pds multinational fashions

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KEY DATA

Rating Not rated Sector relative NA Price (INR) 1,339 12 month price target (INR) NA Market cap (INR bn/USD bn) 34.9/0.4 Free float/Foreign ownership (%) 33.4/3.7

What’s Changed

Target Price ⚊

Rating/Risk Rating ⚊

INVESTMENT METRICS

The next wave of outsourcing?

Our interactions with global retailers during our Feet on Street exercise recently suggest a new wave of outsourcing in the making in the global procurement space—an end-to-end compliant solution from designing to managing supply chain and final delivery. And our hunt for such a play took us to PDS Multinational Fashions (PDS), an asset-light and design-led platform that runs ESG-compliant supply chains

for leading global fashion brands and retailers.

Other than the sourcing vertical (RoCE 60%), PDS has a manufacturing vertical (~40% capital employed) aiming for a toehold in the US. Though loss making, this vertical is on the cusp of a turnaround. Net debt to EBITDA is down to 0.3x from 3.8x in FY17.

FINANCIALS (INR mn)

PRICE PERFORMANCE

The next wave of outsourcing? Asset-light and compliant solution

During our Feet on Street exercise with global technologists to gauge demand for IT

services, we discovered a new trend in the global outsourcing market. Our

interactions with global retailers unravel noticeable demand for outsourcing of

procurement services by large retailers and fashion brands. Global brands want to

focus their energies on core operations, defend their market share loss to online

players, and find a reliable solution to fill gaps in\/ the wake of the pandemic-led

disruption in the vendor space (bankruptcies) across the globe. Moreover, the

pandemic has led to a decadal shift (refer to Exhibit 3) from offline to online, thereby

enabling global brands to reach every corner of the world through digital stores.

Early mover riding potential wave; manufacturing turnaround ahead

PDS sets up exclusive teams to serve customers – key global brands/retailers – to

understand their sourcing requirements. Through its asset-light and platform-

based network, the company sources fashion-related products through partners,

and manages the entire supply chain within an optimal lead time. It also provides

market know-how and in-house design-led capabilities (150+ designers). PDS has

put special focus on sustainable practices across functions via its 40-member team.

Explore:

Outlook: Asset-light, compliant business model; not rated

PDS has seen stable growth in revenues (8% CAGR over FY17-21) despite the impact

of covid last year. Sourcing business, its key segment, clocks an RoCE of 60% owing

to asset-light operations. While ~40% of the current capital employed is invested in

the manufacturing business, which is still to break even, a turnaround thereof will

drive further improvement in overall company RoCE (currently 16%).

PDS has used the improvement in performance to cut its leverage, bringing net debt

to EBITDA to 0.3x (from 3.8x in FY17). Management is now targeting to take revenues

from USD1bn at present to USD2bn over the next three years with a ~200bp margin

expansion. The stock (not rated) is trading at 41x FY21 PE/ 15x FY21 EV/EBITDA. Its

five year trading average has been 27x LTM PE.

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Oct-20 Jan-21 Apr-21 Jul-21 Oct-21

PDS IN Sensex

India Equity Research Miscellaneous October 19, 2021

PDS MULTINATIONAL FASHIONS VISIT NOTE

Corporate access

Financial model Podcast

Video

Sandip Agarwal Nihal Mahesh Jham +91 (22) 6623 3474 +91 (22) 6623 3352 [email protected] [email protected]

