PDS Limited (PDSL) Earnings Call Transcript & Summary

Good afternoon, honorable Chairman and Board of Director and shareholder of PDS Limited. I, Kalpana Singh, on behalf of Link Intime, welcome you all at 12th Annual General Meeting of PDS Limited through our audio and other visual facility called InStaMeet. To enable us to conduct the meeting smoothly, members and other participants are requested to keep their device in mute mode throughout the session. The members who have been preregistered themselves as a speaker to speak during the meeting, they will only unmute their device to speak, then their turn will come. I now request to the Company Secretary, Mr. Abhishekh Kanoi, to proceed further. Over to you, sir. Thank you.

Thank you, Kalpana. Good morning and good afternoon to the dear shareholders, to our Board members and the head of departments who are joining this meeting from various parts of the world. I, Abhishekh Kanoi, Head of Legal & Company Secretary and Compliance Officer of PDS Limited, welcome you all to the 12th Annual General Meeting of the company to discuss our accomplishments during the financial year 2022-'23. We hope all of you and your families are safe and in good health. This annual general meeting is a virtual meeting through videoconferencing and other audiovisual means in compliance with the circulars issued by the Ministry of Corporate Affairs and the Securities and Exchange Board of India. The requisite quorum required for this meeting is present. I would now like to take you through certain important parameters regarding participation at this meeting. The facility of joining the AGM through videoconferencing and other audiovisual means is being made available for all the members on a first come, first served basis. All members who have joined this meeting are by default placed on the mute mode by the host to avoid any disturbance arising from the background noise and ensure smooth and seamless conduct of the meeting. Once the question-and-answer session start, the Chairman will announce the name of the shareholders who have registered as speaker shareholders one by one. The speaker shareholder will thereafter be unmuted by the host to start speaking. Shareholders are requested to click on Video On button. If the shareholder is not able to join through video for any reason, the shareholder can speak through an audio mode. While speaking, we would request the speaker to use earphone phone so that he or she is clearly audible, minimize any noise in the background, ensure WiFi is not connected to any other devices, no other applications are running and there's a proper lighting to have a good audio and video experience. If there is any connectivity problem at speakers' end, we would request the next speaker to join. Once the connectivity improves, the speaker shareholder will be called back again to speak once the other speakers who have registered, complete their turn. We would like to require the speaker shareholders to kindly limit their speech to 2 minutes. During the meeting, if any member faces any technical issues, he or she may contact the helpline number mentioned in the notice of the AGM. Now I would request our respected Chairman, Dr. Deepak Kumar Seth, to occupy the Chair and preside over this meeting. Thank you very much. Mr. Chairman, over to you.

