Moody’s Ratings has upgraded Grab Holdings Inc’s corporate family rating (CFR) to Ba3 from B1, maintaining a positive outlook. This decision reflects Grab’s enhanced credit quality, driven by its leading market position and disciplined cost management, which are expected to boost its scale and earnings over the next 12 to 18 months, according to Yu Sheng Tay, a Moody’s Ratings Assistant Vice President and Analyst.
Grab, a prominent provider of ride-hailing and delivery services in Southeast Asia, reported double-digit growth in key metrics during Q1 2025. Despite economic uncertainties, the company’s resilient business model and substantial cash reserves provide stability and support for potential growth opportunities. Tay noted, “Grab’s resilient business model provides stability to its earnings and free cash flow generation.”
The upgrade also considers Grab’s prudent financial policies, balancing growth with profitability. The company is expected to see its adjusted EBITDA rise to approximately $300 million in 2025 and $450 million in 2026, up from $163 million in the 12 months ending March 2025. Free cash flow is projected to increase to $370 million to $500 million.
However, risks remain with Grab’s nascent digital banking operations, which are currently loss-making. The company aims for breakeven EBITDA in this segment by H2 2026. Grab’s strong liquidity, with $4.2 billion in unrestricted cash and short-term investments, bolsters its financial flexibility.
Future upgrades depend on maintaining market leadership and improving financial metrics, whilst a downgrade could occur if these conditions are not met.
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