Year to M arch F Y18A F Y19A F Y20A F Y21A

Revenue 49,239 64,859 66,480 62,129

EBITDA 378 1,116 1,860 2,299

Adjusted profit -78 438 596 843

Diluted EPS (INR) -3.0 16.8 22.9 32.4

EPS growth (%) NM NM 35.9 41.5

RoAE (%) 3.6 13.2 17.0 22.4

P/E (x) NM 79.6 58.6 41.4

EV/EBITDA (x) 98.4 33.5 19.6 14.8

https://www.edelweissresearch.com/Research/Company?Id=4542

https://www.edelweissresearch.com/Podcasts

https://www.edelweissresearch.com/CorporateAccess

https://www.edelweissresearch.com/Videos

PDS

Edelweiss Securities Limited

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Financial Statements

Year to March FY18A FY19A FY20A FY21A

Total operating income 49,239 64,859 66,480 62,129

Gross profit 6,746 9,476 10,987 10,276

Employee costs 3,064 3,794 4,360 4,143

Other expenses 3,304 4,566 4,768 3,834

EBITDA 378 1,116 1,860 2,299

Depreciation 164 263 522 677

Less: Interest expense 217 323 493 257

Add: Other income 244 161 265 374

Profit before tax 240 691 1,110 1,739

Add: Share of associates -13 -1 -69 -39

Less: Excp.item 0 0 136 0

Prov for tax 32 1 95 215

Reported profit 195 689 811 1,484

Less: Minority Interest 274 250 351 641

Profit Attributable to owners -78 438 460 843

Add: Excp.item (net) 0 0 136 0

Adjusted profit -78 438 596 843

Diluted shares o/s 26 26 26 26

Adjusted diluted EPS -3.0 16.8 22.9 32

DPS (INR)* 0.0 0.0 0.0 0.0

Tax rate (%) 13.2 0.2 8.5 12.4

*Dividend of INR15.8/share proposed in FY21


Gross margin (%) 14 15 17 17

Employee exp (%) 6 6 7 7

Other exp (%) 7 7 7 6

EBITDA margin (%) 1 2 3 4

Net profit margin (%) 0 1 1 2

Revenue growth (% YoY) 7 32 3 -7

EBITDA growth (% YoY) -31 195 67 24

Adj. profit growth (%) NM NM 36 41


Diluted P/E (x) NM 80 59 41

Price/BV (x) 6 7 6 5

EV/EBITDA (x) 98 34 20 15

Dividend yield (%) 0 0 0 0

Income Statement (INR mn)

Important Ratios (%)

Valuation Metrics


Share capital 260 260 260 260

Reserves 4,386 4,422 5,326 6,208

Shareholders funds 4,646 4,682 5,587 6,469

Minority interest 792 309 525 687

Borrowings 5,521 7,001 7,472 4,866

Trade payables 4,797 7,476 7,289 8,924

Other liabs & prov 840 2,235 2,566 2,427

Total liabilities 16,598 21,703 23,438 23,373

Net block 2,258 2,976 4,218 4,091

Intangible assets 475 569 574 547

Capital WIP 304 145 206 47

Total fixed assets 3,037 3,689 4,998 4,685

Non current inv 733 621 653 968

Cash/cash equivalent 2,504 3,876 5,261 4,879

Sundry debtors 7,826 10,287 8,324 9,098

Loans & advances 70 77 644 602

Other assets 2,428 3,153 3,558 3,140

Total assets 16,598 21,703 23,438 23,373


Reported profit -78 438 460 843

Add: Depreciation 164 263 522 677

Interest (net of tax) 146 217 330 172

Others 191 2,226 2,308 3,296

Less: Changes in WC -160 1,013 812 1,195

Operating cash flow 583 2,131 2,808 3,793

Less: Capex 868 1,365 557 265

Free cash flow -285 766 2,250 3,528


RoE (%) 3.6 13.2 17.0 22.4

RoCE (%) 4.4 8.8 12.5 15.6

Inventory days 4 7 10 13

Receivable days 56 51 51 51

Payable days 37 40 49 57

Cash conversion cycle 24 17 13 7

Gross debt/equity (x) 1.0 1.4 1.2 0.7

Net debt/equity (x) 0.6 0.6 0.4 -0.0

Interest coverage (x) 1.0 2.6 2.7 6.3


EPS growth (%) NM NM 35.9 41.5

RoE (%) 3.6 13.2 17.0 22.4

EBITDA growth (%) NM 195 67 24

Payout ratio (%) - - - -

Key Ratios

Valuation Drivers

Balance Sheet (INR mn)

Free Cash Flow (INR mn)


PDS

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Potential next big wave of outsourcing

Our more than two decades of tech sector coverage reminds us of the era when

IT outsourcing began. We recall that the US financial industry became a quasi-

tech industry due to a substantial jump in transactions, leading to a notable

jump in penetration of technology to improve efficiency and more so to manage

significant volumes of transactions.

