Service Industries Limited ('SIL' or 'the Company') was incorporated in 1957 under the Companies Act, 1913 (now 'Companies Act, 2017'). The Company got listed on the Pakistan Stock Exchange (PSX) in June’1970. The Company has a current free float of ~50.00% shares.

Service Industries Limited (SIL) traces its origins back to the late 1930s in Lahore when its founders Ch. Muhammad Saeed, Ch. Nazar Muhammad and Ch. Muhammad Hussain began manufacturing and supplying mosquito nets, minor steel products, leather chappals, and eventually travel bags, hand bags, and holdalls, made of canvas and leather . The Company was formally incorporated as a private limited entity in 1957 and later converted into a public limited company on September 23, 1959. In 1954, SIL installed a shoe manufacturing plant in the industrial area of Gulberg, Lahore, commencing large-scale footwear production the same year. Around this time, its first retail outlet on Mall Road was established, which later became a dedicated Servis store. The Company’s expansion continued with the acquisition of land in Gujrat, where one of Punjab’s largest industrial complexes was set up, encompassing the production of leather and canvas footwear, canvas fabric, textile spinning and eventually bicycle tires and tubes. Over the decades, SIL has evolved into a diversified player with strong presence in both the tyre and footwear industries.

SIL operates with a dual profile, functioning both as a holding company and as an operating entity. As a holding company, it maintains strategic investments in Service Long March Tyres (Pvt.) Limited (SLM) and Service Global Footwear Limited (SGFL), while also fully owning two subsidiaries, Service Tyres (Pvt.) Limited (STPL) and Service Retail (Pvt.) Limited (SRPL), to which its tyre/tube and retail footwear businesses have been transferred respectively. This restructuring has further reinforced SIL’s role as the Group’s holding platform. On the operating side, SIL manages its manufacturing facility located in Gujrat. At the Group level, SIL operates with an installed footwear capacity of ~4.6 million pairs under strobel construction and ~3.6 million pairs under lasted construction, supported by a nationwide retail network of 280 outlets managed through SRPL. In the tyre segment, the Group has an annual production capacity of 24.2 million tyres and 57 million tubes, complemented by a spare parts division with capacities of ~2.5 million chains and ~1.9 million sprockets. As of CY24, capacity utilization stood at ~75% in footwear and ~74% in tyres and tubes, underscoring efficient operational execution and sustained demand across both segments.

The sponsoring family remains the principal shareholder of SIL, collectively holding ~40.36% through the Directors, CEO, and their family members. Key individual holdings include Mr. Hassan Javaid (~19.29%), Mr. Omer Saeed (~10.14%), Mr. Arif Saeed (~10.14%), and Ms. Fatima Saeed (~0.79%). Associated companies, undertakings, and related parties together hold ~9.65%. Among institutional investors, NIT & ICP hold ~10.89%, while the general public and others account for ~34.9%. The remaining shareholding is distributed across banks, DFIs, insurance companies, modarabas, and mutual funds.

The ownership structure of SIL is considered stable, anchored by the sponsoring family’s significant shareholding and active leadership role. Stability is further reinforced by a clear succession plan and the family’s deep-rooted involvement in strategic and operational matters. With a history spanning over seven decades, SIL has established itself as a trusted name in Pakistan’s industrial landscape, maintaining a leading presence in both the footwear and tyre sectors. Its longstanding domestic footprint, coupled with an expanding international presence through exports and joint ventures, underpins the Company’s ownership stability and strategic continuity.

The business acumen of SIL’s sponsors is regarded as strong, anchored by the longstanding involvement of the sponsoring families who remain actively engaged in guiding the Company. With decades of experience in footwear,and tyres, the sponsors have consistently demonstrated strategic foresight and execution capabilities that have driven SIL’s sustained growth. Their ability to identify and capitalize on investment opportunities is reflected in the successful diversification into subsidiaries such as Service Global Footwear and Service Long March Tyres. Backed by strong financial depth and resources, the sponsors have established SIL’s flagship brand “Servis” as a household name in Pakistan while also extending the Group’s presence across three continents. This proven track record of building scale, brand equity, and international reach underscores the sponsors’ robust business acumen.

SIL’s consolidated asset base stands at ~PKR 111bln as of Dec’24 while equity stood at ~PKR 26bln. Additionally, the group has substantial investments in Service Long March Tyres (Pvt.) Ltd and Service Global Footwear Ltd which provide ample financial strength to the company.

The Board of Directors of SIL comprises nine members, reflecting a balanced mix of experience and independent oversight. It includes three independent directors, two executive directors, and four non-executive directors. The Board is chaired by Ms. Uzma Adil Khan, a seasoned professional with extensive regulatory and corporate leadership experience, ensuring strong governance practices. The composition reflects diversity in expertise across regulatory affairs, industry operations, and business leadership, supporting effective decision-making and strategic oversight.