Thank you, Abhishekh. Warm greetings to all my dear shareholders and Board members who are joining this meeting from India and various parts of the world. A very warm welcome to all of you at the 12th AGM, and I hope that all of you are keeping safe and staying healthy. The requisite quorum being present and therefore, I call the meeting to order and start the proceedings of the meeting. All the directors of the company are present at this meeting, including the Chairman of the Audit Committee, stakeholders, Relationship Committee, Corporate Social Responsibility Committee, Risk Management Committee, and Nomination and Remuneration Committee. I would now introduce the Board members and Executives present at the meeting: Mrs. Payel Seth, Promoter Director; Mr. Pallak Seth, Executive Vice Chairman; Mr. Parth Gandhi, Non-Executive and Non-Independent Director; Ms. Yael Gairola, Non-Executive and Non-Independent Director; Mr. Mungo Park, Independent Director; Mr. Robert Sinclair, Independent Director; Mr. Nishant Parikh, Independent Director; Mr. BG Srinivas, Independent Director. We also have with us today our Group CEO, Mr. Sanjay Jain; Mr. Rahul Ahuja, Group CFO; Mr. Abhishekh Kanoi, Head of Legal & Company Secretary and Head of Department from the various verticals. I would also like to inform you the representative of our statutory auditors, Walker Chandiok & Co LLP and representative of our secretarial auditors and former secretarial auditors, SGGS & Associates, and MAKS & Co., respectively, are also present at this meeting today. The company has appointed Mr. Gaurav Sainani, Partner SGGS & Associates, Practicing Company Secretary, as Scrutinizer to scrutinize the votes cast at the meeting and through remote e-voting and for ensuring that voting process is conducted in a fair and transparent manner. I would also like to mention that as per the Companies Act 2013 and SEBI Listing Regulations, which provides for electronic voting, the company had provided its members the facility to cast the vote through remote e-voting system administered by our registrar and share transfer agent Link Intime India Private Limited. Shareholders who are present in the meeting and have not casted their vote on the resolution through remote e-voting and are otherwise not barred from doing so, are eligible to work through e-voting facility during the meeting. This process of e-voting that has been provided in the notice of AGM sent to shareholders on the videoconferencing page, you have to click on the link for e-voting, Cast Your Vote. Please note that shareholders members who have voted through remote e-voting prior to the AGM are eligible to attend, participate in the AGM through videoconferencing and other audiovisual means. However, they are not eligible to vote again during the meeting. So shareholders may cast their vote accordingly during this meeting. The certificate from Statutory Auditors in compliance with SEBI share-based employee benefit and sweat equity regulation in 2021, SEBI, Share Based Employee Benefits and Sweat Equity Regulations 2021, registers as required under Companies Act 2013, is available for inspection electronically on the website of the company during the meeting. The notice dated 11th May 2023 convening this AGM and the copy of the annual report for the financial year ending March 31, 2023 have already been circulated to the members of the company electronically. With your permission, I take the Notice convening the meeting as received and well. The auditor's report on stand-alone and consolidated financial statements and secretarial audit report of the company for the financial year ending March 31, 2023 does not contain any qualifications or reservations and adverse remarks. Accordingly, reports are not required to be read out as required on the provision of the Companies Act 2013. Now with your permission, I will begin my formal address to the shareholders. A very warm welcome to all of you to our company's 12th Annual General Meeting. Today, as I address you all, I feel a sense of pride and gratitude reflecting on the fiscal year 2022-'23 we have that presented us with both global challenges and growth opportunities. Despite the obstacles faced, our company has demonstrated resilience and further strengthened its position as the leading global fashion infrastructure company. The global economic pressures, high cost of capital and supply chain disruptions have loomed over the industry. But amidst these challenges, we have witnessed new and strategic opportunities unfolding before us. To cater to our global business, effectively, we are continually enhancing our capabilities. We have focused on strengthening our digital infrastructure, driving process improvements and increasing efficiencies. By doing so, we are ensuring that we remain at the forefront of the industry adapting to the evolving demands of our customers. The financial year 2022-'23 has been a year of remarkable growth for your company. Our top line reached an impressive INR 10,577 crores, representing a 20% increase compared to the previous year. The Sourcing segment, which accounts for 96% of our top line and has achieved a 19% growth, generating at INR 10,105 crores of revenue with an ROCE of 48%. Our Manufacturing segment also reported a commendable growth of 28% with a top line of INR 703 crores and return on capital employed of 6%. Looking at the last 5 years, we have achieved an annual growth of 16.5% in revenue with a growth of 64.8% in EBITDA and a 75.7% growth in PAT. These are, indeed, amazing figures, and you should be all proud of what your company has achieved. During the fiscal year, we also invested in our manufacturing capabilities. In Bangladesh, we launched a state-of-the-art wash plant funded by the Good Fashion Fund. This fund initiated by the Laudes Foundation, aims to drive systematic change in the textile and apparel industry by supporting innovative technologies and good fashion practices. Additionally, we established the centralized cutting plant in Sri Lanka, further enhancing our manufacturing vertical. It may be mentioned like Good Fashion Fund -- ours was the first company factory in Bangladesh to get this funding because of our practices in green and technology and ESG. So something to be really proud of to be the first company in Bangladesh to get funding from such a fund. I'm delighted to share that the company is venturing into high-margin and value-accretive services, including wholesale and brand management solutions. Through our U.K. subsidiary, we entered into a license agreement with our Authentic Brands Group for the Forever 21 brand. This expansion allows us to deliver quality products and great style to consumers in the U.K. and Europe, while also opening those to bring on board the best-in-case partners in our supply chain. Opportunity like this will further enable us to expand our offering to our marquee brands. In addition to our organic growth, we have also expanded to strategic acquisitions. In 2022-'23, we acquired 2 businesses, Sunny Up, a U.K.-based licensing business and DBS Lifestyle, an India-based design and sourcing business. These acquisitions enable us to expand our service offerings in a dramatic manner. During the year, we also -- we all welcomed Mr. BG. Srinivas as an Independent and Non-Executive Director of the company. Mr. Srinivas has over 30 years of experience in the information technology sector and was previously the President and Whole-Time Director of Infosys Limited. It's a well-known and respected member of India Inc. with global expertise and experience in strategy, operations and finance, especially the technology sector. The Board of Directors adopted the dividend distribution policy last fiscal with an aim to declare a dividend of at least 25% on the consolidated profit after tax for each fiscal year. In line with that commitment, the Board of Directors have proposed a dividend of 255% amounting to INR 5.10 per share, of which INR 2.6 per share was distributed as an interim dividend during the year. We believe this reflects our company's dedication to creating value for all our shareholders. Our commitment to sustainability remains unwavering. We continue to reduce our environmental footprint and in corporate sustainable practices throughout our operations. We prioritize social responsibility to our community programs, making a positive impact on the communities where we operate. The PDS platform proudly embraces its diverse workforce, encompassing various nationalities, ethnicities and diverse professional and education background. The PDS platform base is a diverse workforce, encompassing various nationalities, ethnicities and diverse professional education background. Each team contributes their -- unique perspective, seamlessly aligning with the overarching PDS culture. As an organization, we celebrate this diversity as our workforce probably represents over 25 nationalities over the PDS Group. We continue to posture a culture that values our employees, treating them with respect and empathy. I'm proud to share that we have been recognized as a great place to work, both in India and Sri Lanka, underscoring our commitment to providing an engaging and supportive work environment. As we navigate the dynamic economic and fashion landscape, we recognize that the coming quarters may pose challenges and impact our short-term growth. However, we remain focused on building resilience and are optimistic about the long-term outlook. With our global platform and spend capabilities, we are well positioned to exceed $2.5 billion in top line revenue in the next couple of years accompanied by gradual increase in profitability. I would like to express my sincere gratitude to all our employees for their dedication and contributions. They are really the driving force behind our success. I also extend my thanks to our esteemed Board of Directors for their guidance and support to our shareholders. I deeply appreciate your continued trust and confidence in our brand strategy and vision. Looking ahead, we are confident in our ability to overcome challenges and achieve our long-term boots. Together, we will achieve and continue to create value for all our shareholders and drive PDS towards new heights of success. Thank you all for joining us today and giving me the opportunity to share my thoughts with you. I would request Abhishekh Kanoi, Company Secretary of your company, to proceed with the agenda item on the notice. Thank you.