Post-covid-19, we spot a similar situation in the procurement space of large

retailers and fashion brands. We believe the aforementioned trend has become

stronger and stronger as the intermediary, similar to tech outsourcers, has in-

house design capabilities, a compliance team and a strong system to monitor

both the seller and buyer, including inventories and working capital.

Our discovery of above trend led us PDS, one of the key intermediaries in the

space in India. We interacted multiple times with PDS top management (Mr.

Pallak Seth and Mr. Sanjay Jain) over the last few weeks. Our initial observation

on this is in the right direction and that a big outsourcing wave is emerging in

the procurement business.

We recall that the US financial industry became a quasi-tech industry due to a

substantial jump in transactions leading to a notable jump in penetration of

technology to improve efficiency—and more so to manage significant volumes of

transactions.

In pursuit to become tech savvy and move operations to technology, large part of

the US financial industry got engrossed in building technology ecosystem ( leaving

behind their core i.e. financial business) and were managing internal technology

departments, recruiting , training, etc. thereby burning not only lot of financial

resources but also dedicating substantial management bandwidth in non-core

operations.

Sooner rather than later the US financial sector realised the trouble they were

getting into. And then they started outsourcing technology functions to external

vendors and consultants and that in turn gave birth to outsourcing for Indian tech

vendors.

Post-covid-19, we are experiencing a similar situation in the procurement space of

large retailers and fashion brands as they are seeing a tremendous jump in volumes

led by online reach, wherein their digital stores are bringing global customers to

their doorsteps. At the same time, significant consolidation in global supply chain

has led to a substantial reduction in the vendor space, has led large brands and

fashion retailers to focus on their core business and shift the tedious and tough job

of procurement to established and reliable intermediaries.

PDS



Increase in online and digital activities

Source: We are social, Hootsuite

Faster adoption of digital payments

Source: Bain & Company

Sharp acceleration in US e-commerce penetration

Source: McKinsey Retail Practise

Increase in online and digital activities

Source: Company, Edelweiss research

Faster adoption of digital payments


We believe the above trend to become stronger and stronger as an intermediary,

similar to tech outsourcers, has in house design capabilities, a compliance team and

a strong system to monitor both the seller and buyer including inventories and

working capital.

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2 55

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3 69

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265

345

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FY14 FY15 FY16 FY17 FY18 FY19 FY20

(%)

(USD

bn

)

Amazon Revenue YoY growth


PDS


Commentary on technology

Source: Edelweiss research

Our discovery of the above trend led us to PDS management as we realise that, in

India, PDS is one of the key intermediaries thereof. We interacted multiple times

with PDS top management (Mr. Pallak Seth and Mr. Sanjay Jain) over the last few

weeks. Our initial observation on this is in the right direction and that a big

outsourcing wave is emerging in the procurement business.

If this evolves as we believe it would, then other than global players, even PDS may

be a big beneficiary of the above new wave of outsourcing. We attempt to explain

the business model in detail as we set out to further understand the above wave and

key players globally.

PDS



Key highlight: The business model

PDS sets up exclusive teams to serve its customers - key international brands

and retailers globally to understand their sourcing requirements. Through its

asset-light and extensive platform-based network, it sources multiple fashion-

related products through partners in key markets and manages the entire

supply chain execution for customers, and within an optimal lead time. It also

provides market know-how, in-house design-led capabilities (150+ designers).

