Lahore: The Pakistan Credit Rating Agency (PACRA) has assigned initial ratings to Service Tyres (Private) Limited, a subsidiary of Service Industries Limited, highlighting its significant standing in Pakistan's tyre industry. With over 30 years in the sector, Service Tyres is renowned for operational efficiency and brand recognition, offering a wide range of products including two- and three-wheeler tyres, agricultural tyres, and auto spare parts.

Service Tyres maintains a strong market presence both locally and internationally, supported by a robust distribution network. The company operates an advanced production facility in Gujrat, facilitating its service to both domestic and export markets. In the first half of the calendar year 2025, the company reported a 12.1% increase in topline revenue, amounting to PKR 25.940 billion, driven by higher volumes and price adjustments.

The broader economic environment in fiscal year 2025 exhibited recovery, with GDP growth at 2.68%. This was aided by improvements in the industrial and services sectors, and a stable foreign exchange rate, which bolstered consumer confidence. The Large-Scale Manufacturing index showed significant growth in the transport sector, with notable increases in automobile production.

Service Tyres' capacity utilization was reported at 66.5% for tyres and 75.7% for tubes in 2024. Despite modest increases in the cost of goods sold, the company maintained stable profitability margins by reducing operating and finance expenses.

The company’s financial risk profile shows adequate working capital management and a capital structure that includes both long-term and short-term borrowings, primarily for working capital needs. PACRA’s ratings reflect the strong business acumen of the company’s sponsors, effective governance practices, and experienced leadership. The ratings are contingent on the company maintaining its leading position in the domestic market and consistent growth in a challenging business environment.