Ternary, layer-type, transition metal phosphosulphide, PdPS, is synthesized by vapour transport method and used as battery electrode for lithium-ion battery. The performance of the electrode in bulk form is enhanced when it is made into a composite with reduced graphene oxide (rGO). The specific capacity, capacity retention and cycling behaviour at different current densities have been investigated. Relatively stable capacities of ∼350 mAh g−1 at a current density of 25 mA g−1 and ∼200 mAh g−1 at 100 mA g−1 are observed. The composite electrode is found to be active for sodium-ion battery as well.