The company has put special focus on sustainable practices across functions

with a commitment to make a positive difference to the entire ecosystem. It has

a 40-member team to maintain Social, Technical and Ethical Compliance

standards across 200 factories.

PDS entered into manufacturing in 2017 and has 36mn meters of capacity across

India, Bangladesh and Sri Lanka. The expansion into manufacturing has primarily

been done to increase presence in the USA. While the business is loss-making at

present, PDS is focused on improving performance through collaboration with

its sourcing business, and it is on the cusp of a turnaround.

It is targeting multiple avenues to expand business potential. These include: i)

retail & channel expansion; ii) geographic expansion; iii) product line expansion;

and iv) service offering expansion. Senior business heads have been on boarded

to drive business in new geographies and categories, and with new customers

along with redesigned compensation structures to drive performance.

Asset-light, compliant business model with end-to-end capabilities

PDS has developed a multi country and a multi-product sourcing network. PDS’s

platform-based business model provides the flexibility to operate across categories

and geographies. The company is asset light, which enables it to serve customers as

per their requirements with a shorter lead time, by sourcing from its network of

manufacturing partners and vendors globally.

PDS’s global reach

Source: Company, Edelweiss Research


PDS


PDS is a confluence of companies with varied strong domain expertise. It provides a

flexible, global-scale platform for collaborators. PDS provides a global plug-and play

platform to fashion industry entrepreneurs. These entrepreneurs join PDS as

collaborators and become an integral part of its business, leveraging the PDS brand

name to supply to major fashion brands and retailers.

PDS offers its customers (brands and retailers) a range of products sourced from its

partners sustainably. It offers them the expertise of an in-house design team,

located in fashion capitals of the world that are on the ball with design techniques

and technologies, not to mention latest fashion trends and preferences.

As per the company, brands and retailers are moving away from lowest-cost

suppliers to sourcing partners that understand emerging trends, have multiple

collaborations with production facilities across several locations or in-house

capabilities that are compliant with applicable regulations.

PDS client list

Source: Company

PDS has, over the last two decades, developed the following capabilities to serve

customers better:

Design team: It has a team of 150+ designers based out of London, Hong Kong,

New York, Barcelona, Dusseldorf, New Delhi, Shanghai, Colombo, Santiago and

Brussels; they provide insights into latest trends in the fashion industry. The

company produces over 10,000 new styles/month.

Market intelligence: The domain expertise of its sourcing partners enables PDS

to gather up-to-date information.

Expertise in technical aspects, wash and sustainability: In-house product

development, design, sampling and technical teams that provide expertise and

market know-how in managing a global trade.

Scalability: PDS’s partners benefit from its global presence, offering them

economies of scale due to sourcing operations and opportunities to collaborate

across businesses. This enables its business to have optimised cost structure

through shared resources. PDS sources ~1 million garment pieces/day from 500+

partner factories.

PDS



Focus on sustainable and ESG-compliant operations

The global fashion industry landscape has been evolving rapidly, with increased

focus on sustainability and digitalisation. This trend is likely to accelerate in the post-

pandemic world, with greater integration of ESG considerations across the supply

chain.

PDS has put special focus on sustainable practices across various functions such as

responsible procurement, eco-friendly manufacturing, ESG-focused investments,

not only from the standpoint of compliance, but also from the company’s

commitment to make a positive difference to the entire ecosystem. It has a 40-

member team to maintain Social, Technical and Ethical Compliance standards across

200 active factories. Team reports directly into PDS board, independent of

businesses.

For factories PDS interacts with, it has a Supplier Code on Conduct in place and zero

tolerance policy. Also, a financial evaluation is carried out for all factories on a

monthly basis in relation to wages, payment timelines, delivery performance, etc. It

also has a policy of zero tolerance on unauthorised sub-contracting.

End-to-end capabilities to address customer needs


To cover its business risks, PDS undertakes the following steps:

Credit: Along with regular monitoring, PDS has Secured Credit Payment

terms from customers and also takes insurance cover – Euler Hermes,

Atradius, ECIC Hkg, ECGC India.

