{"id":332043,"date":"2025-03-28T00:52:09","date_gmt":"2025-03-27T16:52:09","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=332043"},"modified":"2025-03-28T00:52:13","modified_gmt":"2025-03-27T16:52:13","slug":"stock-in-focus-dl-industries-inc-dnl-28-march-2025-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-dl-industries-inc-dnl-28-march-2025-by-ap-securities\/","title":{"rendered":"Stock in Focus: D&L Industries Inc. (DNL) – 28 March 2025 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>DNL<\/td><\/tr>
Company Name<\/strong><\/td>D&L Industries Inc.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>28 March 2025<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 8.01<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We maintain our positive outlook for the company as a result of their continued expansion efforts in industries with vast potential for growth such as exports and biodiesel. As such, we maintain our BUY rating for DNL with a Target Price of P8.01.<\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\n\n\n\n

Strategic positioning<\/strong><\/p>\n\n\n\n

DNL sent out a press release that they are studying the feasibility of constructing a second biodiesel plant through their subsidiary Chemrez Technologies, Inc. We see this as a strategic move given the government\u2019s plan to continue increasing the biodiesel blend from the current rate of 3% to 5% by October 1, 2026.<\/p>\n\n\n\n

Financially capable<\/strong><\/p>\n\n\n\n

We note management stating that the completion of their Batangas plant means that there are currently no major CAPEX items moving forward, which gives the company the financial flexibility to push through with the construction of the new biodiesel facility. Additionally, DNL also mentioned that the erection of the facility would require significantly lower CAPEX vs their Batangas plant. DNL currently has manageable net debt-to-equity figure of 0.84x.<\/p>\n\n\n\n

Discussing margins<\/strong><\/p>\n\n\n\n

Taking a dive on the gross profit margins (GPM) of DNL\u2019s segments, we note that Chemrez managed to stabilize margins at 17.1% which is in stark contrast to Food Ingredient\u2019s and Consumer Products ODM\u2019s 1.6 ppts and 8.1ppts margin declines respectively. Given that the biodiesel blend is expected to rise by 100bps by October 2025, we therefore see margins for DNL\u2019s Chemrez segment to start marking some expansion beginning 4Q25, which would then continue onto 2026 onwards.<\/p>\n\n\n\n

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Check how many brokers recommend this stock<\/h2>\n\n\n\n
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All Stock Rankings<\/a><\/blockquote>