{"id":11392,"date":"2025-08-27T11:44:25","date_gmt":"2025-08-27T06:44:25","guid":{"rendered":"https:\/\/ksestocks.com\/blog\/?p=11392"},"modified":"2025-08-27T11:44:27","modified_gmt":"2025-08-27T06:44:27","slug":"servis-industries-srvi-earnings-boosted-by-tax-reversal","status":"publish","type":"post","link":"https:\/\/ksestocks.com\/blog\/servis-industries-srvi-earnings-boosted-by-tax-reversal\/","title":{"rendered":"Servis Industries (SRVI): Earnings Boosted by Tax Reversal"},"content":{"rendered":"\n<p><strong>Servis Industries (<a href=\"https:\/\/ksestocks.com\/blog\/tag\/srvi\/\" data-type=\"post_tag\" data-id=\"254\" target=\"_blank\" rel=\"noreferrer noopener\">SRVI<\/a>) <\/strong>announced its 2Q CY25 results, posting a profit of <strong>PKR 3.3 billion (EPS: PKR 70.4)<\/strong>, which is more than <strong>double last year\u2019s profit<\/strong> of PKR 1.4 billion. This jump wasn\u2019t because of stronger operations alone; it was mainly due to a <strong>PKR 3.0 billion tax reversal<\/strong> booked in the quarter.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Key highlights<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Revenue Growth:<\/strong> Sales stood at PKR 37.7 billion, up <strong>20% YoY<\/strong> and <strong>16% QoQ<\/strong>, likely on the back of stronger volumes from SLM (Servis Long March).<\/li>\n\n\n\n<li><strong>Margins Under Pressure:<\/strong> Gross margins slipped to <strong>22.3%<\/strong> from 26.2% last year, showing pricing pressure despite higher sales.<\/li>\n\n\n\n<li><strong>Costs &amp; Expenses:<\/strong>\n<ul class=\"wp-block-list\">\n<li>Selling\/distribution costs rose <strong>23% YoY<\/strong> due to higher sales activity.<\/li>\n\n\n\n<li>Admin expenses also went up by <strong>22% YoY<\/strong>.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Lower Finance Cost:<\/strong> Financial charges declined <strong>21% YoY<\/strong> to PKR 1.4bn, thanks to lower interest rates.<\/li>\n\n\n\n<li><strong>Big Boost from Taxes:<\/strong> The game-changer was a <strong>PKR 3bn tax reversal;<\/strong> without it, earnings growth would have been much lower.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">What does this mean?<\/h2>\n\n\n\n<p>While SRVI delivered record profits, investors should note that <strong>the exceptional jump came from a one-off tax reversal<\/strong> rather than stronger underlying operations. Margins are under pressure, and expenses are rising, even though sales are growing.<\/p>\n\n\n\n<p>The company\u2019s future performance will depend more on how it manages costs and maintains sales growth once the tax benefit fades away.<\/p>\n\n\n\n<p><strong>Source: Insight Securities<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Servis Industries (SRVI) announced its 2Q CY25 results, posting a profit of PKR 3.3 billion (EPS: PKR 70.4), which is more than double last year\u2019s profit of PKR 1.4 billion. This jump wasn\u2019t because of stronger operations alone; it was mainly due to a PKR 3.0 billion tax reversal booked in the quarter.<\/p>\n","protected":false},"author":9252,"featured_media":7005,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[154,138],"tags":[254],"class_list":["post-11392","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","category-financials","tag-srvi"],"featured_image_src":{"landsacpe":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/SRVI-STOCK-PSX-1140x445.png",1140,445,true],"list":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/SRVI-STOCK-PSX-463x348.png",463,348,true],"medium":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/SRVI-STOCK-PSX-300x188.png",300,188,true],"full":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/11\/SRVI-STOCK-PSX.png",1920,1200,false]},"_links":{"self":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/11392","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/users\/9252"}],"replies":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/comments?post=11392"}],"version-history":[{"count":1,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/11392\/revisions"}],"predecessor-version":[{"id":11393,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/11392\/revisions\/11393"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media\/7005"}],"wp:attachment":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media?parent=11392"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/categories?post=11392"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/tags?post=11392"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}