Thank you, sir. Thank you so much, Mr. Chairman, for the lovely speech. Dear members, there are 3 resolutions in the Notice to be approved by the members at this meeting today. Item #1, adoption of the audited stand-alone financial statement of the company for the financial year ended 31st March '23, together with the reports of the Board of Directors and auditors thereon; and the audited consolidated financial statements of the company for the financial year ended 31st March '23, together with the report of the auditors thereon. Item #2, a declaration of the INR 2.6 per share for the financial year ended 31 March '23. Item #3, appointment of a Director in place of Mr. Payel Seth, who retires by rotation and being eligible, offers herself for reappointment. We now move on to our discussion with the shareholders who have registered themselves as speakers to speak in this meeting today. Before we commence the session, I would like to share a few guidelines for the question-and-answer session, please. We will call the speakers who have registered themselves early to speak one by one. Members are requested to unmute their microphone before speaking and also enable their webcam if they wish to appear on the video. Answers to the financial queries raised by the shareholders will be provided once all the speakers have spoken. I'm requesting my registrar and share transfer agent registered rate and share transfer agent, Link Intime, to invite speaker one by one, who have raised [indiscernible] speaker to join this AGM today. Members, you are requested to kindly limit your questions and speech to 2 minutes so that all the other shareholders can get the equal opportunity to participate in the meeting today. Kalpana, over to you.

