- ComfortDelGro (SGX:C52)'s FY25 revenue/PATMI were within expectations at 101%/97% of our FY25e forecast. Underlying net profit in 4Q25 declined 2% y-o-y to S$56mil. Taxi operating earnings declined 20% y-o-y to S$28.8mil.
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The Positive
London Metro repricing aids UK margins.
- UK earnings rose 14% y-o-y to S$20.8mil. The re-pricing of low-margin contracts is 50% completed. Comfort is also in more public bus tenders, such as Liverpool and West Yorkshire.
The Negative
Drop in taxi earnings.
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- The taxi fleet had stabilised in 2023 with 1% growth. However, the contraction resumed in 2024, with a 4.5% fall. The drop has doubled to 9.8% in 2025.
Outlook
- We expect modest growth for Comfort in 2026e. The high-margin Singapore taxi rental revenue is facing a sharper rate of decline amid intensifying competition; for instance, in November and December, ComfortDelGro lost 219 taxis whilst GrabCab gained 194.
- ComfortDelGro will look to differentiate its taxi services with more premium offerings.
Maintain ACCUMULATE with lower target price of S$1.50.
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