PACRA maintains ratings of Service Industries at AA

September 22, 2025 (MLN): The Pakistan Credit Rating Agency (PACRA) has maintained the entity ratings of Service Industries Limited (PSX: SRVI) at ‘AA’ for the long term and ‘A1+’ for the short term, with a stable outlook.

The reaffirmation reflects SRVI’s dual role as both a holding and an operating company.

As a holding entity, SRVI has strategic stakes in Service Long March Tyres (Pvt.) Ltd (SLM) and Service Global Footwear Ltd (SGFL), alongside full ownership of Service Tyres (Pvt.) Ltd and Service Retail (Pvt.) Ltd, which oversee the tyre and tube operations and footwear retail business, respectively.

On the operating side, SRVI continues to manage its footwear manufacturing facility in Gujrat.

PACRA highlighted that the group enjoys a strong market position across its operating segments, a diversified investment portfolio, and growing exports, which have bolstered consolidated revenue and profitability.

The Company benefits from a sound governance framework and prudent risk management practices.

In the domestic market, SRVI is focusing on expanding its footwear retail footprint through new outlets and product diversification.

The tyre and tube business retains leadership in two- and three-wheeler and light commercial vehicle bias tyres, while SLM has built a sizeable share in the truck and bus radial (TBR) segment by offering competitive local alternatives to imports. On the export front, both SLM and SGFL continue to drive the group’s global expansion strategy.

Supported by a more stable macroeconomic backdrop in FY25GDP growth of 2.68%, easing inflation, lower policy rates, and FX stability SRVI’s consolidated revenue rose 30% in CY24, reaching Rs125bln compared to Rs96.5bln in CY23.

Profitability improved on the back of higher volumes, pricing adjustments, operating efficiencies, and economies of scale.

The ratings also incorporate SRVI’s strengthened financial risk profile, with adequate cash flows and coverage levels, though working capital remains slightly stretched. The capital structure is leveraged due to concessionary financing for expansion.

Going forward, management aims to sustain growth by broadening exports, advancing import substitution, and investing in innovation and diversification.

PACRA noted that the ratings are contingent on SRVI maintaining its leadership across business segments, sustaining profitability in line with expansion, ensuring prudent working capital management, and generating consistent dividend flows from investments.

Service Industries Limited (PSX: SRVI), incorporated in 1957, operates under the brand name ‘Servis’. It is one of Pakistan’s largest manufacturers of tyres and tubes (agricultural, 2/3/4-wheelers), TBR, and footwear, and is also a major exporter.

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