The Board of SIL is led by Mrs. Uzma Adil Khan (Chairperson), who has served as Chairperson OGRA and MD/CFO of SNGPL. Mr. Arif Saeed (CEO) has served as Chairman of Service Global Footwear, Engineering Development Board, and founding Chairman of major public-sector power companies, in addition to leading APTMA and Lahore Stock Exchange. Mr. Omar Saeed has served as CEO of SIL (2011–2018) and currently serves as CEO of Service Long March Tyres and Servis Foundation, while also serving on boards of Nestlé Pakistan, Systems Limited, and Service Global Footwear. Mr. Hassan Javed has served as CEO of Service Global Footwear and Resident Director of SIL Gujrat, and has also chaired the Pakistan Footwear Manufacturers Association and GESCO. Mr. Shahid Hussain Jatoi has served the Government of Pakistan in senior roles at FBR, Ministry of Finance, and FIA, bringing expertise in taxation and fiscal governance. Mr. Ahsan Bashir has served as CEO of Suraj Cotton Mills since 1992, and has also chaired APTMA and an advisor to the Ministry of Commerce. Mr. Muhammad Naeem Khan has served as CEO/MD of Atlas Asset Management, Atlas Investment Bank, and Atlas Capital Markets, and is currently on the boards of Atlas Power and Raaziq International. Mr. Adil Matcheswala has served as Chairman of JS Bank and CEO of Speed (Pvt.) Ltd., with prior leadership in equity markets. Mr. Saif Javed serves as Head of a business unit at Service Global Footwear, having earlier led the company’s safety footwear division.

The Board of Directors meets regularly with structured agendas to steer the Company’s strategic direction and monitor management performance. Comprehensive minutes are maintained, capturing key deliberations, directives, and action plans. To strengthen governance, the Board has constituted two subcommittees, the Audit Committee and the HR & Remuneration Committee, each chaired by an independent director and comprising three members. These committees play a pivotal role in ensuring oversight, accountability, and alignment with best corporate governance practices, thereby enhancing the overall effectiveness of the Board.

The Company’s external audit is conducted by M/s Riaz Ahmad & Co., Chartered Accountants, a category “A” firm on the SBP panel of auditors. The auditors have expressed an unqualified opinion on the financial statements for the year ended December 31, 2024, reflecting compliance with applicable reporting standards and sound financial disclosure practices.

SIL is structured into multiple operational entities, each overseen by specialized management teams tailored to their respective functions. Clear reporting lines, defined roles, and accountability mechanisms ensure operational efficiency and effective oversight. The Group also benefits from the stability of having all key positions filled, with senior management experienced in leading both domestic operations and international ventures. This structure reflects a professionalized governance model that enables SIL to balance its role as a holding company with its operating responsibilities.

The management team comprises seasoned professionals with extensive industry knowledge and functional expertise. Mr. Arif Saeed, the CEO, brings over 27 years of experience and is supported by executives including Mr. Badar Ul Hassan (Group CFO), a Chartered Accountant with over 25 years of experience, and Mr. Omar Saeed, Executive Director, with more than two decades of leadership within the Group. Other senior team members include specialists in finance, technical operations, human resources, sales, and marketing, many of whom have long tenures with SIL, ensuring both continuity and depth of expertise. The mix of family leadership and professional managers provides a well-rounded foundation for strategic execution.

The Company has established a robust framework of executive and management committees that strengthen decision-making and governance. These include the Group Executive Committee, Business Head Committee, and Core Services Committee, which collectively bridge interdepartmental gaps and align operational priorities with strategic objectives. Minutes of  committee meetings are properly recorded and reviewed, demonstrating a culture of transparency and accountability. The Management Committee further supplements this framework by regularly reviewing business plans and progress, providing an additional layer of operational effectiveness.

The Company has fully deployed an Enterprise Resource Planning (ERP) system through Oracle E-Business Suite (EBS) R12, which integrates financing, manufacturing, and support functions under a centralized data platform. This system ensures process standardization, real-time information flow, and enhanced operational efficiency across the organization.

SIL maintains a sound internal control framework, supported by clearly defined lines of responsibility, authorization, and accountability. The Company has established a dedicated internal audit function staffed with qualified professionals to evaluate internal controls and ensure compliance with regulatory requirements, fair financial reporting, and operational efficiency. The internal audit function reports to the Audit Committee of the Board, which reviews the adequacy of the control environment on a quarterly basis. This framework is reinforced by a robust technological infrastructure across manufacturing and support functions. Proper recording of Board and committee minutes, along with periodic reviews of internal controls, demonstrates a strong culture of oversight, transparency, and governance within the organization.

