Grab Holdings Ltd: FY26F profitability to surprise the street
- We raise FY26F group adj EBITDA by 11% bringing us 28% above consensus, led by deliveries.
- Grab is scaling up GrabMart & Dine-out offerings in FY25F, whose margin impact should be evident in FY26F
- BUY with a higher TP of USD7.55. Potential catalyst would be higher than expected deliveries GMV growth in 3Q25F
We raise FY26F group adj EBITDA by 11% bringing us 28% above consensus, led by deliveries. Grab has set a medium-term adj EBITDA to GMV target of 4% for deliveries which we think can be achieved in 2H27F. We project 2.2%/3.2% adj EBITDA to GMV in FY25F/26F, higher than consensus margin of 2.0%/2.4%. Consensus seems to be extrapolating FY26F margins based on FY25F margins, ignoring the timing of new product launches. We posit further upside to our projected margins in case of potential exit of Foodpanda from Singapore and Malaysia as we doubt if Foodpanda can achieve EBITDA breakeven in Singapore and Malaysia. With Grab scaling up solo meal delivery (GrabFood for One) and online grocery delivery (GrabMart), which
have been traditional strongholds of Foodpanda, Foodpanda’s intent of achieving EBITDA breakeven in Singapore, may be even more challenging in our view.
Scaling up GrabMart & Dine-out offerings over FY24/25F which implies margin impact in FY26F. We expect Grab’s Dine-Out service to be a high-margin business that will enhance overall profitability within its deliveries segment. This potential is underscored by comparable industry benchmarks: Meituan’s delivery segment recorded an operating margin of around 6.4% in 2021, whereas its in-store hotel and travel business, which requires no delivery, achieved a significantly higher margin of about 43%. Grab’s Dine-Out integrates table reservations, dining deals, and mobility services, thereby strengthening its position in the competitive food services market by offering a seamless, end-to-end dining experience. More than 2,500 restaurant brands currently participate in Grab Dine-Out Deals, offering voucher-based set menus and total bill discounts tailored to solo diners, couples, and groups. Management noted that 27% of dine-in deal purchases came from new users, with 80% of them making repeat purchases within four months (as of August 2024)—evidence of strong user engagement and retention. The service is further enhanced by Grab’s mobility integration, DBS Group Research
Disclaimer: The information contained in this document is intended only for use by the person to whom it has been delivered and should not be disseminated or distributed to third parties without our prior written consent. DBS accepts no liability whatsoever with respect to the use of this document or its contents. Please refer to Disclaimer found at the end of this document allowing users to book rides to participating restaurants directly within the app. The integration of Chope’s reservation platform in 2025 across Singapore, Jakarta, Bali, Bangkok, Phuket, Hong Kong, and Shanghai further supports Grab’s omnichannel strategy, from booking to payment.
Meanwhile, GrabMart continues to serve as a major long-term growth engine for the Deliveries segment. Online grocery penetration in Southeast Asia remains below 5%, leaving vast headroom for growth. For example, the quick-commerce sector in Thailand alone is projected to expand 20–30% in 2025 (Priceza). GrabMart, currently contributing under 10% of deliveries GMV, is growing 1.5x faster than food delivery and has reached record monthly users in 2Q25. Grab’s ecosystem now exceeds 46 million monthly users, supported by acquisitions like Jaya Grocer and Everrise in Malaysia, and partnerships with TOPS and The 1 loyalty platform in Thailand. With AI-driven logistics, faster picking speeds, and rising advertising revenue already at 1.7% of Deliveries GMV and projected to reach 3–4%, GrabMart’s efficiency and monetisation gains are expected to lift overall margins, positioning it as a key long-term profitability driver for Grab.