Customer concentration: No single customer accounts for more than 15%

of group’s revenue; top 20 customers make up only 70% of total revenue

(Top 10: 56%).

Currency: PDS buys and sells in the same currency. If Buy & Sell are in

different currency immediate forex cover to be taken.

Multi Country

Sourcing

• Bangladesh

• Cambodia

• China

• Egypt

• India

• Jordan

• Myanmar

• Pakistan

• Sri Lanka

• Turkey

• Vietnam

Multi Product

Sourcing

• Apparel

• Home

• Accessories

• Footwear

Market

Intelligence

• Creative inputs based on market intelligence

Product

Development

• Fabric innovations

• Trend research

• Mood board

• Graphics

• Sampling

Global Quality

Compliances

• BSCI

• WRAP

• SEDEX

• LEED

Sustainability

• Support customers for enhancing sustainability footprint

Speed to

Market

• Digitalisation of value chain improves turnaround times for better go to market

Cost

effectiveness

• Margin improvement through

• Strategic sourcing

• Favorable credit terms for retailers and suppliers

From a risk management perspective,

as a global organisation, PDS has

identified six focus areas (6 Cs):

Customer Dependency, Credit,

Currency, Cost, Compliance and

Compliant Capacity


PDS


Focus on turning around manufacturing operations

PDS entered into manufacturing in 2017. It is focused on achieving a turnaround of

its manufacturing facilities through collaboration with its sourcing business. The

company has been seeing good traction and targets to double production and

increase efficiencies, which should, as a first step, lead to near breakeven and a self-

sustaining business. Its manufacturing business is at the cusp of a turnaround, with

special focus on Bangladesh manufacturing facilities.

PDS – Manufacturing capabilities

Particulars Progress Apparel,

Bangladesh

Green Smart Shirts,

Bangladesh

Nor Lanka,

Sri Lanka

Parc Designs,

India

Total capacity (# Machines) 2,500 2,000 320 1,000

Compliance Accord Compliance All local

guidelines

All local

guidelines

All local

guidelines

Focused manufacturing/ Speciality Primarily focused on

bottom wear

Formal and casual

shirts/blouses for ladies,

men and kids

Specialises in knit, kids

wear

Specialises in Ladies Softs

and girls-wear

Major customers Next, C&A and Express Next, Primark and

Bestseller

ASDA George, Next,

Primark Bestseller and Matalan

Ownership pattern Subsidiary Subsidiary Based on job-work

arrangement

Held through minority

stake


Key priorities for this segment are:

Focus on doubling production at facilities

Focus on large order volumes versus small order volumes

Enhance customer service to ensure repeat orders and referrals from

existing customers

Manufacturing segment performance

INR mn FY18 FY19 FY20 FY21

Revenues 887 2,446 3,100 2,846

Segment EBIT -526 -471 -572 -1,037

Source: Edelweiss Research, Company

PDS



Expanding into value-accretive business models

PDS is targeting multiple avenues to expand business potential. These include:

Geographic: Europe and the UK are predominant markets for PDS accounting for

nearly 84 per cent of its total business, and it is targeting to increase the share of

current customers across Europe, which is its largest market. It is looking to

expand its footprint in the US market on the back of manufacturing capabilities.

The company is also building teams focused on Australia, New Zealand and

Scandinavia targeting geographic expansion.

Product extension: PDS’s strong presence in apparels is now being expanded to

other categories such as home fashion and active wear across existing markets

Channel extension into new age online and D2C brands.

Senior business heads have been on-boarded to drive business in these new

geographies, categories and with new customers.

PDS’s multipronged expansion

Source: Edelweiss Research, Company

PDS has undertaken various strategic actions to deepen engagement with team

members and partners and accelerate the value creation process. On-boarding of

Group CEO, complemented with a team is one of the major strategic initiatives to

augment the value creation process. It is also targeting to align employee interest

with that of the shareholders and proposes to roll out ESOPs covering the wider

team of business leaders.

