PDSL - PDS

📊 NSE: PDSL 🏢 Trading 📅 Last Updated: 12/14/2025 10:57

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 21% YoY to INR 12,578 Cr in FY25. In H1 FY26, new verticals grew 46% YoY to INR 468.6 Cr, while existing verticals grew 6% YoY to INR 5,950 Cr.

Geographic Revenue Split

Revenue is sourced globally with key operations in Hong Kong (Foundry), Sri Lanka (Norlanka), Bangladesh (Krayons), Turkey (Spring), India (Knit Gallery), and the UK/Europe (Ted Baker wholesale).

Profitability Margins

Gross margin for FY25 was 20%, down 23 bps YoY due to underperformance in the agency business. Net profit margin stood at 1.9% in FY25 compared to 2.0% in FY24.

EBITDA Margin

EBITDA margin was 3.6% in FY25 (INR 457 Cr), down from 3.8% in FY24. Adjusted for new vertical losses of INR 162 Cr, the core EBITDA margin improved to 5.2% from 4.9%. Q2 FY26 EBITDA margin fell to 2.4%.

Capital Expenditure

Strategic investments include a new UK property and the acquisition of Knit Gallery manufacturing operations in Tirupur. The company raised INR 430 Cr through its first QIP in 2024.

Credit Rating & Borrowing

Debt-to-equity ratio improved to 0.65x in FY25 from 0.76x in FY24. Interest coverage ratio remained stable at 3.13x. Finance costs increased due to higher factoring volumes.

⚙️ Operational Drivers

Raw Materials

Key raw materials include fabrics and trims, which constitute the bulk of the Cost of Goods Sold (COGS) of INR 10,047 Cr (80% of revenue).

Import Sources

Sourcing and manufacturing hubs are located in Sri Lanka, Bangladesh, Turkey, India, and Hong Kong.

Key Suppliers

The company utilizes a pre-approved vendor panel for fabric and trim procurement. PVH (owner of Tommy Hilfiger and Calvin Klein) is a key subsidiary vendor.

Capacity Expansion

Manufacturing capacity expanded in Q1 FY26 with the addition of Knit Gallery operations in Tirupur, India.

Raw Material Costs

COGS rose 21.6% YoY to INR 10,047 Cr in FY25, in line with volume growth. Procurement is managed through a new e-auction platform to drive cost savings.

Manufacturing Efficiency

Norlanka (Sri Lanka) margins improved to 5% from 4.7%; Krayons (Bangladesh) margins rose to 7.2% from 6.6%; Spring (Turkey) margins increased to 4% from 1.3%.

Logistics & Distribution

Higher inventory is maintained for LDP (Landed Duty Paid) and DDP (Delivered Duty Paid) sales in PDS Fashions USA and Krayons until final delivery.

📈 Strategic Growth

Expected Growth Rate

15%

Growth Strategy

Focusing on the value/discount retail sector (Walmart, Target, Ross Stores) which remains robust. Reducing new vertical losses by 25% (INR 40 Cr target) and implementing financial guardrails restricting new investments to 15-20% of PAT.

Products & Services

Apparel sourcing, manufacturing, and wholesale distribution of denim, knitwear, and branded clothing.

Brand Portfolio

Ted Baker (wholesale/agency), Poetic Gem, Simple Approach, Zamira, Norlanka, Krayons, Spring, and Foundry.

New Products/Services

Expansion of the Foundry business in Hong Kong catering to the US market and the Knit Gallery manufacturing platform.

Market Expansion

Aggressive expansion into the US market through the Foundry business and scaling existing accounts like TJ Maxx, Ross Stores, and Target.

Strategic Alliances

Partnerships with Authentic Brands Group (ABG) for Ted Baker and vendor relationships with PVH.

🌍 External Factors

Industry Trends

Consolidation in the US department store sector and the rise of discount/value retailers (Walmart, Costco) are the primary growth drivers.

Competitive Landscape

Competes with global sourcing houses and brand aggregators like ABG in the apparel IP and wholesale space.

Competitive Moat

Moat is built on a global asset-light sourcing platform and multi-country manufacturing footprint, providing agility and cost-competitive procurement.