Thank you, sir. Now our first speaker is Mr. [ Bharatraj Kanakaraga ].

Sir, first of all, a very good afternoon, my Chairman, Mr. Deepak Kumar Seth; and my Executive Vice Chairman, Mr. Pallak Seth; and Mr. Sanjay Jain, Group CEO; entire Board of Directors. My best wishes to all you, sir. I'm happy to see you all safe, healthy and fine. Chairman sir, thank you for a wonderful dividend, sir. Yes, we believe our leadership and trust them. You are giving you the dividend payout to 500%, thank you, sir. And we except this financial year 1,000% dividend from your side, sir, because you are working very hard to give results to the shareholders, sir. I'm very proud, sir, the way you're expanding my company all over the word. At present, we are in 22 countries, sir. What is your future plans? Because you have any plans to make it to 50 countries, in other parts of the world? Please let me know, sir. Sir, every year, if I compare with the last year annual report today with the annual report, the brands are changing, sir. Because there is -- if we compare with the last year brands, this year, there is -- that brands are not continuing, sir. May I know why this is happening, sir? Means, the -- internationally, we will change the brands and the clients are shifting from our base to other base. Please let me know, sir. And 1 more thing, sir, CSR is doing wonderful, sir. Thank you very much. Sir, I thank my Secretary Department, Chairman, sir, [indiscernible] annual report. Unfortunately for me, sir, I visited Bombay, sir. I came from Hyderabad to Bombay to our corporate office on 27th of this week, sir. But due to the heavy rains, my office has been closed, sir. And Deepak Ji is in Bangladesh. And our Sheetal Madam or [indiscernible], nobody there in office. But I'm very happy to visit my office, sir. Wonderful corporate office, sir. Thank you. Deepak Ji, you very much. At least you give an opportunity to meet you, Deepak Ji. You are always unavailable on the phone and always unavailable to talk to you. Please give an opportunity to talk to you. Once again, entire [indiscernible], my wishes to you, sir. Take care, sir. God bless you. And thank you very much.

Let's hear all the questions, then we can answer them together.

Our next speaker is [ Mr. Ajay Kumar Jain ].

[Foreign Language]

Now I would like to speak is [ Mr. Vimal Kumar Agarwal ].

Yes, Mr. Agarwal. Please go ahead.

Hello, can you hear me?

Mr. Agarwal, your voice is not audible. There's a lot of background noise. Kalpana, can we have next speaker, while he is somewhere in the silent area and he can call back us again.

Sure, sir. Our next speaker is [ Mr. Rajendra Jamunadas Seth ].

[Foreign Language]

Our next speaker, [ Ms. Lekha Shah ].

Thank you, sir. Respected Chairman sir, Board of Directors, and my fellow members, good afternoon to all of you. Myself, Lekha Shah from Andheri Sakala. First of all, I'm very much thankful to Company Secretary, Abhishekh Ji, for extending very good investor services and also sending me the AGM notice well in time, which is full of knowledge, facts and figures in place. So I'm very grateful to our Company Secretary, Abhishekh sir. Thank you, Chairman sir for explaining [indiscernible] the company. Congratulation for excellent work, sir. Sir, I pray to god that [indiscernible] shower the blessings upon you. Chairman sir, I would like to thank all the persons of our company for receiving awards and recognition [indiscernible] during the year '22 and '23. And also I'm glad the company is doing very well in the field of CSR activities. Sir, I would like to ask few questions. My first question is, with the global economic crisis and low consumer spending for luxury goods, what steps taken to make fashion affordable all to customers? The current year, any plan for acquisition in the domestic and international market? What initiatives taken to reduce carbon footprint and conversation by our company? Chairman sir, I hope the company will continue videoconference meetings in future. So I strongly and wholeheartedly support all the resolutions for today's meeting and my best wishes always our company and its prosperity.

