PDS Ltd leverages trade realignment to shield margins amid global demand shocks
12 February 2026, Mumbai
As of February 2026, the global apparel supply chain is undergoing a structural reset, and PDS Limited is positioning itself at the center of this transition. Reporting its Q3 FY26 financial results, the global fashion infrastructure platform revealed a strategic shift toward high-efficiency manufacturing and design-led sourcing.
Despite a cautious global consumer environment, the company saw its Gross Merchandise Value (GMV) climb 6 per cent to Rs 4,660 crore in the quarter ended December 31, 2025. This growth arrives at a pivotal moment as the industry navigates the expiration of the US ‘de minimis’ exemption and the onset of new India-US Interim Trade Agreement, which recently saw textile tariffs drop from 50 per cent to 18 per cent.bilateral trade frameworks.
Aggressive deleveraging and operational efficiency drive resiliency
The most significant material development in PDS’s latest filing is a radical optimization of its balance sheet. The company slashed its net debt from Rs 374 crore in March 2025 to just Rs 70 crore by December - a reduction of over 80 per cent in just nine months. This fiscal discipline was boosted by a sharp contraction in net working capital days, which fell from 17 to 7 days.
According to Sanjay Jain, Group CEO, the firm is currently executing a BCG-led cost transformation program to streamline underperforming verticals and enhance long-term profitability, particularly as retailers shift toward shorter order visibility and more frequent, smaller-batch inventory cycles.
Strategic acquisitions to capitalize on new trade corridors
PDS is aggressively retooling its sourcing footprint to benefit from the India-US Interim Trade Agreement, which recently saw textile tariffs drop from 50 per cent to 18 per cent. Central to this strategy is the recent acquisition of Knit Gallery, a Tirupur-based manufacturing specialist. This facility serves as a primary hub for capturing duty-free and reduced-tariff opportunities under the newly ratified India-EU and UK Free Trade Agreements. Pallak Seth, Executive Vice Chairman noted, the company’s diversified operations across India, Bangladesh, and Vietnam are designed to hedge against geopolitical volatility, providing global brands like TJ Maxx and Primark a stable, compliant ‘plug-and-play’ infrastructure amidst shifting regional trade loyalties.
Navigating margin pressures with design-led sourcing
While topline revenue grew 2 per cent this quarter, the company faced a 18 per cent decline in Profit After Tax (PAT), reflecting the high costs of operational realignments and the ‘Pillar II’ global minimum tax impact. To counter these headwinds, PDS is shifting its focus toward high-margin design-led sourcing, which saw significant traction this year. By integrating AI-driven design tools and localizing production close to raw material hubs, the firm aims to offset rising logistics costs. With an order book of Rs 5,179 crore, the company is betting that its transformation from a traditional sourcing house to a technology-enabled infrastructure platform will provide the necessary scale to survive a year defined by ‘uneven stabilization’ in Western retail markets.
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