GrabMart drives higher-margin advertising revenue growth for Grab. GrabMart’s rapid GMV expansion continues to create a meaningful tailwind for Grab’s high-margin advertising business. Recent product improvements have helped GrabMart grow faster than the overall deliveries segment again in 2Q25, with monthly transacting users (MTUs) reaching a new record high. Grocery and retail deliveries open up new advertising inventory and attract Fast-Moving Consumer Goods (FMCG) and household brands seeking to influence purchase decisions at the point of sale. This retail-media opportunity enables GrabAds to monetize product placements, sponsored listings, and targeted promotions, all supported by rich first-party shopping data. As GrabMart scales, it expands both ad impressions and advertiser demand, thereby driving advertising revenue growth and supporting overall profitability. Grab also sees higher advertising monetisation as a near-term driver of margin improvement, even though GrabMart itself remains primarily a GMV driver, not a margin driver.
Ads emerging as a core growth and profitability lever. Grab's Advertising segment continues to demonstrate strong momentum, emerging as a key earnings and ecosystem driver. Advertising revenue reached an annualized run-rate of USD236mn in 2Q25, with advertising penetration as a share of deliveries GMV rising to 1.7% (up from 1.4% a year ago). Growth remains demand-led, supported by a 31% y/y increase in quarterly active advertisers on its self-serve platform to over 220,000, alongside a 42% y/y rise in average advertiser spend. This reflects deeper ad penetration among merchant partners, particularly Small and Medium-sized Enterprises (SMEs) leveraging Grab’s self-serve ad platform, which reduces friction and supports scalable
monetization.
Strong campaign returns of 8–9x Return on Ad Spend (ROAS) are driving higher advertiser retention and spend. As Grab’s merchant base, GMV, and user engagement expand, ad inventory continues to grow across deliveries, GrabMart and Mobility. Product innovations such as sponsored listings, map pins, and AI-driven targeting have improved ad relevance and pricing power. Management targets to lift ad penetration to 2.5–3% of deliveries GMV over the medium term, re-inforcing advertising as a key margin and ecosystem growth driver.
GRAB delivers greater value to users over competitors through efficient, low-cost offerings. In low-cost delivery, Grab ranks first due to its Saver and Shared Saver options. These leverage batching technology to permanently lower the cost per delivery, unlike rivals who rely on temporary vouchers or subsidies. For solo meal delivery, Foodpanda benefits from a first-mover advantage, whereas Grab benefits from GrabFood for One’s
integration with Saver and Unlimited tiers to deliver both convenience and ecosystem savings. In dine-out and lifestyle integration, Grab benefits from its recent expansion with the Chope acquisition, which enables in-app restaurant reservations, dine-out rewards, and regional deals. This offers a comprehensive ecosystem rather than isolated discounts.
We expect GRAB to outpace GOTO’s On-demand services growth. We project GRAB to grow its deliveries GMV at a CAGR of 12% over FY25F-27F compared to GOTO’s on-demand services (mobility + delivery) CAGR of 9% (GOTO does not disclose mobility and delivery segments separately). We expect delivery GMV to grow by 20% y/y in FY25F, vs. 13% y/y growth in FY24, and a further 14% y/y in FY26F. We expect GRAB’s on-demand GMV to grow by 19% and 14% y/y in FY25F and FY26F respectively vs GOTO’s 12% and 10% y/y growth, underscoring Grab’s stronger execution and marketshare gains across key Southeast Asian markets.
We expect adj. EBITDA at USD907mn (+82% y/y) in FY26F vs previous forecast of USD821mn, with a stronger lift from deliveries. We now expect delivery adj. EBITDA to GMV to expand to 3.2% in FY26F vs our previous assumption of 2.8% (from 1.7% in 2024), with ramp-up of new marginaccretive initiatives and scale expansion. Further we expect delivery adj. EBITDA to GMV to expand to 3.8% in FY27F vs our previous assumption of 3.4% due to potential exit of Foodpanda from Singapore and Malaysia. We expect GRAB’s on-demand adj EBITDA as a % of on-demand GMV to reach 2.7% and 3.6% in FY25F and FY26F respectively vs GOTO’s 2.1% and 2.6%. For financial services, we continue to expect adj. EBITDA losses improvement in FY25F and achieve breakeven in FY26F as Grab scales its loan books in its Digital Banks in Singapore and Malaysia. As such, we continue to expect losses to narrow to USD100mn in FY25F from USD105mn in FY24. 
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