BLS International Share Price Falls More Than 13% — Here's Why

The shares of BLS International Ltd. has taken a heavy beating in trade on Monday and has seen cuts of more than 13% after the company was barred from contracts from the Ministry of External Affairs for two years.

The stock is currently trading at Rs 293, reaching an intraday low of Rs 276. This compares to Friday's closing price of Rs 337. On a year-to-date basis, BLS International shares have fallen almost 40%.

The intense pressure on BLS International comes after the MEA issued an order, barring the company from participating from future tenders for Indian Missions abroad for a period of two years.

This move stemmed from allegations that include court cases and complaints received from applicants against the company.

The order did, however, mention that the debarment will not impact existing orders, which will continue as usual until final execution.

BLS International, for its part, had mentioned in the exchange filing that the debarment will not impact the company's current financials and ongoing operations. They added that the order will not have any significant bearing on the company's financial outlook either.

The debarment affects only 12% of the company's revenue and only 8% of the company's consolidated EBITDA.

However, that hasn't stopped investors from pulling out of BLS International, whose operations with the MEA included outsourced services such as 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.

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%.