We investigate the electronic structure of ternary palladates APd3O4 (A = Sr, Ca) using valence band photoemission spectroscopy and band structure calculations. Overall width of the valence band and energy positions of various features in experimental valence band spectra are well captured by band structure calculations using hybrid functional. Band structure calculations within local density approximations lead to metallic ground state while the calculations using hybrid functional provide band gap of 0.25 eV and 0.22 eV for CaPd3O4 and SrPd3O4 respectively, suggesting moderated to strong electron correlation strength in these narrow band gap semiconducting palladates. High resolution spectra reveals negligibly small intensity at Fermi level, EF , for parent compounds while hole doped SrPd3O4 (by 15% Li substitution at Sr site) exhibits a Fermi cut-off suggesting metallic character in contrast to semiconducting transport. These observations reveal the importance of localization of electrons in case where the Fermi edge falls in the mobility edge.