The company has also introduced a Joint P&L plan to facilitate partnerships between

individual business units, driving better collaboration across businesses and

providing higher serviceability to our customers.


PDS


Company Description

PDS Multinational Fashions manages supply chains for major brands and retailers

worldwide. PDS operates a global network of over 50 offices in 22 countries with

3,000+ employees and 5,000+ associates and factory workers across Europe, North

America, the Middle East and Asia.

It has a large network of factories, which have been technically and ethically audited

to industry standards. PDS caters to 190+ leading global brands and retailers with

c.1mn garments shipped daily.

The company has three key business segments: i) Sourcing; ii) Manufacturing; and

iii) PDS Venture Tech Investment.

Segment summary

Segment Revenue EBITDA CE

Description

Sourcing 60.7 3.2 5.1 Managing the entire supply chain execution of

customers

Manufacturing 2.9 -0.8 5.1 Own manufacturing capacities spread across

Bangladesh, Sri Lanka and India*

PDS Venture Tech NM NM 1.9 To develop new partnerships and invest in

businesses that fit its vision

Total (INR bn) 62.1 2.3 12.6


Note: CE refers to capital employed, * Investment in India is via a minority investment

Sourcing

PDS manages logistics and the complete global supply chain for its customers. The

company differentiates itself from other suppliers and sourcing firms by investing

capital in factories to upgrade their facilities and improve efficiencies, thereby

bringing about cost savings for retailers. It can hold stock for customers either at

source or PDS Multinational Group’s own warehouses in the UK, Germany, the US

and Canada.

In addition to consumer products available through its international sourcing

network, PDS has expertise in custom product design and development to provide

total global sourcing solutions to customers. PDS Multinational Group’s product

development and design specialists are based in Europe (including the UK), the US,

Canada, Australia and South America, and track the latest consumer trends in the

fast-paced global market.

PDS works closely with management teams to understand their business model as

well as near- and medium-term goals and sets up exclusive teams to service each

retailer on a direct basis. All of its clients have unique sourcing needs, and PDS builds

a manufacturing supply chain for their individual requirements and operating

practices in order to meet their goals. Dedicated teams are set up for each of its

customers to ensure service and confidentiality.

Each team works closely with the buying teams of customers and works on product

development/design to ensure quality goods that meet end consumers’ demands

and are on retailers’ shelves in a timely manner.

PDS also provides market intelligence, trend analysis, raw material procurement and

industry pricing to help meet end customers’ demands and preferences, while also

meeting quality benchmarks and improving time to market.

PDS



PDS Sourcing business key functions


Manufacturing linkages # of facilities

Bangladesh 240

China |Myanmar | Cambodia 103

Turkey | Jordan | Egypt 90

Sri Lanka 60

India 40

Pakistan 10

Vietnam 3


PDS product mix


PDS geography mix


Manufacturing:

PDS started its manufacturing business in 2017. It has a created its own

manufacturing capacities spread across three countries – Bangladesh, Sri Lanka and

India – where it has as many as 130 production lines.

Managing the entire supply chain execution of end-customers

Provides in-house expertise and market know-how on managing global trade

In-house product development, design, sampling, and technical teams

100% pre-sold, no inventory risk, asset-light

Designers based in London, Hong Kong, New York, Barcelona, Dusseldorf, New Delhi, Shanghai, Colombo, Santiago and Brussels

Men's wear36%

Ladies wear33%

Children wear18%

PPE & Others

9%

Essentials4%

UK & Europe

88%

North America

8%

Asia, Middle East

4%

Others0%


PDS


PDS’s manufacturing facilities

Company Location Clients Capacity

(mn pieces)

