The world's technology ambitions rest on a simple foundation: power. Whether it's the rise of artificial intelligence (AI), electrification of transport, or building new suburbs and city towers, none of it works without a robust electrical backbone.
That makes electrical contractors one of the more quietly enduring industries on the ASX. It isn't glamorous, but it is essential.
And as infrastructure demand evolves, some lesser-known players are starting to look like genuine growth stories. Two such "hidden gems" are Southern Cross Electrical Engineering Ltd (ASX: SXE) and SKS Technologies Group Ltd (ASX: SKS).
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From mining to megawatts
Southern Cross Electrical Engineering, or SCEE, has transformed itself in recent years. Once seen largely as a mining services contractor, the company has steadily diversified into renewables, commercial fit-outs, and — most notably — data centres and battery storage projects.
The growth is showing up in the numbers. In FY25, SCEE delivered record revenue of $801.5 million, up 45.2% on the prior year, and record operating earnings (EBITDA) of $54.8 million, up 36.6%. Looking ahead, management has guided to FY26 EBITDA of $65 to $68 million — implying growth of 18% to 24% on FY25 — and is actively exploring multiple acquisition opportunities to keep the momentum going.
The opportunity set is vast. SCEE's infrastructure markets encompass federal, state, and private investments in areas such as transportation, healthcare, aged care, defence, education, agriculture, water, renewables, and utilities. But perhaps the standout driver is data centres.
These facilities are experiencing exponential growth thanks to cloud computing and AI. They are also incredibly power-hungry, with electrical work representing the single largest component of construction cost. With over two decades of experience in data centre projects, SCEE is well-positioned to benefit from this surge in demand.
Small cap, big ambitions
If SCEE represents scale and stability, SKS Technologies brings fast growth and entrepreneurial energy.
Headquartered in Melbourne, SKS specialises in integrated technology and electrical solutions, from audiovisual and IT systems through to large-scale electrical works. Recently, its biggest growth driver has been data centres, which accounted for more than half of revenue in the first half of FY25.
The numbers from FY25 tell the story. Sales revenue surged 92% to $261.7 million, while operating earnings (EBITDA) leapt 161% to over $23 million. Profit before tax climbed 220% to $20.8 million.
Importantly, SKS is winning repeat business at scale. In FY25, repeat work rose to 94% of activity, up from 75% the year before. Its order book doubled to $200 million, providing visibility well into FY27. Management has also forecast FY26 revenue of $300 million, suggesting the growth story is far from over.
The company also has a broad customer base, from defence to aged care, with repeat business estimated at nearly 80%. Its tender pipeline sits at $570 million, with data centres, defence, and healthcare offering long-term opportunities.
Foolish Takeaway
Electrical infrastructure may not grab headlines like game-changing AI stories. But without it, none of those megatrends work.
Both Southern Cross Electrical Engineering and SKS Technologies highlight the importance of this sector and how investors can find growth opportunities in previously overlooked areas of the ASX.
They're not without risks — contractors can face thin margins and cyclical challenges — but as Australia transitions to a more electrified future, these hidden gems could have a bright future ahead.