Our nice speaker is [ Mr. Sarabjeet Singh ].

Chairman sir, first of all, good afternoon to you, all the Board of Directors, all the staff of PDS Limited and my co-fellow shareholders. [Foreign Language] [Technical Difficulty]

Kalpana, what happened?

Sir, I think Mr. Sarabjeet Singh is not able to speak. Let me check once.

[Foreign Language]

Yes, Singh Saab [Foreign Language].

[Foreign Language]

Our next speaker is [ Mr. Reddappa ].

I'm opening my video cam also, sir. Please allow me, sir.

Okay, sir.

I'm I visible, sir, now?

Not, sir. You're not -- now you're visible.

Yes. Thank you, sir. Mr. Chairman, Deepak Seth Ji and also Pallak Seth Ji, Payel Madam, [ Ashish Gupta Ji ] and also Parth Gandhi Ji, Robert Ji, Mungo Park Ji, Yael Gairola Ji, Sanjay Jain Ji, BG Srinivas Ji and my Company Secretary, Abhishekh Ji, [Foreign Language]. Sir, my name is [ Reddappa Gundluru ]. I'm from Hyderabad, sir. I'm a financial advisor, sir. Sir, as a shareholder of my global fashion infrastructure company, PDS Limited, 12th Annual General Meeting, and I'm very happy about the company's performance for financial '23. Sir, Mr. Chairman, you have given very wonderful information, speech by you, sir. [Foreign Language]. And also, sir, I have received the annual report, sir. [Foreign Language]. Very wonderful, sir. [Foreign Language] I felt very happy, sir. [Foreign Language] Company Secretary and all, sir, the way of doing the governance is very wonderful, sir. Transparency [Foreign Language]. World class [Foreign Language]. Strong financial performance. [Foreign Language]. Sir, there is no single black spot in my balance sheet -- financial spot. With us, $1.3-plus billion revenue in financial [ '23 ], congratulate for that, sir. And also, sir, 1 million pieces of [ a day ] production, sir. [Foreign Language]. Sir, world-class certified manufacturing facility, sir. [Foreign Language]. And this is my first time attending AGM meeting, sir. wonderful, sir. And also sir, [Foreign Language]. Company has given 65% -- more than 65% CAGR, sir. [Foreign Language], wonderful. And also, sir, my company has been maintaining the healthy dividend payout, sir. [Foreign Language]. And also, database also improved, sir. Sir, [Foreign Language] congratulations for this wonderful achievements. You have very good growth mindset. Thank you so much. And also [Foreign Language]. Yes, we achieve tremendous awards, wonderful awards, recognition towards our hardwood, towards all the facilities. [Foreign Language], more than double. So what is the steep increase in traveling and legal. [Foreign Language]. I have supported all the resolutions, Mr. Company Secretary. I would like to thank your services, for wonderful services. And also -- this [Foreign Language] Company Secretary Ji. You're very qualified, versatile person. [Foreign Language] So wonderful. I appreciate you, sir. Kudos to you. [indiscernible], sir, thank you so much for giving this opportunity to speak in front of with this Annual General Meeting with the happy moments. So I wish all the best. We have very good faith on you, trust on you -- with the Board. Under your leadership, we will achieve [indiscernible] in coming financial years, and under leadership of Mr. Pallak Seth Ji. Thank you so much. I wish good health and [ peaceful ] to you. Thank you.

Now our next speaker, [ Mr. Gagan Arora ]. Mr. Gagan right now not with us. So we are going forward to another speaker, [ Mr. Abhishek Kana ].