Capacity

(Machines) Highlights

Nor Lanka Sri Lanka ASDA George, Next,

Primark 2.2 320 Specializes in Knits, Kids wear

Parc Design India Bestseller and

Matalan 6.1 1,000 Specializes in Ladies Softs and Girls-wear

Green Smart Shirts Bangladesh Next, Primark and

Bestseller 12.2 2,000

Formal & Casual shirts/blouses for Ladies,

Men and Kids

Progress Apparel Bangladesh Next, C&A and

Express 15.5 2,500 Primarily focused on bottom wear

Total 36.0 5,820


PDS Ventures Tech Investment

PDS invests in ventures that focus on creating a sustainable value chain for the

fashion industry, reducing wastage or sustainable usage of raw materials, and using

advanced analytical tools to improve revenues and profitability.

PDS Venture Tech Investment also focuses on investments in sustainable

technologies, circular economy, carbon neutrality, and waste & water management.

And it collaborates with leading ESG-focused funds, which invest in ventures

promoting the use of environment friendly materials and building sustainable

communities.

PDS is continually exploring opportunities for developing new partnerships and

investing in businesses that fit with PDS’s vision.

PDS Venture Tech Investments & Others

Source: Company

Through these investments, PDS enhances its value proposition for customers,

vendors and stakeholders. The company partners leading funds for co-investing in

select opportunities.

PDS



History & Timelines

PDS’s genesis dates back to 1999, when the promoter family established its flagship

companies – Norwest Industries Limited in Hong Kong and Poeticgem Limited in the

UK. PDS gradually expanded operations via a hub-and-spoke model and on-boarding

entrepreneurs and their teams on a pre-defined criteria of product specialisation,

geographical advantage or customer base.

Instead of acquiring companies, it partnered them. It then graduated to a platform

model, where existing setups were made part of the PDS group in a plug-and-play

format.

Key events

Year Event

1999 • Promoter family established first flagship companies Norwest Industries in

Hong Kong, Poeticgem in UK

2003-2005 • Received approval for sourcing operations in India

• Established sourcing operations in China, Bangladesh

2007-2008

• Entered into denims through establishment of Zamira Fashion in Hong Kong

• Launched direct marketing operations in Chile under the names – PG Group

and PG Home

• Marked entry into non-apparel category of home wear and home furnishing

• Formed division in UK for design, supply and manufacture of licensed apparel

products

2009-2010 • Launched Bangladesh direct marketing operations

• Established direct marketing business operations in India

2012-2013

• Established operations in Turkey, Germany, Sri Lanka and Spain

• Expanded direct marketing offices in Melbourne, Australia

• Commenced Corporate Services operations in Bangalore

• Received license for operations in Myanmar

• Set up leased manufacturing operations in Sri Lanka

2014

• Listed on Indian Stock exchanges post demerger

• Launched NAVEX to strengthen PDS’ code of conduct for global compliance

• Entered into JV with Techno Germany

• Launched operations in Cambodia

• Fabric sourcing division setup in Shanghai

• Launched sourcing operations in Pakistan and Belgium

• JJ Star operations started in South China

2016-2017

• Launched manufacturing facilities in Bangladesh under Progress Apparels

(Bangladesh) Limited and Green Smart Shirts Limited

• Forayed into Technology business to develop and offer cloud-based software

and mobile application in HRM-Qandle

2018

• Commissioned the two manufacturing units in Bangladesh

• PDS Towers inaugurated in Gurgaon, India

• Acquired a manufacturing unit in Sri Lanka (erstwhile TRINCO factory)

• Strategic investment in Atterley.com Holdings, an online fashion retailer in UK

2019-20

• Acquired Kik Services Unit Limited in Bangladesh (Techno Sourcing Bangladesh

Ltd)

• Acquired Lilly & Sid Ltd, UK engaged in branded kids apparel

2020-21

• Appointed Group CEO for driving sustainable growth, profitability and value

creation

• Business Heads on-boarded to drive business in new geographies and

categories



PDS


Management Overview

Mr. Deepak Seth, Chairman: Mr. Seth is the founder and Group Chairman of the

four well-known apparel manufacturing and sourcing and education groups with a

footprint in more than 20 countries – PDS Multinational Fashions Limited, Pearl

Global Industries Limited, PDS Multinational Group Limited, Lerros Moden GmbH

and Pearl Academy of Fashions.

