Moody’s Ratings has upgraded the corporate family rating (CFR) of Grab Holdings Inc to Ba2 from Ba3 and changed the outlook to stable from positive.

The stable outlook reflects the rating agency expectation that Grab’s earnings and cash flow will continue to grow over the next 12-18 months, supported by its leading market position and cash buffers, even as elevated oil prices weigh on mobility and deliveries margins in the near term, Moody’s said in a statement on Monday.

It also expects the company to execute its growth strategy prudently, particularly with respect to acquisitions and shareholder returns, while maintaining very good liquidity.

“The upgrade of Grab’s CFR to Ba2 reflects continued improvement in its credit quality, underpinned by stronger earnings and cash flow generation,” said Yu Sheng Tay, a Moody’s Ratings Assistant Vice President and Analyst.

“While higher oil prices and softer consumer sentiment represent near-term headwinds, Grab’s scale, leading market position in Southeast Asia, and sizable cash buffers allow it to sustain driver support programs, giving it an advantage over smaller regional competitors,” added Tay.

According to Moody’s Grab’s credit quality has improved, underpinned by stronger earnings and cash flow generation that it expects to be maintained even as elevated oil prices and softer consumer sentiment create near-term pressure on its mobility and deliveries businesses.

The rating agency projected Moody’s-adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), which includes share-based compensation and interest income, to increase to around $590 million in 2026 and $740 million in 2027, from $483 million in 2025, supported by continued gross merchandise value (GMV) growth across mobility and deliveries, narrowing losses in the financial services segment, and disciplined cost management.

Although elevated oil prices arising from the Middle East conflict create near-term pressure on mobility and deliveries margins, Moody’s expects earnings to continue to grow.

It is noted that Grab has responded with targeted driver support measures, including fuel rebates and vouchers, co-funded fuel discounts, and has raised fuel surcharges in certain markets.

Moody’s expects Grab to have the flexibility to moderate consumer incentives, if needed, to help manage margin pressure, while leaning on affordability-focused products to sustain demand.

Furthermore, elevated fuel prices affect all ride-hailing and food delivery operators.

Grab’s financial resources and scale as the largest operator in Southeast Asia give it a meaningful advantage over smaller regional rivals, which may lack the financial capacity to sustain driver support programs over a prolonged period, Moody’s added.

It also said Grab has stepped up investment activity over the last 12 months, including in autonomous and remote-driving technologies and digital wealth management, as well as the $600 million acquisition of a food delivery business in Taiwan, marking its first foray outside Southeast Asia.

Moody’s views the increase in mergers and acquisitions (M&A) activity as broadly consistent with the company’s strategy to strengthen existing business lines, and these transactions will not materially compromise the company’s net cash position.

The rating agency also projects Grab’s financial services segment to register its first full year of positive EBITDA in 2027, with breakeven EBITDA targeted by the end of 2026.

This reflects continued scaling of the lending business across its digital banking and fintech platforms.

Moody’s also expects the company to remain open to inorganic opportunities that enhance its capabilities and broaden its product offerings in financial services.

According to Moody’s Grab has very good liquidity. It had unrestricted cash balances and short-term investments of $5 billion (excluding customer deposits of $1.6 billion), compared with $2 billion of debt as of December 2025.

It noted Grab’s liquidity is further bolstered by around $1 billion of non-current time deposits and investments.

Alongside cash flow generation, these sources are sufficient to fund the company’s share buybacks, proposed acquisitions and investments, capital expenditures, and debt maturities.

Moody’s also highlighted that this rating action is based on a baseline scenario of a contained impact on energy markets notwithstanding ongoing disruption to oil supply and limited damage to production or infrastructure.

Nevertheless, it recognized that Grab’s credit profile may be susceptible to a more adverse scenario in the conflict, reflecting its exposure to the macro financial conditions risk transmission channel, which could lead to a more consequential impact on creditworthiness.

Moody’s said it would upgrade Grab’s rating if it maintains its leading market position in mobility and delivery services; continues to improve its revenue, earnings, margins and free cash flow; demonstrates a track record of profitability at its financial services segment; and maintains very good liquidity and prudent financial policies, particularly in terms of acquisitions and shareholder returns; and debt/EBITDA remains below 2.5 times.

The rating, however, could be downgraded if Grab’s market position in mobility and delivery services erodes such that its revenue and earnings deteriorate; losses at its financial services segment increase further or the breakeven timeline is materially delayed; the company pursues an aggressive growth strategy or embarks on outsized shareholder returns; or if leverage, as measured by debt/EBITDA, rises above 3.5 times, particularly if accompanied by a significant reduction in the company’s cash buffer and liquidity position.

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