BLS International Share Price Falls More Than 13% — A Detailed Analysis
The shares of BLS International Ltd. have witnessed a substantial decline in trade, with the stock price plummeting by more than 13% after the company was barred from participating in contracts from the Ministry of External Affairs for a period of two years. This drastic move has left investors reeling, and the stock is currently trading at Rs 293, reaching an intraday low of Rs 276, compared to Friday’s closing price of Rs 337.
Understanding the Reason Behind the Decline
The intense pressure on BLS International comes after the MEA issued an order, debarring the company from participating in future tenders for Indian Missions abroad for a period of two years. This move is a result of allegations, including court cases and complaints received from applicants against the company. However, it’s essential to note that the debarment will not impact existing orders, which will continue as usual until final execution.
According to the company’s exchange filing, the debarment will not significantly impact BLS International’s current financials and ongoing operations. The order will also not have a substantial bearing on the company’s financial outlook. The debarment affects only 12% of the company’s revenue and approximately 8% of the company’s consolidated EBITDA.
Impact on Investors and Market Sentiment
Despite the company’s reassurances, investors have been quick to pull out of BLS International, whose operations with the MEA included outsourced services such as visa application processing, biometrics, and document attestation. The stock is currently trading at a relative strength index of 65, which suggests neutral market sentiment.
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Analyst Ratings and Target Price
According to Bloomberg data, only one analyst covers BLS International in Nuvama, which has a buy rating on the counter with a target price of Rs 665, implying an upside of 125%. This suggests that despite the current decline, there may be potential for growth in the long term.
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Conclusion
In conclusion, the decline in BLS International’s share price is a result of the company’s debarment from contracts by the Ministry of External Affairs. While this may have a short-term impact on the company’s operations, it’s essential for investors to consider the long-term potential and stay informed about the latest developments in the Indian stock market.