He is an active member of the Apparel Export Promotion Council (AEPC) of India and

held the post of ‘Vice Chairman’ of the Eastern Region of AEPC for two years. He is

also an executive member of the Apparel Exporters and Manufacturers Association

(AEMA), and was awarded ‘Udyog Ratna’ Award by the Haryana government in 2006

for his entrepreneurial skills.

Mr. Seth is an economics graduate from St. Stephens College, University of Delhi,

and an MBA from Jamnalal Bajaj Institute of Management Studies, Mumbai.

Mr. Pallak Seth, Vice Chairman: Mr. Seth is a leading entrepreneur. At the age of

21, he started his entrepreneurial journey by setting up an apparel sourcing business

in Hong Kong. In 1999, he established Norwest Industries, which has today

diversified into PDS Multinational Group Limited. He supports founders to solve

market frictions and leveraging technology as an angel investor alongside trusted

partner.

Mr. Seth had co-invested alongside many investors such as Sequoia Capital, Social

Capital, Sherpa Ventures, Storm Ventures, Sierra Ventures and helped

entrepreneurs through customers, co-investors, and partner introductions. He is

also Executive Director on the Board of Lerros GmBH, Germany, and External Advisor

to Bain Advisor Network, Bain since 2019.

Mr. Seth is a Bachelor of Arts in Economics and International Business with Magna

Cum Laude distinction from Northwestern University, USA. He is an alumni of

Harvard Business School.

Mr. Sanjay Jain, Group Chief Executive Officer: Mr. Jain was appointed as Chief

Executive Officer and Whole Time Key Managerial Personnel of the company with

effect from January 15, 2021. Prior to this, he was the CEO at Future Retail and Group

CFO for Future Group India. At PDS, he is vested with the responsibility of driving

growth, transformation, operational excellence, and value creation initiatives across

the company and its subsidiaries.

Mr. Jain is a graduate from Kurukshetra University and has completed his masters

from the University from Delhi.

Board of directors

Person Designation

Mr Deepak Seth Chairman (Non-Executive and Non Independent)

Mrs Payel Seth Non-Executive and Non Independent Director

Mr Pallak Seth Vice Chairman (Non-Executive and Non Independent)

Dr. Ashutosh Bhupatkar Independent Director

Mr. Ashok Kumar Sanghi Independent Director

Mr. Ashok Kumar Chhabra Independent Director

Ms. Saraswathy Venkateswaran Independent Director

Mr. Parth Gandhi Additional Non-Executive Non-Independent Director


PDS



Additional Data

Management

Chairman Deepak Seth

Vice Chairman Pallak Seth

CEO Sanjay Jain

CFO Ajai Singh

Auditor M/s Walker Chandiok & Co

Holdings – Top 10* % Holding % Holding

Payal Seth 53.3 LTS Investment 1.2

Deepak Kumar 12.1 C Mackertich 1.2

Dhireshbhai Shah 6.2 Brescon Ventures 1.1

Mukul Agrawal 2.8 Pallak Seth 1.1

Premier Investment 2.2 Pearl Global 0.2

*Latest public data

Recent Company Research Date Title Price Reco

Recent Sector Research Date Name of Co./Sector Title

Rating Interpretation Source: Bloomberg, Edelweiss research

Daily Volume Source: Bloomberg

Rating Distribution: Edelweiss Research Coverage

Buy Hold Reduce Total

Rating Distribution* 177 55 19 252

>50bn >10bn and <50bn <10bn Total

Market Cap (INR) 228 39 3 270

*1 stocks under review

Rating Rationale

Rating Expected absolute returns over 12 months

Buy: >15%

Hold: >15% and <-5%

Reduce: <-5%


PDS


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