Target: ₹790

CMP: ₹449.40

We recently hosted the management of PDS for an investor roadshow, represented by Pallak Seth (Promoter), Sanjay Jain (Group CEO) and Rahul Ahuja (Group CFO).

The company provided insights on the growth strategy to achieve its 3-3-3 vision ($3 billion GMV over 3 years and delivering a 3 per cent PAT). It plans to achieve this via: maintaining a sustainable growth rate of mid-teens to reach a GMV of $3 billion, translating into a projected top-line of about $2.1 billion; moving from investment stage to extraction stage – past investments in employee costs to translate into lower fixed costs, in turn aiding margins (3 per cent PAT by FY27); and diversify into high-value categories and build new customers across geographies to capitalise on the growth opportunities.

The company’s recent acquisition of 55 per cent stake in Knit Gallery India Pvt Ltd. (KGIPL) for an equity consideration of ₹41 crore at about 6x EV/EBITDA and around 4x P/E is expected to consummate by May’25, helping PDS diversify its sourcing footprint and enhancing company’s manufacturing capabilities in India.

Going forward structural drivers in terms of increased out-sourcing by global retailers, turnaround in manufacturing operations, newer revenue streams - SAAS/Brand management and increasing penetration in US market are likely to act as strong base for top line growth.

Published on March 10, 2025