome.
13:01 This is Earnings Edge on NDTV Profit.
13:03 We are tracking earnings from Patanjali Foods.
13:07 For the Quatergon band, what we can expect going forward,
13:10 we had a conversation with Mr. Sanjeev Asthana,
13:12 the CEO of Patanjali Foods.
13:15 Mr. Asthana, good morning.
13:16 Thank you so much for joining in.
13:18 Let me start by asking you about what
13:20 your assessment of the quarter has been
13:22 and what you make of it.
13:26 So the quarter was positive in general.
13:28 So we had a continued sort of positive news
13:31 on the edible oil front, which is
13:33 a large part of our portfolio, that we sort of started
13:37 showing a positive return.
13:40 Our foods portfolio has continued to grow.
13:43 We had some sort of welcome initiative,
13:46 which is on the cards now, which we are evaluating an offer
13:50 to acquire Patanjali Ayurvedic non-food business with some
13:54 of the most marquee brands in it.
13:56 So in general, a lot of action, positive sort of news
14:00 on most business fronts.
14:02 And I think some of the challenging environment
14:04 that we faced in the previous quarters,
14:06 especially on the edible oil side, seems to be behind us.
14:10 And we are looking at positive times ahead.
14:13 And hopefully, I think the momentum will continue.
14:17 Right.
14:18 Mr. Rastana, going forward, can you
14:20 give us an idea about the kind of growth
14:23 that we can expect in FY25?
14:26 What are the factors that could perhaps influence growth
14:29 going in?
14:30 We're talking to a lot of players in the industry,
14:32 and they are suggesting that there are certain green shoots
14:35 which are now visible when it comes
14:36 to the rural segment, which was, in fact, on a back foot.
14:40 But what is your reading in this matter?
14:45 So two parts, I think, that are defining this.
14:48 So I would agree with the assessment
14:50 that we're seeing the green shoots of growth
14:53 in the rural demand.
14:54 I think certainly from last quarter,
14:56 that is quite visible that the growth momentum is picking up
14:59 at the back of the positive sort of prices on the commodity
15:05 front, but the good agriculture growth,
15:08 the rural credit, et cetera.
15:09 So that's had a positive sort of impact on the overall demand.
15:14 On the side of the overall economy,
15:15 I believe that with a lot of cash infusion,
15:19 the overall growth the economy is achieving.
15:22 So on the FMCG business, as well as in the commodity side
15:25 and the overall business environment,
15:27 I would be positively inclined that we'll
15:31 see a good uptake in the growth on the demand side.
15:35 It should have a profitable sort of opportunity
15:38 for the company, because the commodity prices continue
15:42 to be benign.
15:43 And overall, my expectation is that the corporate sector
15:47 overall, especially in the food and FMCG segment,
15:50 we should have a good growth momentum going forward.
15:54 So we do see substantial volatility when
15:57 it comes to food oil pricing.
15:59 At the moment, what is your assessment
16:01 of the pricing environment?
16:03 And how do you think that could develop based on the demand
16:06 supply situation that you are expecting going forward?
16:10 So that was a challenge.
16:11 I think five quarters in sequence
16:13 were a big challenge from the second quarter of last year
16:15 to second quarter of this year.
16:18 Post that, we've seen a stable sort of price environment.
16:21 The supply demand seems to be reflecting a more sort
16:26 of stable price regime.
16:28 Though, of course, one cannot guarantee on the commodity side,
16:31 because there's so much of international price volatility
16:34 in the marketplace.
16:35 But I would imagine that the edible oil sector overall,
16:38 I think we have turned the corner in one sense
16:40 of the extreme volatility and the challenges
16:43 that it faced for established players who
16:46 are operating from a long side position only,
16:48 where we have to buy much ahead of the time
16:50 when the demand market will go and sell.
16:53 But broadly, I think it should be a much more stable
16:56 environment that we are going to face on the edible oil side.
16:59 And I think on the rest of the commodities like sugar,
17:01 and wheat flour, and rice, et cetera,
17:03 I think we should see a fairly stable sort of price
17:06 evolving in the year ahead.
17:09 So net-net, the impact that it typically
17:11 has on the FMCG companies, I think,
17:13 should be positive towards the profitability,
17:17 as well as in terms of the revenue growth overall.
17:20 Considering that the economy is growing
17:22 and the demand is sort of picking momentum,
17:24 I think overall it should be good for the food
17:26 and FMCG segment overall.
17:28 So just one, your understanding on the progress
17:31 on oil palm plantations, what's the update here?
17:35 What can we offer and what can we
17:37 expect going into the next few quarters?
17:40 So very positive.
17:41 I think the effort which has gone in the last two years
17:43 in terms of bringing in the sprouts
17:46 and putting in the nurseries.
17:48 So as a quick update, we have bought more than 40 nurseries
17:51 which are operational.
17:53 We have more than 75,000 hectares of plantation
17:56 which are there.
17:57 The good feature of that is that the younger plants, which
18:00 is zero to three years, are almost one third of what
18:04 we have planted, which augurs very well for us
18:06 in the coming years, because they
18:08 are the ones when they start fruiting,
18:09 we'll start getting the oil recovery.
18:11 So overall, very positive.
18:13 Next year, our target is that anywhere between 40,000
18:16 to 50,000 hectares we should plant.
18:18 So I'm hoping to give you good news that by end of next year,
18:21 we should be closer to anywhere between 1.2 to 1.25 lakh
18:26 hectares which have been planted.
18:28 And all larger part of that will be towards the younger trees,
18:31 which means that we'll have an upside when they start fruiting
18:35 and giving us oil.
18:38 The margins will be very positive once we start--
18:41 so these trees start to mature.
18:44 All right.
18:45 So we leave it at that.
18:46 Thank you so much for joining us and talking to us
18:48 here on NDTV Profit.
18:51 Thank you.
18:54 There you have it.
18:55 Well, that's the management of Patanjali Foods
18:58 telling us about all that we can expect as we move
19:00 into the next financial year.
19:02 But we are out of time on this edition
19:05 of the Small and Mid-Cap Show.
19:07 Lots more lined up on the other side.
19:08 You're watching NDTV Profit.
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