Pakistan’s footwear industry is a significant component of the manufacturing sector and an essential consumer need, employing over one million people. Production is concentrated in Lahore, Gujranwala, and Sheikhupura, with annual demand estimated at around 600 million pairs. Organized players such as BATA, SERVIS, STYLO, NDURE, and BORJAN account for a sizeable share, while the cottage industry caters largely to domestic demand. In FY24, exports stood at USD ~162 million (~21 million pairs), primarily to Europe, the US, and the Middle East, though this reflected a ~9% YoY decline amid softer international demand. Leather footwear remained dominant with a ~77% share of export revenues. In the broader mobility sector, demand for tyres is closely linked with the demand pattern of replacement market and new automobile & motorcycle sales. According to PAMA, the 2/3-wheeler segment remains resilient, with over 1.5 million units sold during FY25, underpinned by affordability and rural demand. Tyre demand is predominantly replacement-driven (~80–90%), with OEMs contributing a smaller share. Within the commercial tyre segment, demand for Truck and Bus Radial (TBR) tyres continues to expand, driven by regulatory support for localization, ongoing import substitution, and rising logistics needs. In FY25, cumulative sales of trucks and buses stood at ~5,200 units, while the LCV and pickup segment recorded a strong ~61% volumetric growth. This growth trend underpins increasing demand for associated tyres, reinforcing the strategic significance of the commercial tyre space for local manufacturers. The agricultural segment witnessed a slowdown in FY25, with tractor sales declining to ~29,000 units compared to ~45,911 units in FY24, reflecting a contraction of ~37%. The drop indicates challenges in mechanization uptake and pressure on rural incomes. Nevertheless, the segment remains strategically important, as recovery in rural purchasing power is expected to revive demand for tractors, thereby driving growth in agri tyres — an area of increasing focus for local manufacturers. Overall, these dynamics highlight steady underlying demand in both footwear and mobility sectors, with growth prospects tied to export momentum, consumer affordability, and policy support. However, rising input costs, currency volatility, and subdued external demand remain structural challenges.

Service Group stands among the leading players in Pakistan’s tyre, tube, and footwear industries, with a well-established presence across both domestic and export markets. The Group holds a dominant market share, being the only TBR tyre manufacturer in the local market under the name SLM, leading the 2/3-wheeler tyre market through STPL, and also standing among top 3 player, within the footwear market through SRPL. The group possess a sizeable installed capacities in the country, comprising ~24.2 million tyres, 57 million tubes, and a footwear capacity of ~4.6 million pairs under strobel construction and ~3.6 million pairs under lasted construction. This scale of operations positions the Group as a benchmark in its respective segments, enabling it to leverage economies of scale, meet diverse market demand, and reinforce its competitive standing.

SIL's consolidated topline is distributed among three domains: i) tyres & tubes ~77%, ii) footwear ~20%, and iii) spare parts & technical products ~3%. Revenue of the Company ramped up by 29.5% in CY24 and clocked at PKR 125bln (CY23: PKR 96.5bln). This is mainly attributed to increased sale volumes of Tyres and Spare Parts, then slightly complemented by better prices. Sales grew by 4.1% on annualized basis during 1QCY25 with topline clocked at ~PKR 32.5bln.

During CY24, the gross margin of the Company slightly improved to ~24.7% at CY24 (CY23, 22.6%. Raw material consumed is the largest contributor in cost of sales (COS), representing ~58.3% (CY23: ~69%). The Company managed to improve efficiencies in other cost elements, which contributed the slight improvement in operating margin, which recorded at ~14.77% (CY23: 13.66%), resultantly the Net profit margin improved to ~6.3% (CY23: ~4.5%).

In the tyre segment, the group is diversifying its product portfolio to maintain their leading position in local market whereas SIL is also focused towards spreading their footprints worldwide by tapping into new international sites and customers. Additionally, the Group’s joint venture, Service Long March Tyres (Private) Limited (SLM) is the only local TBR manufacturer, established with a Chinese partner, has recently completed its second phase and commenced operations. On the footwear segment export sales contributed a slightly higher proportion with respect to local sales. The Company is continuously expanding its foot prints in international destinations, through enhancing its customer base. While on the local footwear segment the Company is actively enhancing its product reach by expanding its nationwide retail outlet network. To mitigate competitive pressures from local players, the Company is diversifying its product offerings in retail outlets which include branded apparel, handbags, accessories and etc.

SIL's working capital requirement emanates from inventories and trade receivables for which it relies on both internal cash flows as well as borrowings. As of 1QCY25, the Company’s Gross working capital days are climbing, standing at ~114 days (CY24: ~101 days, CY23, 111days), whereas the Net working capital days of the Company stood at ~90 days in 1QCY25 (CY24: ~79 days, CY23, 87days).

The Company's consolidated free cash flow from operations (FCFO) improved to PKR 20,119mln in CY24 (CY23: PKR 14,637mln). However, during 1QCY25, SIL recorded FCFO of PKR 4,698mln. It has reported interest and core coverage ratios at 3.1x and 1.7x, respectively in CY24 (CY23: 2.1x and 1.3x, respectively). At end Mar'25, the ratios improved to 3.6x and 1.8x, respectively.

During 1QCY25, total debt of SIL stood at PKR~66.3bln (CY24: PKR 66.5bln, CY23: PKR 52.6bln). The increase in liabilities over the period has outpaced increase in equity and resultantly leveraging stood at ~70.5% at 1QCY25 and 71.9% in CY24 (CY23: 73.5%).